HC allows Go First lessors to inspect aircraft

A bench led by Justice Tara Vitasta Ganju has authorised the lessors to conduct maintenance tasks on the engines and components of all aircraft twice a month until the disposal of the writ petitions.

The high court also prohibited Go First and its agents from removing any components or operational and manual documents from any of the 30 aircraft. However, the airline’s representatives can do so with prior permission from the lessors.

On Wednesday, the high court was hearing a batch of petitions filed by the lessors of the debt-laden airline, which sought the court’s intervention to direct the DGCA to deregister the aircraft leased to Go First.

During the court hearing, the petitioner’s (Lessors) lawyer informed the court that Go First had already approached the DGCA with a revival plan for their aircraft. Concerns were raised about the DGCA considering the proposal without consulting the lessors, they added.

The court will take up the matter for further hearing on 3 August.

In May, Go First approached the Delhi National Company Law Tribunal (NCLT) to initiate voluntary insolvency under the Insolvency and Bankruptcy Code (IBC).

Go First stated that due to faulty engines supplied by American company Pratt & Whitney (P&W), the grounding of its aircraft increased from 31% in 2020 to over 50% in April 2023, resulting in a loss of more than ₹10,800 crore.

On 10 May, the NCLT Delhi admitted the plea and declared a moratorium for the company. The suspended board of directors were directed to cooperate with the Insolvency Resolution Professional (IRP) to avoid layoffs. The decision of the NCLT was subsequently upheld by the National Company Law Appellate Tribunal (NCLAT) on 22 May.

In response, several lessors, including Pembroke Aircraft Leasing 11, SMBC Aviation Capital, Accipiter Investments Aircraft 2, Eos Aviation 12 (Ireland), DAE SY 13 Ireland, SFV Aircraft Holdings Ire 9 DAC Limited, ACG Aircraft Leasing Ireland Ltd, and GY Aviation Lease 1722 Co. Ltd had approached the high court to deregister the leased aircraft.

The lessors argued that they had already terminated their lease agreement with the airline before it applied for insolvency. The lessors claimed that the termination had been initiated due to multiple defaults by Go First.

Meanwhile, NCLT in June instructed the newly appointed Shailendra Ajmera as the resolution professional (RP) so as to ensure the maintenance of engines leased from SMBC Afro Engine Lease BV and Engine Lease Finance BV.

The engine lessors sought NCLT’s direction to safeguard their assets. Ajmera was unanimously chosen as the resolution professional by the committee of creditors during their first meeting on 9 June. The tribunal also instructed the resolution professional to file responses to pleas by the lessors and scheduled hearings for 6 July.

Updated: 06 Jul 2023, 12:03 AM IST