The National Company Law Tribunal (NCLT) has granted a 90-day extension to the Corporate Insolvency Resolution Process (CIRP) of Go First, the grounded airline, beginning from November 6, 2023, and concluding on February 4, 2024. The decision instructs Go First to present an action plan within this timeframe, emphasizing the critical need for completing the resolution process. Failure to do so could lead to the initiation of the company’s liquidation by the tribunal.
The extension comes as the latest development in Go First’s insolvency proceedings, which began when the airline voluntarily filed for CIRP on May 2, 2023, under Section 10. Subsequently, on May 10, the NCLT admitted the insolvency plea and appointed a Resolution Professional (RP) to manage the company’s affairs.
During the proceedings, Go First’s RP informed the NCLT that there is one prospective bidder for the airline. However, as of the November 21 deadline, the bidder had not submitted the resolution plan. The RP asserted that the Committee of Creditors (CoC) is reassessing the next steps for the airline, and the CoC unanimously passed a resolution to seek the 90-day extension.
According to the Insolvency and Bankruptcy Code (IBC) of 2016, the resolution process must ideally be completed within 180 days. However, the NCLT can extend this period up to a maximum of 330 days. If a resolution is not reached within this extended timeframe, the NCLT is obligated to order the liquidation of the company. By February 4, 2024, Go First would have been under the resolution process for 270 days.The DGCA clarified that the rule exempting aircraft leases from the moratorium, which stops legal actions, should also apply to cases that were already in progress, not just new ones. This added a layer of complexity to Go First’s already challenging situation.