New Delhi: In a relief for Go First airline, the National Company Law Appellate Tribunal on Monday upheld the National Company Law Tribunal's order on the Wadia Group-backed airline's insolvency proceedings, thus keeping the moratorium in place for the airline's aircraft.

New Delhi: In a relief for Go First airline, the National Company Law Appellate Tribunal on Monday upheld the National Company Law Tribunal's order on the Wadia Group-backed airline's insolvency proceedings, thus keeping the moratorium in place for the airline's aircraft.

In the petition filed by one of the lessors SMBC Aviation Capital, the tribunal has asked the lessors to approach NCLT to further appeal the order dated 10 May.

In the petition filed by one of the lessors SMBC Aviation Capital, the tribunal has asked the lessors to approach NCLT to further appeal the order dated 10 May.

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In its petition before the appeals court, SMBC had alleged that the initiation of voluntary insolvency by Go First was, in fact, a ‘fraudulent exercise’.

Arun Kathpalia, senior counsel appearing for the lessor, had argued that it had terminated its lease with Go First before the moratorium and now wants to repossess the aircraft through insolvency. “Go First has no rights over the planes, which it does not own," he said.

On the other hand, Go First had stated that it has already invested ₹200 crore in the company just to keep it as a going concern. Therefore, the allegations of mala fide on the part of the company’s erstwhile management were baseless, it had said.

Go Airlines, which rebranded itself as Go First in May 2021, voluntarily filed for insolvency on 2 May, citing persistent engine issues in its fleet resulting in grounding of 30-50% of its total aircraft count since 2020. While the petition of the airline for insolvency was admitted on 10 May, the airline's lessors had approached the civil aviation regulator Directorate General of Civil Aviation 4 May onwards to de-register over 40 aircraft out of the airline's fleet size of 54 aircraft.

The admission of the airline's petition on 10 May froze the aircraft assets of the Ireland-based lessors and one of the lessors SMBC Aviation approached NCLAT against the NCLT order, seeking the moratorium to be lifted from the aircraft so that these can be de-registered. Lessors had plans to either give these aircraft on lease to other airlines currently operating in India or to export them from India.

The NCLT order also prohibited initiating suits or continuation of pending suits or proceedings against the airline, including the execution of any judgment, decree, or order in any court of law, tribunal, arbitration panel, or other authority. The airline has continued to suspend flights since 3 May.

Currently, Go First owes more than ₹10,000 crore to its financial and operational creditors.