Travel agency demands Rs 5.7 crore to become involved in the Go First case

 Travel agency demands Rs 5.7 crore to become involved in the Go First case

On December 1, the National Company Law Tribunal (NCLT) is scheduled to hear the case.

Travel agency Flycreative has filed an intervention plea in the NCLT's Go First case.

Flycreative Private Ltd, a travel and tourist firm, has applied to the National firm Law Tribunal (NCLT) to intervene in the current bankruptcy proceedings involving the grounded airline Go First.

Flycreative has demanded Rs 5.7 crore from Go First in a suit via attorney Naman Joshi, claiming that it has already paid Rs 4.5 crore for group reservations and the release of its Rs 1.2 crore credit shell. Flycreative has argued that the money still owed to Go First was a government loan it took out to resurrect the business after the Covid-19 epidemic under the Emergency Credit Facility Scheme.

Flycreative filed an application alleging that the airline had accepted payment for group reservations for travel in May even though it knew they intended to file for voluntary bankruptcy resolution. Interestingly, as of May 2, 2023, the airline has remained grounded.

On December 1, the NCLT is anticipated to hear the Go First group of cases.

At NCLT, go first insolvency

Go First submitted a petition under Section 10 of the NCLT on May 2, 2023, requesting voluntary admission to the Corporate Insolvency Resolution Process (CIRP). On May 10, the NCLT accepted Go First's plea of bankruptcy and designated a Resolution Professional (RP) to manage the business.

The lessors of the aircraft, however, filed an appeal with the National Company Law Appellate Tribunal (NCLAT) against the NCLT judgment, claiming that their assets had been wrongfully seized from them since they had canceled the leases prior to the moratorium. The NCLAT affirmed the NCLT ruling on May 22 and requested that the lessors submit a suitable application to the NCLT in order to get clarity about the validity of the aircraft ban.

As a result, the lessors filed a motion with the NCLT requesting a waiver of the moratorium and an order prohibiting the airline from utilizing them. But the NCLT refused to issue such a directive and wouldn't let them see or take care of their property. Lessors challenged this ruling before the NCLAT, but the appellate tribunal only made minor changes to the order—allowing Lessors to see their assets.

Meanwhile, a notice exempting aircraft leases from the ban was released by the business affairs ministry. The case was postponed as a result of this and a bench change.

The Director General of Civil Aviation (DGCA) clarified in an affidavit presented in the Delhi High Court that the notification eliminating aviation leases from moratorium under the 2016 revision of the Insolvency and Bankruptcy Code should also apply to pending cases, potentially dealing a blow to the Go First revival plan.