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CIRP Timelines, Aircraft Lessors and Liquidation: What the Go First Proceedings Show about Airline Insolvency
An airline in insolvency raises problems that the Insolvency and Bankruptcy Code, 2016 (“IBC”) was not originally designed for: the most valuable assets are leased, they can be flown out of the jurisdiction, and their value falls sharply when they are grounded. The Go First insolvency proceedings brought these issues together and prompted a change in the moratorium framework. This article uses those proceedings to explain how CIRP timelines, the moratorium and liquidation interact.
The Statutory Timeline
Section 12 requires a CIRP to be completed within 180 days from the insolvency commencement date. The Adjudicating Authority may extend the period once by up to 90 days on a resolution of the committee of creditors (“CoC”) passed by at least sixty-six per cent of the voting share. The second proviso, inserted in 2019, requires the process to be completed within 330 days including any extension and the time taken in legal proceedings.
In Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, (2020) 8 SCC 531, the Supreme Court read down the word “mandatorily” in that proviso, holding that in exceptional cases an extension beyond 330 days may be granted where the delay is not attributable to the parties and the process is close to completion. That is the framework under which CIRPs such as Go First’s ran past the outer limit.
The Course of the Go First Proceedings
The Go First insolvency proceedings began when the company filed its own application under Section 10 and was admitted into CIRP by the National Company Law Tribunal, New Delhi in May 2023, with a moratorium declared and an interim resolution professional appointed. Flight operations had been suspended earlier that month. The process was extended more than once while the resolution professional sought resolution applicants.
Lessors contested the treatment of aircraft under the moratorium. As widely reported, all 54 leased aircraft were deregistered or returned to lessors by May 2024 following directions of the Delhi High Court in April 2024.
At its meeting on 23 July 2024 the CoC resolved to seek liquidation, taking the view that the resolution plans received were neither compliant with the IBC nor commercially acceptable. On 20 January 2025 the NCLT ordered liquidation and appointed a liquidator, as reported. Appeals against the liquidation order were subsequently dismissed by the NCLAT, as reported. The CIRP had run for about twenty months.
The Aircraft Question and the 2023 Notification
India is a party to the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol, which provide for remedies including deregistration and export of aircraft on default. The Convention has not been enacted into a dedicated Indian statute, so its effect in India depends on Indian law giving it effect.
The Central Government used Section 14(3)(a) of the IBC, which allows transactions to be notified as exempt from the moratorium, to issue a notification dated 3 October 2023 excluding from the moratorium transactions, arrangements or agreements under the Convention and the Protocol relating to aircraft, aircraft engines, airframes and helicopters.
The effect is that, for CIRPs commencing after that notification, the moratorium under Section 14 does not prevent a lessor from exercising its rights in respect of such equipment. Proceedings that began before the notification generated litigation about whether it applied to them, which is how the Go First aircraft came to be dealt with through the High Court.
What the 2026 Amendments Change for Cases of this Kind
The Insolvency and Bankruptcy Code (Amendment) Act, 2026, in force in the relevant respects from 26 May 2026, addresses several features visible in long-running CIRPs:
- Restoration instead of liquidation. New Section 33(1A) allows the CoC, by at least sixty-six per cent of the voting share, to seek a one-time restoration of the CIRP for up to 120 days before a liquidation order is passed, where no plan has been received or a plan has been rejected.
- Time-bound liquidation orders. New Section 33(2A) requires the Adjudicating Authority to pass the liquidation order within thirty days of the intimation or application, recording reasons for delay, and Section 54(1) requires liquidation and the dissolution application to be completed within 180 days, extendable by up to 90 days.
- Liquidation moratorium. Section 33(1)(b)(iv) now requires the liquidation order to declare a moratorium, subject to Section 52. The proviso permits the Central Government, in consultation with a financial sector regulator or other authority, to notify transactions to which that moratorium will not apply.
- Withdrawal limits. The substituted Section 12A bars withdrawal after the first invitation for resolution plans, closing off late settlements once bidding has begun.
- Appeals. Section 61(6) requires the NCLAT to dispose of appeals within three months.
Lessons for Stakeholders
- Timelines are outer limits, not guarantees. Essar Steel permits extensions in exceptional cases, but the Supreme Court has since cautioned against routine extensions, and the 2026 amendments add recorded-reasons requirements at each stage.
- Asset preservation drives outcomes. Where operations stop and assets leave the estate, resolution becomes less likely and liquidation more so.
- Sector-specific carve-outs matter. The Section 14(3)(a) notification for aircraft is the clearest example of the moratorium being tailored to a sector, and similar notifications may be issued for liquidation under the new proviso to Section 33(1)(b)(iv).
Frequently Asked Questions
1. What happened to Go First under the IBC?
Go First entered CIRP in May 2023 and was subsequently ordered into liquidation in January 2025 after the resolution process did not result in an acceptable plan.
2. How long did the Go First CIRP last?
The Go First CIRP lasted about twenty months, exceeding the standard 330-day timeline under Section 12 of the IBC.
3. How did the aircraft moratorium affect Go First?
The treatment of leased aircraft became a major issue because aircraft lessors sought deregistration and repossession while the company was under the IBC moratorium.
4. What changed for aircraft under the IBC moratorium?
A 2023 notification under Section 14(3)(a) excluded specified aircraft-related transactions under the Cape Town Convention and Aircraft Protocol from the moratorium.
5. Can a CIRP be restored instead of proceeding to liquidation?
Yes. The 2026 amendment introduced Section 33(1A), allowing the CoC, subject to the statutory conditions, to seek one-time restoration of the CIRP for up to 120 days before a liquidation order.
Legal Information Disclaimer
This article provides general information about Indian law as it stood on 16 September 2026. It is not legal advice, and reading it does not create an advocate–client relationship. Statutes, rules and judicial interpretations change, and their application depends on the facts of each matter. Readers should consult the current official text of the laws and judgments cited and should not act on this information without advice specific to their circumstances. This article is published for legal awareness and education and is not intended to advertise or solicit professional work.
Sources / Authorities
- Insolvency and Bankruptcy Code, 2016 — Sections 10, 12, 12A, 14, 33, 52, 54, 61 (as amended) — IBBI – Legal Framework
- Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) — Gazette text (IBBI); Notification S.O. 2625(E) dated 22 May 2026 — IBBI
- Central Government notification under Section 14(3)(a) dated 3 October 2023 relating to transactions under the Cape Town Convention and Protocol concerning aircraft, aircraft engines, airframes and helicopters — IBBI – Notifications
- Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, (2020) 8 SCC 531, Supreme Court of India, 15 November 2019
- Reports of the NCLT liquidation order dated 20 January 2025 in the Go Airlines (India) Ltd. proceedings — SCC Online Blog; Business Standard
