NCLT again gives 60 days' time to Go First, gets extension for the fourth time to complete the insolvency process
NCLT has given a 60-day extension to its Go First. This is the last 60-day extension given to airlines to complete their insolvency process. Earlier, Go First was given a 60-day extension which was going on from 8 April 2024 to 3 June. Let us know about it in detail.
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Go First, an airline struggling to find a buyer has been given a final 60-day extension by the National Company Law Tribunal (NCLT) to complete its insolvency process. This extension is being given to the airline for the fourth time.
The previous extension of 60 days given on April 8, 2024, expired on June 3. With this new extension, Go First's corporate bankruptcy resolution process (CIRP) will now end on August 3, 2024. The NCLT bench in Delhi granted the additional time, stressing that this is the 'final extension'.
The resolution professional (RP) representing Go First requested the extension due to 'an extraordinary situation' following the Delhi High Court's ruling. The court had directed the DGCA (Directorate General of Civil Aviation) to deregister all 54 aircraft of Go First.
This development has encouraged interested purchasers to amend their bids, and lenders want time to review these changes. The two-member NCLT bench rejected the extension request.
The IBC mandates that the CIRP be completed within 330 days, including any litigation time. Ideally, according to Section 12(1) of the Code, the CIRP should be completed within 180 days. However, extensions and judicial processes are permitted to extend this time restriction within the 330-day period. If the process is not completed within 330 days, the company is required to liquidate.
Go First ceased operations on May 3, 2023, and filed for voluntary bankruptcy resolution proceedings on May 10, 2023. This extension highlights the challenges faced by Go First in securing a buyer and reviving its operations.
