The National Company Law Tribunal has directed the suspended board of Go First to respond within three weeks regarding the airline's potential liquidation.
On Tuesday, a two-member bench of the NCLT issued a notice to the airline's suspended management and scheduled the matter for hearing in the first week of October.
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The NCLT's directive followed an application by the airline's resolution professional under Section 33 (1) of the Insolvency & Bankruptcy Code, requesting liquidation due to the lenders' inability to secure a suitable buyer within the prescribed timeframe.
During the proceedings, Go First's counsel informed the tribunal that the committee of creditors had voted by majority to liquidate the company.
In June, the NCLT granted Go First a 60-day extension to complete the Corporate Insolvency Resolution Process— the airline's fourth extension. The tribunal emphasised that this was the final extension. Under the IBC, CIRP must be completed within 330 days, including any litigation period.
While the Code initially mandates a 180-day completion period for CIRP, the maximum allowed time, including extensions, is 330 days. If this timeframe is exceeded, the corporate debtor must be liquidated.
On May 10, 2023, the NCLT admitted Go First's plea to initiate voluntary insolvency resolution proceedings, following the airline's cessation of operations on May 3.
(With inputs from PTI)
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