The National Company Law Tribunal (NCLT), Delhi on Monday issued notice to the Company of Creditors (CoC) of Go First to reply if they have given their approval to refund passengers for their advanced bookings since the insolvent airline’s grounding on May 3.
According to the resolution Professional (RP), Go First has to refund Rs 597.54 crore to 15.5 lakh passengers, which includes advanced bookings till June 7. As many as 15,25,862 passengers have booked tickets through travel agents amounting to Rs 582.77 crore and 23,711 passengers have booked tickets on the company website amounting to Rs 14.77 crore.
CoC is a group of lenders that represent the interests of all stakeholders in the insolvency process. An RP, meanwhile, looks after a company after it has been admitted as insolvent/bankrupt.
The NCLT has also issued a notice to the Insolvency and Bankruptcy Board of India (IBBI) seeking their response in the matter. The case will now be heard on August 7.
Appearing for the RP, Senior Advocate Ramji Srinivasan, said that the process of refund to passengers is a part of Go First’s revival plan and the CoC has given its approval for the plan. “Prior to the processing of refunds, the RP will be approaching the NCLT to seek approval of customer refunds in terms of the resumption plan so as to ensure that the same is in due compliance with the provisions of Insolvency and Bankruptcy Code (IBC) and the regulations framed thereunder,” he submitted.
Go First (Corporate Debtor) on May 2 announced the cancellation of its flights on May 3 and 4 and the same has been extended till June 24. However, post-cancellation, Go has continued booking till June 7, the RP submitted.
Srinivasan also said that since the CoC has given its approval for the revival plan which includes ticket refunds. We can start the process and continue doing so when the airline starts flying again, he said.
“For the benefit of stakeholders of the Corporate Debtor (CD) and for the purpose of preserving its value, it is critical that the CD resumes its operations expeditiously and continues its business as a growing concern. In this regard, pursuant to the provisions of IBC, in-principle approval of the CoC be and is hereby accorded for implementing the business plan for resuming the commercial operations of the CD and continuing to keep it afloat as a going concern. Members of CoC hereby authorise the RP to take appropriate steps to give effect to this resolution,” the RP submitted the authorisation of CoC before the tribunal.
At this juncture, the bench asked the RP to seek clarity from the CoC whether they have especially given their approval to start the process of refund.
The RP said that they will come back with a reply in the next hearing.
The NCLT issued an advisory on July 3 asking the ticket holders to make their claims with the RP for a refund of cancelled tickets.
It is to be noted that the Directorate General of Civil Aviation (DGCA) on July 21 gave a green signal to the cash-strapped airline to resume operations after proving it has the required funds and the regulator’s nod for the flight schedule.
NCLT on July 26 said Go First could fly aircraft in its possession if those planes were still registered with the civil aviation regulator. The airline had filed for insolvency in the first week of May.