Go First case: NCLAT permits engine lessor to carry out inspection, modifies NCLT order

Go First NCLAT

The National Company Law Appellate Tribunal (NCLAT) on August 18 modified the order of  National Company Law Tribunal (NCLT) from July 26, to permit engine lessor Engine Lease Finance BV to carry out inspection of their four engines leased to the grounded airline Go First.

The Resolution Professional (RP) of the airline has been asked to communication the date of inspection in 10 days from today.

The appellate tribunal further noted that it does not approve the order of NCLT, which refused to permit the engine lessor from inspecting the engines they have leased out. The appellate tribunal also urged the NCLT to dispose off the applications by lessors soon considering the huge stakes involved in the case.

Appearing for the engine lessor, lawyer Anand Venkatramani argued that each of the engine that has been leased out to Go First is valued at $15 million and it is important they be permitted to inspect them. He told the court that the Resolution Professional (RP) of the airline had written to Go First in June 2023 intimating the lessor that they maybe permitted to inspect them, however the same was not acted upon.

Anandh also argued that while Delhi High Court has permitted inspections of the aircraft, the NCLT has not done so. According to the lessor, NCLT has passed orders on aspects that were not even pleaded in the application.

Appearing for the RP, senior advocate Ramji Srinivasan argued that the order of NCLT is only a prima facie view and not a final one. He informed the court that the NCLT is likely to commence its final hearing on the pleas by lessors on September 1 and urged NCLAT not to interfere in the case.

The NCLAT, however, noted that the engine lessor must be permitted to carry out inspection of the engines they have leased out.

The National Company Law Tribunal (NCLT) on July 26 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.

According to the tribunal's order "the DGCA has not
deregistered the aircraft, which means that they are available to Go First for use to resume operations. Therefore, as long as the aircrafts/engines are registered, they can be used for operating or flying to keep Go First as a going concern, however, within the safeguards/safety norms prescribed by the regulators."

The NCLT also dismissed the plea by lessors to inspect their aircraft and engine and held that they have in their previous order from June 15 already directed the Resolution Professional (RP) to maintain the same. The tribunal has granted relief to the lessors only to the extent of protection and maintenance of the aircraft/engines by the RP.