Safiya Malik

The National Company Law Tribunal (NCLT) has ordered the liquidation of Go First Airways, a budget airline that had filed for insolvency in 2023. The decision came following an application by the Committee of Creditors (CoC), which determined that the company could no longer be revived. A bench comprising Judicial Member Mahendra Khandelwal and Technical Member Dr. Sanjeev Ranjan issued the order on January 20, 2025, stating, “Liquidation is ordered.”

Go First Airways voluntarily initiated insolvency proceedings on May 2, 2023, under Section 10 of the Insolvency and Bankruptcy Code (IBC), seeking to enter the Corporate Insolvency Resolution Process (CIRP). The NCLT admitted the application on May 10, 2023, appointing a Resolution Professional (RP) to manage the airline’s affairs.

The case took a contentious turn when lessors of Go First challenged the retention of their assets under the moratorium imposed by Section 14 of the IBC. These lessors contended that their leases were terminated before the insolvency proceedings began. On May 22, 2023, the National Company Law Appellate Tribunal (NCLAT) upheld the NCLT’s decision to impose the moratorium but directed the lessors to seek clarifications directly from the NCLT.

The lessors then approached the Delhi High Court, requesting the Directorate General of Civil Aviation (DGCA) to deregister their aircraft. Initially, the DGCA resisted the deregistration, citing the ongoing moratorium. However, on October 4, 2023, the Ministry of Corporate Affairs clarified that Section 14(1) of the IBC did not apply to transactions involving aircraft, engines, airframes, or helicopters.

In response, the DGCA filed an affidavit with the Delhi High Court affirming the exemption’s applicability to pending cases but deferred action on Go First’s case, citing its sub judice status. On April 26, 2024, the Delhi High Court ordered the DGCA to deregister the airline’s fleet, a process completed by May 2024. The maintenance and export of deregistered aircraft were then entrusted to the lessors under Rule 32A of the Aircraft Rules.

With no operational aircraft and limited prospects for revival, the CoC resolved in September 2024 to liquidate the airline. An application for liquidation was filed, and after reviewing submissions from stakeholders, the NCLT passed the liquidation order.

In its deliberations, the NCLT examined the timeline of Go First’s insolvency proceedings, including the CoC’s decision to liquidate the company due to its inability to resume operations. The tribunal considered the exemption provided under Section 14(1) of the IBC for aircraft-related transactions, which had facilitated the deregistration of Go First’s fleet.

The bench noted the airline’s lack of assets and viable revival strategies as key reasons for approving the liquidation. In October 2024, the bench expressed concerns regarding the appointment of the company’s Resolution Professional (RP), Shailendra Ajmera, as the liquidator.

Following this, the Committee of Creditors (CoC) appointed Dinkar Venkatasubramanian to serve as the liquidator.

Advocate Vishnu Sriram represented the CoC, while the Resolution Professional was represented by advocate Diwakar Maheshwari.

The detailed order, including specific instructions on the liquidation process, is awaited.

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Bench: Judicial Member Mahendra Khandelwal and Technical Member Dr. Sanjeev Ranjan