The National Company Law Tribunal on Monday ordered the liquidation of low-cost carrier Go First.
The order was pronounced by the Delhi bench of the NCLT, comprising judicial member Mahendra Khandelwal and technical member Sanjeev Ranjan.
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.
The airline had filed the insolvency application after citing a severe funding crunch. It attributed its insolvent state to US engine-maker Pratt & Whitney's "defective and failing engines".
In June last year, the NCLT granted Go First a 60-day extension to complete the Corporate Insolvency Resolution Process— the airline's fourth such 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 time frame is exceeded, the corporate debtor must be liquidated.
In September thereafter, Go First's counsel informed the tribunal that the committee of creditors had voted by majority to liquidate the company. This move followed the lenders' inability to secure a suitable buyer within the prescribed time frame.
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