National Company Law Tribunal, New Delhi: In an application file seeking initiation of liquidation proceeding of Go Airlines (India) Limited under Section 33(2) of Insolvency and Bankruptcy Code, 2016 (IBC) based on CoC resolution, a Division bench of Mahendra Khandelwal* (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), allowed the liquidation of Go Airlines (India) Limited (Corporate Debtor).
In the instant matter, the Corporate Insolvency Resolution Process (CIRP) for Go Airlines (India) Limited (Corporate Debtor) was initiated on 10-05-2023 under Section 10 of IBC. Initially, an Interim Resolution Professional (IRP) was appointed but later replaced by current Resolution Professional (RP) on 15-06-2023.
The Committee of Creditors (CoC), in its 37th meeting on 23-07-2024, resolved to liquidate the Corporate Debtor with 100% voting approval due to non-viable and non-compliant resolution plans. CoC recommended appointing Mr. Dinkar T. Venkatasubramanian as the Liquidator. The estimated liquidation cost of ₹21.6 crores, to be funded by CoC members proportionate to their voting share. Litigation funding from Burford Capital under a Capital Provision Agreement (CPA) was approved to cover arbitration costs for proceedings at SIAC.
The applicant filed the present application under Section 33(2) read with Section 34 of the IBC read with Regulation 40D of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Liquidation Regulations”) along with Rule 11 of the NCLT, Rules, 2016 for issuance of directions for liquidation of the Go Airlines, appoint Mr. Dinkar T. Venkatasubramanian as the Liquidator, approve CPA terms and treat related costs as liquidation expenses under Section 5(16) of IBC and publicly announce the liquidation order and notify the Registrar of Companies.
The NCLT noted that “it is well settled that decision taken by the CoC for liquidation in commercial wisdom of the CoC should not be interfered with by the Adjudicating Authority.” The NCLT observed that the CoC’s unanimous vote for liquidation and the non-viability of resolution plans justified the application. The NCLT sees no merit in interfering with the commercial wisdom of the CoC.
The NCLT noted that the CoC’s approval of liquidation costs aligned with Regulation 39B of CIRP Regulations and the members affirmed their commitment to funding, including contributions for SIAC arbitration proceedings.
The NCLT referred to Bar Council of India v. AK Bala Ji, (2018) 5 SCC 379 and Tomorrow Sales Agency (P) Ltd. v. SBS Holdings Inc., 2023 SCC OnLine Del 3191, where the Court held that third-party litigation funding is permissible under Indian law. The NCLT recognised the legitimacy of third-party litigation funding and declared CPA-related costs as part of liquidation costs.
The NCLT allowed the application, ordered liquidation of Go Airlines (India) Limited, appointed Mr. Dinkar T. Venkatasubramanian as Liquidator, and approved the related prayers for procedural compliance.
[Shailendra Ajmera v. Go Airlines (India) Ltd., I.A. (Liq.) 33/ND/2024 in CP IB — 264/PB/2023, Decided on 20-01-2025]
*Judgment by Mahendra Khandelwal (Judicial Member)
Advocates who appeared in this case:
Mr. Ritin Rai, Sr. Adv., Mr. Diwakar Maheshwari, Mr. Vishnu Shriram, Ms. Pratiksha Mishra, Counsel for the Appellant/Resolution Professional
Mr. Mustafa Doctor, Sr. Adv. with Ms. Anshula Grover, Mr. Lenpithang Sithlou, Counsel for the Suspended Management