In a recent development, the National Company Law Appellate Tribunal (NCLAT) has upheld the insolvency resolution proceedings against Go First, an airline belonging to the struggling Wadia group. This decision has dealt a blow to aircraft lessors who were seeking to reclaim their planes from the crisis-ridden company.
A two-member bench at NCLAT has directed the aircraft lessors and the Interim Resolution Professional (IRP) appointed for Go First to approach the National Company Law Tribunal (NCLT) regarding the possession claims and other related matters concerning the aircraft whose leases were terminated by the lessors after the airline initiated the insolvency process.
The NCLAT bench, chaired by Justice Ashok Bhushan, affirmed the order dated May 10, 2023, which approved the Section 10 Application filed by Go First, thereby initiating the insolvency proceedings against the company.
This decision comes as a setback for the aircraft lessors who had hoped to regain possession of their leased planes. The termination of leases by the lessors was a consequence of Go First’s insolvency filing, which has resulted in a legal battle over the assets.
The NCLAT’s decision implies that the matter of possession and other claims regarding the aircraft will now be addressed by the NCLT, the appropriate authority to handle insolvency cases. The lessors and the IRP will have to present their arguments and seek resolution through the NCLT process.
Go First, formerly known as GoAir, has been facing severe financial challenges amidst the ongoing crisis in the aviation industry. The Wadia group, which owns the airline, has been striving to navigate the turbulent circumstances and revive the company’s fortunes.
The decision to uphold the insolvency resolution proceedings suggests that the NCLAT finds merit in the claims made by Go First regarding its financial distress and the need for insolvency proceedings. This move aims to provide a structured mechanism to address the company’s financial obligations and safeguard the interests of all stakeholders involved.
For the aircraft lessors, this development means they will have to navigate the legal procedures prescribed by the NCLT to pursue their claims for possession and seek resolution. The NCLT will carefully examine the arguments put forth by the lessors and the IRP before making a decision.
It is worth noting that insolvency proceedings can be complex and time-consuming, involving multiple parties and intricate legal considerations. The involvement of the NCLAT and NCLT underscores the significance of a fair and transparent process to resolve the financial challenges faced by Go First and ensure equitable treatment of all involved parties.
The outcome of this case will have implications not only for Go First and the Wadia group but also for the wider aviation industry and the creditors and lessors who have vested interests in the airline’s operations. The resolution of the insolvency proceedings will determine the future course of action for Go First and its ability to overcome the current crisis.
As the matter progresses through the NCLT, stakeholders will closely watch the proceedings and the subsequent decisions that will shape the destiny of Go First. The focus will remain on achieving a resolution that strikes a balance between the interests of the airline, its lessors, and other parties involved, thereby setting a precedent for future insolvency cases in the aviation sector.
