NCLAT REJECTS GO-AIRLINES PLEA AGAINST NCLT, MUMBAI

The National Company Law Appellate Tribunal (NCLAT) rejected a plea by Go Airlines against an order of the National Company Law Tribunal (NCLT) Mumbai, allowing withdrawal of insolvency proceedings against Sovika Aviation Services. 

Go Airlines filed their claim learning about the insolvency proceedings being the operational creditor. NCLT Mumbai permitted an application under section 12 of the Insolvency and Bankruptcy Code (IBC) while the resolution professional was still in the process of verifying the claims.

Section 12 provides withdrawal of insolvency proceedings against a corporation if the withdrawal application receives 90% of the voting share from the Committee of Creditors (CoC). In this instant case, Sovilka sought withdrawal of the Corporate Insolvency Process (CIRP) initiated against it on September 23, 2021.

The CLAT Bench of Justice Ashok Bhushan (judicial member) and Dr Ashok Kumar Mishra (technical member) noted that the CoC had decided to withdraw the Corporate Insolvency Process and found no reason to impede with the NCLT order. Moreover, the bench expressed to Go Airlines that they at their liberty can resort to suitable legal proceedings before an appropriate authority with respect to their claim.

The NCLAT bench further clarified that the decision to dismiss the motion was not based on the merits of Go Airlines' allegation.