New Delhi: Beleaguered Wadia Group airlines, Go First, on Thursday pleaded to the National Company Law Tribunal (NCLT) here for an interim moratorium after facing an acute cash crunch. The airline has also sought direction to appoint an insolvency resolution process (IRP) for the betterment of Go First.
The NCLT, after the hearing, reserved its order on Go Airlines’ plea. According to the Insolvency and Bankruptcy Code (IBC), the effect of such an interim moratorium is that all pending legal proceedings with respect to any ‘debt’ are deemed to have been stayed.
“We are reserving the order,” said the NCLT two-judge bench of the Delhi office, headed by Justice Ramalingam Sudhakar, and a technical member LN Gupta.
Crisis-hit Go First had sought various interim directions from the NCLT bench, including restraining lessors from taking back aircraft, and regulator Directorate General of Civil Aviation (DGCA) from taking any adverse action against the airline.
It is to be noted that the Wadia group-owned airline has liabilities worth around Rs 11,000 crore.
Senior Advocate Neeraj Kishan Kaul, representing Go First Airlines, said that it has filed a section 10 petition under the IBC - (Insolvency and Bankruptcy Code). Every condition has been satisfied. Promoter has invested around Rs 290 crore amount of money in April 2023.
“The objective of the IBC is to ensure that a company is having some going concern and not ground it,” Kaul told the NCLT.
During the course of the hearing, Kaul pleaded to the NCLT Court that there was a scope for the company to be revived and requested that the interim moratorium be granted. The airline also accepted that it is going through a huge financial crisis.
Kaul also told the NCLT bench that the lenders are moving to freeze accounts and lessors are terminating agreements. There is a huge scope for revival since fundamentals are in place.
Go First Airlines further told the NCLT bench that it was there (at the NCLT) because of the engine supplier, otherwise, it had an impeccable financial record in every aspect.