Go First to Refund ₹597 Crore to Approx. 15.5 Lakh Passengers

The National Company Law Tribunal (NCLT) has recently taken a significant step in the ongoing crisis surrounding Go First, issuing notices to the Committee of Creditors (CoC) of Go First and the Insolvency and Bankruptcy Board of India (IBBI).

The notices were issued in response to a plea seeking a refund of Rs 597.54 crore to approximately 15.5 lakh passengers who had booked tickets for travel on or after May 3.

Go First Seeks Approval for Passenger Refunds

The resolution professional (RP) of Go First, the beleaguered airline that suspended operations on May 3 due to operational difficulties, approached the NCLT with a proposal to refund money to affected passengers. The RP stated that this step aligns with the business plan aimed at reviving the grounded airline.

NCLT’s Stand and Committee of Creditors’ Approval

The NCLT bench, comprising Mahendra Khandelwal and Rahul P Bhatnagar, opined that the feasibility and implementation of the business plan should be subject to the suggestions of the Committee of Creditors.

The bench directed the Resolution Professional to obtain specific approval from the lenders regarding the refund amount.

While the RP claimed that the CoC was aware of the business plan and had already approved it, the tribunal emphasized the importance of a specific resolution for the payment of refunds, considering the dynamic nature of plans. It also sought information about any objections filed against the refund plan.

Involvement of the Insolvency and Bankruptcy Board of India (IBBI)

Senior advocate Ramji Srinivasan, representing the RP, argued that the refund initiative was taken in the public interest and proposed involving the Insolvency and Bankruptcy Board of India (IBBI) in the matter.

Next Hearing Scheduled

In light of the arguments presented, the NCLT issued notices to the CoC of Go First and the IBBI, directing them to file their replies. The tribunal scheduled the next hearing on August 7 to further deliberate on the case.

Background on Go First’s Insolvency Resolution Proceedings

Go First, facing technical difficulties due to the non-availability of engines from Pratt & Whitney, ceased operations on May 3, 2023, and voluntarily initiated Corporate Insolvency Resolution Process (CIRP) against the airline. The NCLT admitted Go First’s plea for insolvency resolution proceedings on May 10, 2023.

A Glimmer of Hope for Passengers

If approved by the insolvency tribunal, the refund to the stranded passengers would come as a significant relief for those whose funds have been stuck with the airline since the initiation of CIRP.

NCLT’s Advisory to Air Passengers

Previously, several air passengers directly approached the NCLT, seeking refunds for their cancelled bookings. On July 3, the NCLT issued an advisory, instructing them to claim refunds through the Resolution Professional following the procedure under the Insolvency & Bankruptcy Code (IBC).

(With Inputs from PTI News)