New Delhi [India], May 10 : Budget airline Go First on Wednesday said the National Company Law Tribunal's order of admitting its plea for insolvency is a "historic ruling".
The budget airline on last Thursday had filed a petition with the National Company Law Tribunal (NCLT), seeking protection under bankruptcy law. It had also sought an interim moratorium to prevent the seizure of its 26 aircraft by aircraft lessors.
After the NCLT decision, Go First Chief Executive Officer Kaushik Khona said, "This is a historic ruling as an application of insolvency has been admitted so fast. The order prevents a viable airline from becoming an unviable one. The purpose of IBC has always been revival."
Earlier, the NCLT bench comprising Justice Ramalingam Sudhakar and technical member LN Gupta announced the order, stated, "We appoint Abhilash Lal as IRP (Insolvency Resolution Professional). Suspended board of directors will cooperate with the IRP."
The NCLT court also said, "The suspended directors are also ordered to deposit Rs 5 crore to make the immediate expenses."
On the moratorium sought by the airline, it said, "The necessity of going into the merits of the application is that the Section 10 is already been admitted in respect of the corporate applicant and the moratorium is already being initiated."
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.
Crisis-hit Go First had sought various interim directions from the NCLT bench, including restraining lessors from taking back aircraft, and the Directorate General of Civil Aviation (DGCA) from taking any adverse action against the airline.
The Wadia Group-owned airline has liabilities worth around Rs 11,000 crore.
Go First said that its bank account with the consortium is frozen, and it pleaded to the NCLT Court to defreeze its bank account.
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