New Delhi: National Company Law Appellate Tribunal (NCLAT) supported the National Company Law Tribunal (NCLT)’s decisions about accepting its orders on Go First Airline’s insolvency on Monday and directed certain modifications to the tribunal’s order.
NCLAT refused the lessors of the airline to possess the aircraft back to them again and ordered them to move NCLT for any solution in the Go First insolvency proceedings matter.
As the lessors were not in favour of the NCLT judgement, which earlier had supported Go First, and approved the airline for Interim Resolution Professional (IRP) and interim moratorium.
On May 10, the NCLT accepted Go First’s plea for voluntary insolvency and approved the initiation of Corporate Insolvency Resolution Process (CIRP) proceedings. With this, NCLT also secured Go First under a moratorium to recover from lessors and lenders.
“The order dated May 10, 2023 allowing insolvency is upheld,” said the NCLAT bench headed by Chairperson Justice Ashok Bhushan on Monday.
Why did the order come?
The order came after the batch of four petitions were filed by aircraft lessors which opposed Go First’s insolvency proceedings. The lessors are SMBC Aviation CApital Ltd, GY Aviation, SFV Aircraft Holdings and Engine Leasing Finance BV (ELFC).
The whole matter is related to US aerospace manufacturer Pratt and Whitney whom Go First blamed for its cash crunch which led to insolvency. The airline said that it was its “Faulty” engines which led to the grounding of over half its feet.
However, US-based jet manufacturer Pratt and Whitney (P&W) denied the budget’s claim that P&W is responsible for its financial condition and bankruptcy.
A week back, Go First has stopped its flight operations till May 26, giving operational reasons and told that it hope to resume bookings shortly.
Go the first airline stopped its flying operations on May 3. Moreover, aviation watchdog DGCA had ordered the cash-strapped airline to cease taking bookings until further orders.
