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Business News/ Companies / News/  Go First lessors’ plea to be heard Monday
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Go First lessors’ plea to be heard Monday

A bench led by Justices Ashok Bhushan and Barun Mitra will take up the petition filed by SMBC Aviation Capital, one of the lessors of Go Air, seeking a stay on the bankruptcy court’s order.

Currently, Go First owes more than ₹10,000 crore to its financial and operational creditors. (Representative Photo) (HT_PRINT)Premium
Currently, Go First owes more than 10,000 crore to its financial and operational creditors. (Representative Photo) (HT_PRINT)

MUMBAI : The National Company Law Appellate Tribunal (NCLAT) on Friday deferred the matter pertaining to Go First lessors’ petition seeking a stay on a bankruptcy court order allowing voluntary insolvency of the low-cost airline to Monday.

A bench led by Justices Ashok Bhushan and Barun Mitra will take up the petition filed by SMBC Aviation Capital, one of the lessors of Go Air, seeking a stay on the bankruptcy court’s order.

Essentially, the Delhi bench of the National Company Law Tribunal (NCLT) on Wednesday allowed a petition filed by Go First seeking the initiation of voluntary insolvency proceedings and imposition of an interim moratorium under the Insolvency and Bankruptcy Code (IBC).

Under the moratorium, lessors will not be able to get their planes back from the resolution professional who currently has possession of these planes.

Wednesday’s NCLT order also prohibited initiating suits or continuation of pending suits or proceedings against the airline, including the execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority. This came after the Wadia Group-backed low-fare airline filed for insolvency on 2 May after announcing the suspension of flights for 3 and 4 May.

In its petition before the appeals court, SMBC alleged that the initiation of voluntary insolvency by Go First was, in fact, a ‘fraudulent exercise’.

Arun Kathpalia, senior counsel appearing for the lessor, argued that it had terminated its lease with Go First before the moratorium and now wants to repossess the aircraft through insolvency. “Go First has no rights over the planes, which it does not own," he said.

On the other hand, Go First stated that it has already invested 200 crore in the company just to keep it as a going concern. Therefore, the allegations of mala fide on the part of the company’s erstwhile management were baseless, it said.

Currently, Go First owes more than 10,000 crore to its financial and operational creditors.

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ABOUT THE AUTHOR
Priyanka Gawande
Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
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Published: 12 May 2023, 11:06 PM IST
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