NCLAT halts Deccan Charters' insolvency till April 26

The National Company Law Appellate Tribunal (NCLAT) announced the suspension of insolvency proceedings against Deccan Charters, owned by Captain GR Gopinath, until April 26, 2024, the date of its next hearing. Previously, the Bengaluru bench of the National Company Law Tribunal (NCLT) had instructed the commencement of Corporate Insolvency Resolution Process (CIRP) based on a petition from financial creditor Krone Finstock, alleging a default of approximately Rs 100 million. The Chennai bench of NCLAT, responding to a petition from Sanjay Saihgal, a director of Deccan Charters' suspended board, directed Krone Finstock to submit a response within four days. A three-member bench of the appellate tribunal also instructed the interim resolution professional (IRP) not to take further action until the next hearing on April 26, 2024. Deccan Charters offers services including aircraft maintenance, aviation training, and charter services for helicopters and fixed-wing aircraft. NCLT had previously appointed an IRP for the company, a decision that was contested before NCLAT. During the proceedings, it was revealed to NCLAT that the IRP had issued a public announcement on April 8, 2024, regarding the CIRP, with bids due by April 19, 2024. GR Gopinath, along with other directors, had sought a loan of Rs 50 million from Krone Finstock. A loan agreement was consequently executed between the creditor and the company. Deccan Charters had made partial repayment, which was applied towards accrued interest. However, it subsequently failed to fulfill the remaining payment obligations as per the agreement. Consequently, financial creditor Krone Finstock petitioned NCLT, leading to the directive for CIRP initiation on April 5, 2024.