# In the matter of Go Airlines (India) Ltd. Vs. Sovika Aviation Services Pvt. Ltd. Company Appeal(AT) (Ins) No. 1118 of 2019

> NCLAT judgment dated 2022-02-10. Citation: TCN-2022-NCLAT-00634. Go Airlines (India) Ltd. filed an appeal under Section 61 of the Insolvency and Bankruptcy…

- **Court:** NCLAT
- **Order date:** 10 Feb 2022
- **Citation:** TCN-2022-NCLAT-00634
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/go-airlines-india-ltd-vs-sovika-aviation-services-pvt-ltd-company-appeal-63dff426

## Summary

### Background

Go Airlines (India) Ltd. filed an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, against an order dated 26.08.2019 by the Adjudicating Authority (National Company Law Tribunal, Mumbai bench) in CP (IB) No. 44(MB)/2018. The Adjudicating Authority had dismissed the petition filed by Go Airlines under Section 9 of the Code for initiating Corporate Insolvency Resolution Process (CIRP) against Sovika Aviation Services Pvt. Ltd. The appellant sought to set aside the order and admit the petition for CIRP initiation.

## Facts

Go Airlines (India) Ltd. (Appellant) filed an appeal against Sovika Aviation Services Pvt. Ltd. (Respondent) after the Adjudicating Authority dismissed Go Airlines' petition to initiate CIRP against Sovika. The dispute arose from a 'Cargo Agreement' dated 09th July, 2016, where Go Airlines agreed to provide cargo belly space to Sovika. As per the agreement, Sovika was required to pay a signing amount, fortnightly charges, cargo sales earnings, reimbursement for expenses, and a lump sum for cargo security services. Sovika was also required to provide an irrevocable and unconditional bank guarantee. Go Airlines raised numerous invoices to Sovika. Sovika started raising debit notes, which Go Airlines refuted. Go Airlines served a notice of termination of the agreement due

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in dismissing the petition filed by Go Airlines …

**Ratio:** The Insolvency and Bankruptcy Code, 2016, is not intended to be used as a recovery

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**Reasoning:** The Adjudicating Authority found that the liability in question was not a clean and clear

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**Interpretation:** Section 9 of the Insolvency and Bankruptcy Code, 2016, requires that there

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**Application:** In this case, the Adjudicating Authority found that there was a pre-existing

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## Parties

- **Judges:** Ashok Bh…; Jarat Kuma…; +1 more
- **Appellants:** Go Airlines…
- **Respondents:** Sovika Aviation…

## Timeline

- **2016-07-09 — Cargo Agr…**: Go Airlines and Sovika Aviation Services entered into a 'Cargo Agreement' where Go…
- **2017-06-22 — Debit Notes R…**: Debit notes submitted by Respondent from 15th June to 19th June, 2017 amounting to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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