The National Company Law Tribunal (NCLT) on Thursday reserved its order on airline Go First's plea seeking voluntary insolvency resolution proceedings. The plea was heard by a two-member bench, headed by President Justice Ramalingam Sudhakar.
In its petition, the Wadia group-controlled airline sought initiation of insolvency resolution proceedings and an interim moratorium on its financial obligations. Aircraft lessors opposed the move, saying that they had not been heard.
Go First's representative, senior advocate Neeraj Kishan Kaul, argued that the Insolvency and Bankruptcy Code (IBC) aims to keep the company as a going concern and not ground it.
According to CNBC-TV18, during the hearing, Go First informed the two-member NCLT bench that its bank accounts with the consortium had already been frozen and Indian Oil Corporation (IOC) had started to invoke bank guarantees as of last night. The airline also stated that it had received additional notices for the termination of aircraft leases.
In response, NCLT questioned how an interim moratorium would help in such a situation. Go First explained that once the Committee of Creditors (COC) and the Insolvency Resolution Professional (IRP) take over with the objective to keep the airline afloat, they would be required to unfreeze the accounts.
Aircraft lessors told NCLT they have serious objection to the demand for moratorium by Go First and said that the moratorium will have harmful and serious consequences, the report said.
On the other hand, the airline has canceled flights till May 9 due to a severe fund crunch. In a statement, the company said it would refund the ticket prices to passengers through the original payment.
"We regret to inform that due to operational reasons, Go First flights scheduled till 9th May 2023 have been cancelled. We apologise for the inconvenience caused by the flight cancellations," it said.
DGCA on Thursday said Go First has suspended the sale of tickets till May 15 and was working to refund or reschedule existing bookings for future dates.
Crisis-hit Go First has sought various interim directions from the National Company Law Tribunal (NCLT), including relief from an interim moratorium, restraining lessors from taking back aircraft, and regulator DGCA from taking any adverse action against the airline.
According to a PTI report, the cash-strapped airline has also sought directions to restrain aircraft lessors from taking any recovery action against the airline. They have also asked to 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, the report further said.