The National Company Law Appellate Tribunal (NCLAT) on May 15 reserved judgement on plea by aircraft lessors challenging the order of National Company Law Tribunal (NCLT) admitting Go First's plea for voluntary insolvency.
The tribunal will now pronounce orders in lessors appeal on May 22.
Meanwhile, the debt-laden airline's interim resolution professional (IRP) in hearing today alleged that the lessors issued a letter of termination after Go First announced their plans to initiate insolvency. The letter was issued to defeat the purpose of IBC.
The IRP further argued that airline's fortunes will change if engine maker Pratt and Whitney supplies them 10 engines a month as mandated by Singapore arbitral tribunal. Questioning the intentions of the lessors for objecting to the company's plans for voluntary insolvency, the RP argued that the lessors had not terminated the leases when the dues to them increased, however they terminated the leases immediately after the airline announced plans for insolvency.
Responding to the allegations by the IRP, lessors argued that Go First created a sense of false urgency by suddenly halting its operations and approaching the NCLT for insolvency, even when the aircrafts were flying. Saying thus, the lessors questioned the rationale behind Go First's sudden plans to file a plea for voluntary insolvency.
SMBC aviation capital further argued that Go First wants to fly away with their assets, which is impermissible under law.
Aircraft lessors, including SMBC aviation capital have challenged the order of NCLT, admitting the airline's plea for insolvency.
On May 12, the lessors argued that that the cash-strapped airline is using the insolvency proceedings to hold on to aircraft that it does not own.
SMBC called into question the rationale behind the Go First filing for voluntary insolvency despite having 26 functional aircraft and taking bookings for future dates.
SMBC Aviation claimed that it has unpaid dues of Rs 700-800 crore from Go First. SMBC further argued that the National Company Law Tribunal (NCLT) did not provide them with an opportunity to present their side of the case and admitted Go First's plea for insolvency without ascertaining the entire situation.
GV Aviation argued that Go First is trying to create rights for itself in relation to the aircraft using the insolvency proceedings and diffuse rights of aircraft lessors.
SFV Aircraft Holdings argued that the Director General of Civil Aviation (DGCA) has told the lessors that the aircraft cannot be deregistered owing to the moratorium.
On May 10, the principal bench of NCLT at Delhi admitted Go First's voluntary plea to initiate an insolvency resolution process.
The tribunal appointed an IRP while suspending the board and putting a moratorium on the debt-ridden airline's financial obligations.
Founded by billionaire Nusli Wadia, Go First, earlier GoAir, filed for bankruptcy on May 2, blaming US engine maker Pratt & Whitney for the grounding of half of its fleet.
The ultra-low-cost airline has liabilities worth around Rs 11,000 crore.
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