NCLT issues notice to creditors, regulator over Go First ticket refunds

The National Company Law Tribunal (NCLT) on Monday issued notices to the Committee of Creditors of crisis-ridden Go First and insolvency regulator IBBI over a plea to refund Rs 597.54 crore to around 15.5 lakh passengers who had booked tickets for travel on and after May 3. The resolution professional (RP) of Go First, which suspended operations on May 3, has approached the tribunal to seek permission for refunding money to passengers, some of whom booked flights till July 10. Senior advocate Ramji Srinivasan representing RP said that this has been done as per the business plan to revive the grounded airline. The NCLT bench comprising Mahendra Khandelwal and Rahul P Bhatnagar said that the feasibility and implementation of such a business plan should be “subject to suggestions of members of Committee of Creditors (CoC)”. The bench asked the Resolution Professional to take specific approval from the lenders over the refund of the amount. Srinivasan said the CoC is aware of this, it has already envisaged the business plan and approved it. However, he sought time from the tribunal to check whether this particular refund plan has been approved by the CoC or not. The tribunal indicated as plans keep on changing, it would be better if a specific resolution over payment for refund is taken. It also wanted to know whether anyone has filed an objection to this refund plan. On this, Srinivasan said it is done in the public interest and suggested bringing the Insolvency and Bankruptcy Board of India (IBBI), which is a regulator into this issue. The bench has issued notices to the CoC of Go First and IBBI directing them to file their replies and posted the matter for the next hearing on August 7. “We issue notice to the CoC, IBBI and direct them to file their replies. We will hear the case further on August 07,” said NCLT. Go First stopped flying on May 3, 2023, and approached voluntarily for initiation of CIRP against it, as it was unable to fly due to technical difficulties faced by the non-availability of engines from Pratt & Whitney. On May 10, the NCLT admitted the plea of Go First to initiate voluntary insolvency resolution proceedings. If permitted by the insolvency tribunal, this would be a significant relief for those air passengers, whose money is stuck with the Go First after the initiation of the Corporate Insolvency Resolution Process (CIRP). Earlier, several air passengers had approached NCLT directly by writing e-mail requests/phone calls for refunds of booked cancelled tickets. On this, the NCLT issued an advisory on July 3, asking them to approach the RP to claim a refund as per the procedure of the Insolvency & Bankruptcy Code (IBC).