Go First Case: Delhi HC orders status quo with respect to SMBC aviation's aircrafts

Go First Delhi HC

Justice Tara Vitasta Ganju of Delhi High Court on July 28, ordered status quo with respect aircrafts leased to grounded airline Go First by lessor SMBC Aviation Capital.

The status quo is with respect to handling and carrying out non-revenue activities on the aircraft.

The order was passed in an application filed by SMBC alleging that Go First violated the previous order of Delhi High Court as it had 'handled' the aircraft against explicit directions of the court. Appearing for SMBC, senior advocate Rajiv Nayyar sought for an order of status quo. He argued that the airline conducted test flights with

Appearing for Go First's Resolution Professional (RP) senior advocate Ramju Srinivasan argued that the airline was merely carrying maintenance work to check the airworthiness and not operate them. Srinivasan also sought for time to file a response to SMBC's application.

However, the court sought for more clarification on how 'handling' could be considered. The high court while permitting the RP to file a response, noted that SMBC had made a case for ordering a status quo and thus passed the order.

On July 26, the National Company Law Tribunal (NCLT) refused to restrain Go First from using leased aircraft for its operations, noting that those aircraft are essential to keep Go First as a going concern company. However, this order as passed in respect to seven lessors who had not moved the Delhi High Court.

On July 12, a two judge bench of the Delhi High Court refused to entertain an appeal by Go First's Resolution Professional (RP) challenging a previous order that had allowed lessors to conduct inspections of 30 aircraft and their parts at regular intervals. The court upheld the decision, granting permission to the lessors to carry out inspections regularly.

The court, however, permitted Go First to continue maintaining the aircraft.

 On July 5, a single-judge bench of the Delhi High Court granted permission to the lessors to inspect and perform maintenance work on their 30 leased aircraft and their parts twice a month. The order also prohibited Go First's resolution professionals and employees from removing, replacing, or taking out any part or component of the leased aircraft without the explicit permission of the lessors.

Order upheld

The aircraft lessors, including Pembroke Aviation, Accipiter Investments Aircraft 2 Ltd, EOS Aviation and SMBC Aviation, filed a writ with the Delhi High Court seeking instructions to release the planes leased to Go First, which is currently facing financial distress.

On May 22, the National Company Law Appellate Tribunal (NCLAT) upheld the National Company Law Tribunal's (NCLT) order to admit Go First's plea for insolvency.

On May 10, the principal bench of the NCLT in Delhi accepted Go First's voluntary plea to initiate an insolvency resolution process. As a result, the tribunal appointed an Insolvency Resolution Professional (IRP), suspended the board and imposed a moratorium on the airline's financial obligations.