NCLT admits Go First's insolvency plea

IMPOSES MORATORIUM ON AIRLINE'S FINANCIAL OBLIGATIONS

In a major relief to cash-strapped Go First, the National Company Law Tribunal on Wednesday admitted its plea for voluntary insolvency resolution proceedings and imposed a moratorium on the airline's financial obligations that bars lessors from taking back aircraft.

The tribunal's ruling, which was reserved on May 4, caps more than a week of uncertainty for the crisis-hit carrier, which has more than 7,000 employees on its rolls, and also comes against the backdrop of lessors moving to deregister at least 45 planes of the airline.

Besides, the Interim Resolution Professional (IRP) Abhilash Lal who will be in charge of the affairs of the airline as the board has been suspended - has been directed not to retrench any employees.

Allowing the plea, a two-member NCLT bench said there is existence of unpaid debt and default committed by Go First above the limits under IBC. It has placed on record the demand notices issued by the creditors, which is not even disputed by its representing lessors.

Hence, it has no other option but to admit the present application "under Section 10 of the Insolvency & Bankruptcy Code (IBC)", said the NCLT bench headed by President Justice Ramlingam Sudhakar.

"Accordingly, the application of the corporate applicant (Go First) admitted," said a 41-page NCLT order.

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 under section 10 of IBC, which allows a company to approach NCLT for initiation of insolvency after default.