Go First case: Third aircraft lessor moves NCLAT against resolution professional

Third Go First moves NCLAT against Go First RP

New Delhi: Bluesky 19 Leasing Company Ltd, aircraft lessors to Go First, has moved to the National Company Law Appellate Tribunal (NCLAT) after an aircraft and an engine lessor secured favourable orders allowing them to inspect their assets.

The case has been filed against the GO First Resolution Professional (RP) Shailendra Ajmera and is scheduled for a hearing on October 5th.

This series of aircraft lessors turning to NCLAT began with Engine Lease Finance BV, an engine lessor, filing a plea to secure the right to inspect the aircraft.

On August 18th, NCLAT granted the engine lessor the permission to carry out inspections and modified the National Company Law Tribunal’s (NCLT) order from July 26th, which had initially allowed Go First to operate the leased aircraft. In its directive, NCLAT disagreed with the part of the NCLT’s order that had restricted the lessor from inspecting the assets.

Subsequently, aircraft lessor Jackson Square Aviation also approached NCLAT with a similar plea to secure the right to inspection. On August 31st, NCLAT disposed of the plea and allowed the lessor to carry out inspections based on the same order that had been passed in the case of the engine lessor.

Such orders by NCLAT favouring the lessor is set to create hurdles in the resumption of operations Go First, which has been grounded since May.

Both the engine and aircraft lessors of Go First are simultaneously engaged in legal battles in both the NCLT and the Delhi High Court against GO First. In NCLT, the lessors are seeking the court’s intervention to regain possession of the aircraft, while in the Delhi High Court, they are seeking to deregister their aircraft with the Directorate General of Civil Aviation (DGCA). The lessors have argued in court that the RP is not properly maintaining the aircraft, and during inspections, their aircraft were found to be in poor condition.

The Delhi High Court is expected to issue an order in the coming week on a separate plea filed by three other lessors, namely BOC Aviation (Ireland) Ltd, ACG Aircraft Leasing Ireland, and DAE 13 Ireland Designated Activity. These lessors sought the Delhi High Court to issue additional directives regarding the inspection of their aircraft. The RP has argued against the maintainability of the plea, asserting that it has already been settled in previous orders in the case.

According to the RP, the single bench should refrain from issuing directives because, under the “doctrine of merger,” its July 5th order has already merged with the division bench’s order from July 12th, which was subsequently upheld and modified by the Supreme Court. Therefore, only a higher authority, such as the division bench, can address these pleas.

In an interim order passed in July, a single-judge bench of the court had permitted the lessors to inspect the grounded planes. The order was later upheld by a division bench of the High Court and subsequently by the Supreme Court.

Go First has filed for insolvency due to financial difficulties linked to Pratt and Whitney’s faulty engines. The National Company Law Tribunal had accepted its plea on 10 May leading to the suspension of the airline’s board.