Go First case: Lessor files contempt in HC, alleges wilful non-compliance of orders

Contempt filed against Go First RP in Delhi HC

DAE (SY22) 13 Ireland Designated Activity Company, an aircraft lessor to the grounded airline Go First, has filed a contempt petition in the Delhi High Court, alleging that the carrier's resolution professional (RP) had wilfully refused to comply with the court's orders.

"The RP's wilful refusal to grant the petitioner access to its own aircraft records / documents is in clear and deliberate violation of the judgment dated October 12," the plea reviewed by Moneycontrol states.

The plea, filed by lawyers Bhavna Duhoon and Amit Pai alleges that the RP is in deliberate breach of the order and is delaying / denying access to many aircraft records owing to which the true status of preservation of the aircraft is unknown to the lessor.

The lessor, who has leased two aircraft to Go First, has also contended that there is an apprehension that the components of the aircraft have been "cannibalised". The lessor has also contended that the RP has not permitted them to inspect the aircraft from September.

DAE (SY22) 13 Ireland Designated Activity Company, has thus asked the court to pass an order holding the RP guilty of contempt and "be held to be deemed to have committed contempt, and be directed to undergo civil imprisonment and pay a fine".

Delhi High Court litigation

The lessors moved a plea in the Delhi HC against the DGCA, requesting the court to direct the authority to deregister their aircraft. They argued that the authority should deregister the aircraft if demanded by lessors.

On July 5, the high court, in an interim order, permitted the lessors to inspect and perform the maintenance work. However, a division bench of the Delhi High Court on July 12 modified the order to the extent that the lessors could only inspect the aircraft while the insolvency resolution professional (RP) appointed under the IBC could carry out maintenance. The Supreme Court upheld the order of the Delhi High Court.

As the case progressed, the lessors accused the RP of not maintaining the aircraft and told the court that their assets were at the risk of being rendered useless. DAE (SY 22) 13 Ireland alleged that the condition of the aircraft was deteriorating every time it inspected the planes.

DAE, which has leased two aircraft, alleged in its plea that the RP was not giving it access to documents such as maintenance records, which were essential to determine if the planes were being maintained in an airworthy condition.

On October 12, the Delhi High Court permitted the lessors of the grounded airline to engage security personnel to monitor their aircraft, engine and other parts. “A review of the documents and photographs filed by the Petitioners/Lessors show the evident cannibalisation of the Aircraft,” the high court order said.

The NCLT litigation

On May 2, Go First filed a plea in the NCLT under Section 10, asking to be admitted to the Corporate Insolvency Resolution Process (CIRP) voluntarily. On May 10, the NCLT admitted the insolvency plea, and appointed a resolution professional to run the affairs of the company.