NCLT reserves order on Go First’s plea for interim moratorium, bankruptcy

The cash-strapped airline Go First filed for bankruptcy on Tuesday and as an interim measure sought a moratorium to prevent lessors from taking possession of planes

The principal bench of the National Company Law Tribunal (NCLT) on Thursday reserved its order on a plea by Go First seeking an interim moratorium to prevent the seizure of its 26 aircraft.

Go First filed for insolvency resolution proceedings in the National Company Law Tribunal (NCLT) on Tuesday (Representative Photo)

The cash-strapped airline Go First filed for bankruptcy on Tuesday and as an interim measure sought a moratorium to prevent lessors from taking possession of planes.

This was, however, opposed by the lessors representing 26 aircraft who challenged these proceedings contending that “this would jeopardise their contractual rights, adding that they want their aircraft back”.

In its application before the NCLT, Go First sought a declaration of bankruptcy under the Insolvency and Bankruptcy Code and create corporate insolvency resolution proceedings against itself.

During the hearing, senior advocate P Nagesh representing the airline told the court that if they lose the aircraft, the airline’s business would come to a halt.

The advocate also argued that the move to seize aircraft would affect around 7,000 employees working with the company. The plea also said that around 10,000 indirect employees will also be affected.

During the hearing, the Tribunal observed that there are no provisions in IBC for an interim moratorium.

After hearing the arguments, the court reserved its order.