Corporate dispute tribunal NCLT has asked the suspended board of grounded airline Go First to file a reply within three weeks over the liquidation of the debt-ridded firm.
A two-member bench of the Delhi-based National Company Law Tribunal (NCLT), which was hearing the application to liquidate Go First, issued the notice to the suspended management of the company on Tuesday and ordered listing of the matter for further hearing on October 4.
The order came after resolution professional of Go First moved an application under section 33 (1) of the Insolvency & Bankruptcy Code, seeking liquidation of the grounded carrier as the lenders failed to find a reasonable buyer within the stipulated time frame.
During the proceedings, counsel appearing for Go First informed the NCLT that the Committee of Creditors decided to liquidate the company with a majority vote.
Earlier the Delhi High Court had ordered the deregistration of all 54 aircraft leased by Go First.
In addition to that the NCLT had on July 11 directed Go First to release four aircraft engines of Engine Lease Finance (ELF) BV.
Go First had also crossed the time limits under the Insolvency and Bankruptcy Code (IBC) to complete the corporate insolvency resolution process.
The lenders struggled to find a suitable buyer but failed. They had negotiations with some potential bidders and had considered the proposal from a consortium led by EaseMyTrip CEO Nishant Pitti and SpiceJet chairman Ajay Singh, as well as a bid from Sharjah-based Sky One Aviation.
However, none of deals materialised.
On June 12, NCLT granted an extension of 60 days to the grounded air carrier for completing the insolvency process of grounded air carrier. This was the fourth extension for Go First to complete the Corporate Insolvency Resolution Process (CIRP).
While granting the extension, the Delhi-based NCLT bench said: “This is the final extension”.
The Insolvency & Bankruptcy Code (IBC) mandates completion of CIRP within 330 days, which includes the time taken during litigations.
As per Section 12 (1) of the Code, CIRP should be completed within 180 days.
However, the maximum time within which CIRP must be mandatorily completed, including any extension or litigation period, is 330 days, failing which a corporate debtor is sent for liquidation.
The NCLT, on May 10, 2023, admitted the plea of Go First — which stopped operating flights on May 3 — to initiate voluntary insolvency resolution proceedings.