Go First case: ‘No one will lease aircraft to an Indian airline if this continues’, lessors tell Delhi HC

The lessors emphasised that writ court has jurisdiction in such matters as deregistration of an aircraft is an administrative act.

Lessors of grounded airline Go First told the Delhi High Court on August 3 that no lessors will lease their aircraft to an Indian airline if their deregistration request is not processed by the Director General of Civil Aviation (DGCA).

Senior Advocate Mukul Rohatgi, who appeared for one of the lessors argued that since most of the lessors are from abroad, their aircraft being held up against their will does not reflect well on the Indian aviation sector.

Rohatgi argued that according to conventions, the DGCA is duty-bound to deregister a leased aircraft once they are informed of the termination of a lease.

Lawyers for the lessors argued about Irrevocable De-Registration and Export Request Authorization (IDERA) a convention that allows lessors to get their aircraft deregistered, repossess and repatriate in cases an airline fails to make payments.

According to the lessors, the DGCA must adhere to the IDERA convention irrespective of whether a company is in a moratorium or not.  They argued that international conventions take precedence over a nation's law, especially under such circumstances.

The lessors emphasised that the writ court has jurisdiction in such matters as the deregistration of an aircraft is an administrative act. They furthermore told the court that they were only asking for orders to deregister their aircraft and nothing more, even though they eventually plan on taking the aircraft to their home countries.

Earlier during the hearing, senior advocate Ramji Srinivasa, who appeared for the resolution profession of the airline, informed the court that they have filed an appeal in the Supreme Court against the Delhi High Court division bench's order, which upheld the single judge's order allowing the airline's lessors the inspect their aircraft.

The arguments were made in a case filed by the lessors of the airline seeking directions against DGCA to deregister their aircraft.

On July 12, the court allowed lessors to conduct inspections of 30 aircraft and their parts at regular intervals. The court upheld the decision of the single judge 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.

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.