NCLT reserves order on Go First’s insolvency plea

NEW DELHI: The National Company Law Tribunal (NCLT) on Thursday reserved its order on crisis-hit airline Go First’s plea seeking voluntary insolvency resolution proceedings.

A two-member bench headed by President Justice Ramalingam Sudhakar concluded the day-long hearing during which the Wadia group-controlled airline sought initiation of insolvency resolution proceedings and an interim moratorium on its financial obligations.

However, aircraft lessors opposed the airline’s request saying that insolvency proceedings cannot be initiated without hearing them.

Senior Advocate Neeraj Kishan Kaul, representing Go First, said the objective of the Insolvency and Bankruptcy Code (IBC) is to ensure that a company is a going concern and not ground it.

Cash-strapped Go First has cancelled flights till May 9.

The crisis-hit Go First had sought various interim directions from the NCLT, including restraining lessors from taking back aircraft and regulator DGCA from taking any adverse action against the airline.

In its petition filed before NCLT, the budget airline had sought directions to restrain aircraft lessors from taking any recovery action as well as restrain the DGCA and suppliers of essential goods and services from initiating adverse actions.

Another plea is that the DGCA, Airports Authority of India (AAI), and private airport operators should not cancel any departure and parking slots allotted to the company.

The airline also wants fuel suppliers to continue supply for aircraft operations and not terminate the present contractual arrangements.

Go First, which started flying more than 17 years ago, has said the non-supply of engines by Pratt & Whitney resulting in the grounding of more than half of its fleet has led to the current situation.

The Wadia-group owned carrier has total liabilities of Rs 11,463 crore to all creditors, including a default of Rs 3,856 crore towards operational creditors.

The dues towards aircraft lessors is Rs 2,600 crore, according to the plea filed before NCLT.