NCLAT has upheld the May 10 decision of NCLT regarding the company.Image Credit source: File Photo
Monday was a relief for budget airlines GoFirst. The companies that hired the aircraft to the company had asked the National Company Law Appellate Tribunal (NCLAT) to pursue the insolvency process, but the NCLAT has upheld the relief granted to GoFirst from the NCLT in this matter.
GoFirst had moved the National Company Law Tribunal (NCLT), declaring itself bankrupt. The company had requested the NCLT to grant relief from initiation of insolvency proceedings against it, which was accepted and the company was given some time to revive itself.
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However, the aircraft rental companies to GoFirst didn’t stop here. Challenging this ‘stay’ decision of NCLT, he appealed to NCLAT to start bankruptcy process against Go First. The company wants to get its planes back from the company, but the NCLAT has upheld the decision of the NCLT.
Arguments of aircraft companies did not work
Aircraft lessors to GoFirst include SMBC Aviation Capital and GY Aviation Leasing Company of CDB Aviation. It was he who approached NCLAT and appealed to GoFirst to get his aircraft back. But the arguments of the companies in NCLAT did not work.
While disposing of the petition of these lease companies, NCLAT said that they should keep their point in front of NCLT. These companies can present their views before the Interim Resolution Professional, as he has the right to initiate insolvency proceedings against the company.
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Rental aircraft will remain with GoFirst
NCLAT’s decision is going to give relief to Go First. The company has a total of 54 aircraft, out of which about 50 percent of the aircraft are not in flying condition due to the bad engine of Pratt & Whitney. In such a situation, if the rest of the aircraft were also taken back by the lease companies, then it would have become difficult for the company to remain operational.