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Informist, Wednesday, Aug 21, 2024

 

NEW DELHI – The Delhi bench of the National Company Law Tribunal today rejected a plea by Mack Star Marketing Pvt Ltd seeking physical possession of its property in Andheri in Mumbai, which was licenced to debt-ridden Go First. 

 

"... since the respondent (Go First) is in the corporate insolvency resolution process, recovery of any property in possession of the corporate debtor, though as a lessor, is not permissible in terms of Section 14(1)(d) (of Insolvency and Bankruptcy Code, 2016)," the tribunal aid.

 

In its petition, Mack Star said despite repeated requests, Go First failed to vacate the premises and unlawfully retained possession of the premises.

Mack Star also asked the tribunal to direct Go First's resolution professional to pay the pending licence fees for use of the premises. It sought 18.02 mln rupees towards the shortfall in licence fees and 238.67 mln rupees towards liquidated damages.

 

The dispute has its genesis in an agreement between Mack Star and Go First, under which the airline was allowed to use the property in Andheri. According to the terms of the agreement, Go First had to pay licence fees to Mack Star for the premises by the 10th of every month. Mack Star said Go First defaulted on payments and the agreement was terminated in 2022. 

 

Since the dues are for a period before the initiation of the corporate insolvency resolution process in Go First, the tribunal asked Mack Star to file claims for its outstanding licence fee dues. Regarding the liquidated damages, the tribunal said the dispute related to the period before insolvency, on which it cannot adjudicate.

 

Go First filed for voluntary insolvency in the face of a financial crunch due to the non-supply of engines by US-based Pratt & Whitney, which forced the airline to ground 28 of its 56 aircraft. Go First owes more than 65 bln rupees to its lenders. The insolvency petition was admitted by the tribunal in May 2023.   End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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