NCLT grants 60-day extension to Go First Airlines for insolvency resolution

The National Company Law Tribunal (NCLT) at Delhi on April 8 granted another 60-day extension to Shailendra Ajmera, resolution professional (RP) of Go First Airlines, to complete the corporate insolvency resolution process (CIRP) of the company..A coram of judicial member Mahendra Khandelwal and technical member Sanjeev Ranjan allowed the extension keeping in mind the interests of the stakeholders. This extension will be effective till June 3..As per the Insolvency and Backruptcy Code, a company declared insolvent gets 180 days to complete the insolvency process before the liquidation process can begin.NCLT can grant an extension of 90 days. However, the maximum period for completing the resolution process as per Section 12 of the IBC is 330 days. If the RP seeks an extension beyond the 330-day limit, NCLT can grant an extension for upto 60 days if deemed necessary..Go First exhausted the maximum limit of 330 days on April 4. Accordingly, it approached NCLT through Khaitan & Co seeking extension of CIRP under exceptional circumstances..The Tribunal permitted the special-case extension beyond 330 days after relying upon the Supreme Court order in the Essar Steel case, which effectively eliminated the mandatory 330-day deadline. It was informed that the two resolution plans were being finalised..The airline company initiated the voluntary insolvency process as it was experiencing losses due to allegedly faulty engines supplied by American company Pratt & Whitney (P&W). It claimed that the grounding of its aircrafts increased from 31% in 2020 to more than 50% in April 2023 and that this cost the company a loss of over ₹10,800 crore. NCLT admitted the plea on May 10 and declared a full moratorium for the company.