NCLAT dismisses appeals against Go First Airways liquidation

The National Company Law Appellate Tribunal (NCLAT) on Friday dismissed appeals challenging the National Company Law Tribunal (NCLT) order directing the liquidation of Go First Airways..A coram of Chairperson Justice Ashok Bhushan and Technical Members Barun Mitra and Arun Baroka held,"We do not find any infirmity in the order of Adjudicating Authority. These appeals deserve to be dismissed."A copy of the order is awaited. .The appeals were filed by Busy Bee Airways, Bhartiya Kamgar Sena Mumbai and Captain Arjun Dhawan, among others. Busy Bee, which had earlier placed a bid for the airline, contended that the Committee of Creditors (CoC) decided to liquidate the airline before it could place a renewed bid..On May 2, 2023, Go First filed a voluntary plea under Section 10 of the Insolvency and Bankruptcy Code (IBC), seeking admission to the Corporate Insolvency Resolution Process (CIRP). The NCLT admitted the application on May 10, appointing a Resolution Professional (RP) to manage the airline's affairs.In response, the airline's lessors appealed to the NCLAT, arguing that their assets had been unfairly retained under the moratorium despite the termination of leases before the proceedings began.On May 22, 2023, the NCLAT upheld the NCLT's decision and directed the lessors to seek clarification regarding the moratorium from the NCLT.The lessors subsequently approached the Delhi High Court, urging the Directorate General of Civil Aviation (DGCA) to de-register their aircraft. Initially, the DGCA resisted, citing the moratorium. However, on October 4, 2023, the Ministry of Corporate Affairs clarified that Section 14(1) of the IBC would not apply to transactions involving aircraft, engines, airframes or helicopters.The DGCA then submitted an affidavit before the Delhi High Court affirming that the exemption should apply to pending cases, but deferred action on Go First’s case, citing its sub judice status.On April 26, 2024, the Delhi High Court ordered the DGCA to de-register the airline’s fleet, which was completed by early May 2024. Maintenance and export of the de-registered aircraft were assigned to the lessors under Rule 32A of the Aircraft Rules.Given that there were no available aircraft and no viable revival options, the CoC decided in September 2024 to liquidate the company and filed the application for the same..In October 2024, the NCLT had raised apprehensions about permitting the company’s RP Shailendra Ajmera to be its liquidator. The tribunal also questioned whether it could give its seal of approval for third party funding to pursue arbitration at Singapore International Arbitration Centre (SIAC).Subsequently, the CoC named Dinkar Venkatasubramanian as its liquidator, which the tribunal approved in its order.On January 20 this year, the NCLT had called for the liquidation of the airline..BusyBee was represented by Senior Advocate Krishnendu Dutta with Advocates Apoorv Agarwal, Prachi Darji, Saloni Singh, Alina Mathew, Tushar Gadia, Ritika Prasad, Kamakshraj Singh and Abhiraj Das..Go First's liquidator was represented by Senior Advocate Ritin Rai with Advocates Diwakar Maheshwari, Vishnu Shriram, Pratiksha Mishra and Shreyas Endupugant..The CoC was represented by Advocates Dheeraj Nair, Angad Baxi, Vishrutyi Sahani and Fatema Kachewala.