NCLT Accepts Delhivery's Notice Declaring Go First's Insolvency As Fraudulent And Malicious: Report
Delhivery's counsel has stated that Go First, an airline owned by the Wadia group, received a payment of Rs 57 lakh on 2 May as an advance for future services, despite knowing that they were planning to file for insolvency
According to media reports, the National Company Law Tribunal (NCLT) has accepted logistics courier service provider Delhivery’s notice, declaring Go First's voluntary insolvency resolution as fraudulent and malicious. The NCLT has given the interim resolution professional (IRP) of Go First a period of two weeks to respond to the notice.
Delhivery's counsel has stated that Go First, an airline owned by the Wadia group, received a payment of Rs 57 lakh on 2 May as an advance for future services, despite knowing that they were planning to file for insolvency. Such initiation of insolvency proceedings, if found to be fraudulent and malicious under Section 65 of the Insolvency and Bankruptcy Code (IBC), 2016, can lead to penalties ranging from Rs 1 lakh to Rs 1 crore.
Earlier, it was reported that Go First, facing financial difficulties, had requested an interim moratorium during the hearing of its voluntary insolvency plea in the Delhi chapter of the NCLT on 4 May. However, the NCLT informed the airline that an interim moratorium was not possible.
In the meantime, the Directorate General of Civil Aviation (DGCA) is currently evaluating the flight resumption plan submitted by Go First, which is undergoing bankruptcy proceedings. Civil aviation minister Jyotiraditya Scindia mentioned this development, indicating that efforts are being made to assess the airline's situation.
Go First, based in Mumbai, suspended its operations on 3 May and filed for insolvency in the NCLT a day prior. The low-cost airline had a market share of around 7 per cent as of March and operated over 300 flights per day before suspending its operations.
Following the airline's suspension of flights, airfares have significantly increased. Last-minute airfares for routes heavily served by Go First, such as Delhi-Pune, have risen to approximately Rs 16,000 from just over Rs 6,000 in late April. Similarly, spot airfares for flights from Delhi to Ahmedabad have also surged, reaching around Rs 16,000 compared to approximately Rs 3,000 at the end of April, as reported by the travel website Ixigo.