Go First To Return Rs 597 Cr To Around 15.5 Lakh Passengers, NCLT Issues Notice To CoC & IBBI

The National Company Law Tribunal (NCLT) on Monday issued notices to the Committee of Creditors of Go First and insolvency regulator IBBI over a plea to refund Rs 597.54 crore to around 15.5 lakh passengers who booked tickets for travel on and after May 3. 
    
The resolution professional (RP) of crisis-ridden Go First, which suspended operations on May 3, has approached the NCLT to seek permission for refunding money to passengers, some of whom booked flights till July 10.   
    
Senior advocate Ramji Srinivasan representing RP said that this has been done as per the business plan to revive the grounded airline.
    
The NCLT bench comprising Mahendra Khandelwal and Rahul P Bhatnagar said that the feasibility and implementation of such a business plan should be "subject to suggestions of members of Committee of Creditors (CoC)".

The bench asked the Resolution Professional to take specific approval from the lenders over the refund of the amount.
    
Srinivasan said the CoC is aware of this, it has already envisaged the business plan and approved it. However, he sought time from the tribunal to check whether this particular refund plan has been approved by the CoC or not.

The tribunal said as plans keep on changing, it would be better if a specific resolution over payment for refund is taken. It also wanted to know whether anyone has filed an objection to this refund plan.

On this, Srinivasan said it is done in the public interest and suggested bringing the Insolvency and Bankruptcy Board of India (IBBI), which is a regulator into this issue.

Agreed by this the bench has issued notices to the CoC of Go First and IBBI directing them to file their replies and posted the matter for the next hearing on August 7. 

"We issue notice to the CoC, IBBI and direct them to file their replies. We will hear the case further on August 07," said NCLT.

Go First stopped flying on May 3, 2023, and approached voluntarily for initiation of CIRP against it, as it was unable to fly due to technical difficulties faced by the non-availability of engines from Pratt & Whitney.

On May 10, the NCLT admitted the plea of Go First to initiate voluntary insolvency resolution proceedings.

If permitted by the insolvency tribunal, this would be a significant relief for those air passengers, whose money is stuck with the Go First after the initiation of the Corporate Insolvency Resolution Process (CIRP).

Earlier, several air passengers had approached NCLT directly by writing e-mail requests/phone calls for refunds of booked cancelled tickets.

On this, the NCLT issued an advisory on July 3, asking them to approach the RP to claim a refund as per the procedure of the Insolvency & Bankruptcy Code (IBC).

Last week, NCLT rejected the pleas of the lessors of aircraft and engines of Go First requesting to restrain the airline from commercial flying and held that aircraft are available for resumption of operations since aviation regulator DGCA has not deregistered them.

NCLT held that physical possession of the aircraft/engines would be "indisputably" with Go First and lessors cannot claim possession during the CIRP of the carrier.

The tribunal also declined the lessors' pleas for inspection of their leased aeroplanes and engines and strongly reiterated that it was the responsibility of the Resolution Professional to maintain them at the highest levels of efficiency/safety.

"The physical possession of the aircraft/engines is indisputable with the corporate debtor (Go First). Therefore, in terms of Section 14(1)(d), the applicants would not be within their rights to claim possession of these aircraft/engines," the NCLT bench said in its 29-page long order passed on the petitions filed by several lessors of Go First.

"The moratorium prohibits the recovery of the aircraft/engines by the lessors (applicants) from the corporate debtor," it added.