Delhivery Moves NCLT Against Go First For Accepting INR 1.5 Cr Despite Heading Towards Insolvency

Logistics giant Delhivery has reportedly moved the National Company Law Tribunal (NCLT) against Go First, alleging that the beleaguered airline deliberately took payments from it despite heading towards insolvency.

The matter was heard by a tribunal bench on June 8 and directed the Go First’s Interim Resolution Professional (IRP) to file a response to Delhivery’s submission. It also listed the matter for hearing on July 24. 

In its plea before the tribunal, the logistics major said that the airline failed to honour its commitment to render domestic cargo consignment services despite receiving payments worth INR 1.58 Cr. The payments pertained to an agreement signed between the two parties in 2020, which was last renewed in August 2022.

According to the petition, Go First took payments from Delhivery despite being aware of its future course of action to file for insolvency. Delhivery alleged that the airline was well aware of its financial position, by April 28, when it prepared a statement of accounts that was to be presented before the NCLT. 

Delhivery also claimed that the airline received board’s approval on April 30 to file the plea for voluntary insolvency. The logistics player further alleged that Go First received INR 57 Lakh in payments from Delhivery on May 2, despite being aware of its future course of action.

As per Delhivery’s petition reviewed by Moneycontrol, the tranche of money was transferred on the same (May 2) as Go First filed for insolvency. The petition added that the airline received the money in a fraudulent and malafide manner. 

The Gurugram-based company further claimed that the airline received the money despite knowing that it may not be able to render the services even in the future as Go First does not have an operable fleet by its own admission.

“The sole intent of Go First in preferring the insolvency petition is to hijack the process in detriment of Delhivery’s bonafide, the plea is an abuse of process of law,” the petition read.

Delhivery has now reached out to the tribunal to seek the refund and has sought directions to the airline to pay a penalty. The plea further alleged that the insolvency petition was a brazen attempt to subvert the law using legal process and that it was filed ‘solely to thwart its creditors from taking any other legal recourse to recover money due to them’.

With this, Delhivery joins a growing list of aggrieved parties that have sought NCLT’s intervention, seeking exemption from moratorium to recover their dues. 

After filing for insolvency on May 2, Delhivery’s petition was admitted by the principal bench of NCLT at Delhi on May 10. The Nusli Wadia-founded airline declared bankruptcy, citing grounding of half its fleet due to faulty engines supplied by US engine maker Pratt & Whitney.

In total, the airline has liabilities to the tune of around INR 11,000 Cr. 

While the case pans out in the tribunal, the matter could somewhat pile up additional liabilities for Delhivery, which is already saddled with heavy losses. The logistics major reported losses worth INR 1,007.7 Cr in FY23, narrowing marginally from INR 1,011 Cr in FY22. 

The development also weighed heavily on the Gurugram-based logistics player as the stock tanked nearly 1% to INR 354.55 on the BSE on Thursday (June 8).