The National Company Law Tribunal (NCLT) on June 5 sought response of cash-strapped Go First’s interim resolution professional (IRP) in applications by three lessors to exempt them from moratorium as they had terminated their leases prior to moratorium order. The cases will now be heard on June 15.
Aircraft lessor Jackson Square Aviation Ireland Limited urged the tribunal to pass an interim order directing the IRP not to use the aircraft till the disposal of the application.
Represented by senior advocate Arun Kathpalia, the aircraft lessor argued that that they had leased out eight aircraft to Go First out of which four are under repair for the last few years. They alleged that Go First has been defaulting in payments from 2021 and argued that they served a default notice on the airline in August 2022. According to the lessor, process of return of aircraft had started had prior to termination of leases, however they terminated them on May 3.
Aircraft lessor BOC aviation told the court that they had filed an application seeking an exemption from the insolvency process, as they had terminated leases before NCLT admitted the plea for insolvency.
Engine lessor Engine Lease Finance B.V while arguing that their application was for the return of engine, they wish to first inspect them in the meanwhile.
The IRP argued that the aircrafts are the core of Go First's business and the company cannot be run as a going concern if the aircrafts are taken away. The lawyers representing the IRP sought time to file their responses to the applications and requested the tribunal to list the case for hearing on some other day.
The tribunal, accordingly directed the IRP to file his response in all the three applications and adjourned the case for hearing to June 15.
The application has been filed pursuant to the National Company Law Appellate Tribunal's (NCLAT) May 22 order, which upheld Go First's insolvency and directed the lessors to file an appropriate application at the NCLT to ascertain the status of leases terminated prior to the airline being admitted to insolvency.
The appellate tribunal also granted liberty to the Interim Resolution Professional (IRP) to move an application at the NCLT with respect to the claims of both parties relating to the aircraft in question.
Lessors challenge order
The NCLAT had directed the NCLT to decide the applications of the lessors and IRP without being influenced by any observations made by it.
The aircraft lessors to Go First, such as SMBC aviation capital, SFV Aircraft Holdings and GY Aviation Lease, challenged the order of the NCLT admitting the cash-strapped airline's plea for insolvency. The lessors argued at the NCLAT that Go First is using the insolvency proceedings to hold on to aircraft that it does not own.
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 grounding half its fleet due to faulty engines.
The ultra-low-cost airline has liabilities worth around Rs 11,000 crore.
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