The National Company Law Appellate Tribunal (NCLAT) on Monday upheld the NCLT order granting a moratorium to crisis-hit airline Go First, thus refusing to allow lessors to take back possession of aircraft.
The NCLAT passed the order on May 22 on petitions filed by three aircraft lessors against Go First’s voluntary insolvency resolution proceedings. All three lessors have leased out around 21 aircraft to Go First.
A two-member bench headed by Chairperson Justice Ashok Bhushan after recently completing the hearing on the three petitions had reserved its order for May 22.
With liabilities worth Rs 11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.
On May 10, 2023, the Delhi-based principal bench of the NCLT appointed an interim resolution professional to look after the affairs of Go First and also suspended its board as part of the insolvency resolution process. It also directed IRP to maintain the status of the airline as a going concern.
Admitting Go First’s plea for voluntary insolvency, the NCLT also granted protection under a moratorium from recovery by lessors and lenders.
Go First had filed a plea for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT). It filed its petition under Section 10 of the Insolvency and Bankruptcy Code to initiate insolvency against itself. The plea is different from Sections 7 and 9 where the financial and operational creditors, respectively, take the corporate debtor to the National Company Law Tribunal (NCLT) in case of default in payment of dues.
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