The National Company Law Tribunal (NCLT) on Wednesday extended the corporate insolvency resolution process (CIRP) of the grounded airline Go First by 60 days, at the request of the lenders. Since, this is the fourth extension given to the company, the tribunal made it clear that this is the last extension.
Accordingly, the CIRP will now expire on August 3.
“We are not recording this in the order, but this is the final extension,” the NCLT said while passing the order.
During the course of the hearing, the lawyer for the airline’s resolution professional (RP) told the tribunal that they were seeking this extension owing to an extraordinary situation post the Delhi High Court judgment asking DGCA to deregister all of its 54 aircraft.
According to the RP, those who have shown interest in buying the airline have revised their offers and the lenders are yet to consider them, hence the 60 day extension is needed.
The NCLT, however, came down heavily on the RP for seeking extension after extension without there being a concrete development in the resolution plan. “The lenders cannot simply pass a resolution to extend the resolution process and expect us to pass order,” the NCLT said.
According to the Insolvency and Bankruptcy Code (IBC), 2016, a resolution process must be completed by 180 days and the NCLT has the powers to extend the period for completing the resolution process to a maximum of 330 days. If there is no resolution to a company’s insolvency even at the end of 330 days, the NCLT has to order liquidation of the company.
In the case of Go First, the 330 days ended in April. However, the NCLT is continuing to grant time using its discretionary power to ensure that the airline is revived.
Go First had received two bids for its acquisition on February 26. The consortium of SpiceJet’s chairman and managing director Ajay Singh and Busy Bee Airways, associated with EaseMyTrip’s chief executive officer Nishant Pitti, submitted a joint bid in their personal capacity, while the other bid is from Jaideep Mirchandani-owned Sky One Airways.
However in May, Pitti announced the withdrawal of his personal bid.
On May 2, 2023, Go First filed a voluntary plea for insolvency under Section 10. On May 10 2023, the NCLT admitted the plea and appointed a resolution professional to run the affairs of the company.
The airline owes its creditors more than Rs 6,200 crore. Central Bank of India, Bank of Baroda and IDBI Bank are the secured creditors, with admitted claims of Rs 1,934 crore, Rs 1,744 crore and Rs 75 crore, respectively.