Termination of leases a culmination of defaults committed by Go First, lessors tell Delhi HC

On July 12, the court allowed lessors to conduct inspections of 30 Go First aircraft and their parts at regular intervals.

Dismissing Go First's claim that the aircraft lessors terminated the leases after it announced voluntary insolvency, the lessors of the grounded airline told the Delhi High Court on August 4 that the leases were terminated since the airline had defaulted in paying their dues.

Lawyers appearing for the lessors took the court through various correspondence between the airline and them to substantiate their claim. Lessors further argued that as per international conventions, the Director General of Civil Aviation (DGCA) had to deregister the aircraft by default when a lessor requests them to do so.

According to the lessors, the airline has no role to play in the process of deregistration as it is between DGCA and them. The lessors emphasised again that deregistration is an administrative action outside the jurisdiction of the Insolvency and Bankruptcy Code, 2016 and the Delhi HC has the powers to hear the case. Lessors argued that the National Company Law Tribunal (NCLT) cannot revalidate the leases that have already been terminated.

Arguments were made on behalf of the lessors by senior advocates Rajiv Nayyar and Amit Sibal. Hearing of the case is likely to continue on August 7, when lessors are expected to finish arguing their side of the case.

On August 3, it was argued 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). The Resolution Professional (RP) 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.

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.