MUMBAI- On Monday (July 31, 2023), the National Company Law Tribunal (NCLT) issued notices to the Committee of Creditors of Go First (G8) and the insolvency regulator IBBI regarding a plea to refund ₹ 597.54 crore to approximately 15.5 lakh passengers who had booked tickets for travel on and after May 3.
The resolution professional (RP) of Go First, which faced a crisis and suspended operations on May 3, has approached the NCLT seeking permission to refund money to passengers, including those who booked flights until July 10.
Go First Refunds
Senior advocate Ramji Srinivasan, representing the RP, stated that this refund is in accordance with the business plan aimed at reviving the grounded airline.
The NCLT bench, comprising Mahendra Khandelwal and Rahul P Bhatnagar, stated that the feasibility and implementation of such a business plan should be “subject to suggestions of members of Committee of Creditors (CoC).”
The bench instructed the Resolution Professional to obtain explicit approval from the lenders regarding the refund of the amount.
Srinivasan informed the court that the CoC is aware of the business plan and has already approved it. However, he requested time to verify if the CoC has also approved the specific refund plan.
The tribunal emphasized the importance of having a clear resolution for the refund payment, considering that plans can change. It also inquired if there were any objections filed against the refund plan.
In response, Srinivasan stated that the refund is in the public interest. Further suggested involving the Insolvency and Bankruptcy Board of India (IBBI), the regulatory authority, in the matter.
Acknowledging the suggestion, the bench issued notices to the CoC of Go First and IBBI, requiring them to submit their responses. Furthermore, the case is scheduled for the next hearing on August 7.
NCLT Action
The NCLT stated, “We are issuing notices to the CoC and IBBI, requesting them to submit their replies. The next hearing for the case will be on August 7.”
Go First suspended its flight operations on May 3, 2023, and voluntarily applied for the initiation of the Corporate Insolvency Resolution Process (CIRP) due to technical challenges arising from the unavailability of engines supplied by Pratt & Whitney.
On May 10, the NCLT accepted Go First’s plea to begin voluntary insolvency resolution proceedings.
If approved by the insolvency tribunal, this move would offer considerable relief to the passengers whose funds are currently held by G8 following the initiation of the Corporate Insolvency Resolution Process (CIRP).
Previously, many air passengers had directly reached out to NCLT through email requests and phone calls, seeking refunds for their canceled bookings.
In response to this, the NCLT issued an advisory on July 3, instructing them to approach the RP (Resolution Professional) to claim refunds following the procedure outlined in the Insolvency & Bankruptcy Code (IBC).
Photo By: Harsh Tekriwal (@avgeekwithlens) • Instagram photos and videos
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