New Delhi: In a setback for Go First insolvency proceedings, the airline’s lessors today in the Delhi High Court demanded the de-registration of their aircraft following the latest changes made in the Insolvency and Bankruptcy Code by the Ministry of Corporate Affairs.
The legal counsel appearing for the lessors stated their urgent need for the deregistration of their aircraft before the Delhi High Court today. They also requested the court to direct the Indian civil aviation regulator, Directorate General of Civil Aviation (DGCA), to provide an affidavit clarifying their stance on the notification.
In response, the Resolution Professional (RP) asked for time to thoroughly examine the notification and consult with the Committee of Creditors (CoC). The court granted this request, providing both the RP and DGCA with the opportunity to clarify their positions. The hearing has been deferred and the matter will be revisited on the 19 October.
On Wednesday, the Ministry of Corporate Affairs announced specific exemptions from the Insolvency and Bankruptcy Code (IBC) for aircraft, engines, and related parts. Notably, Section 14(1) of the IBC, which enforces a moratorium on insolvency proceedings, would no longer apply to transactions, arrangements, or agreements concerning aircraft, aircraft engines, airframes, and helicopters.
The lessors are anticipated to leverage this amendment in tribunals and courts to repossess their assets from the airline. However, potential delays could arise due to changes in the composition of the National Company Law Tribunal (NCLT) bench handling the matter.
Additionally, the single bench of the high court has reserved its judgment in the maintenance case initiated by three lessors. A ruling on this matter is expected in the coming week.
On the same day, the National Company Law Appellate Tribunal (NCLAT) granted Bluesky 19 Leasing Company Ltd, a lessor of Go First, the right to inspect its aircraft. This development marks the third lessor to secure this inspection right.
Go First filed for insolvency due to financial challenges stemming from problematic Pratt & Whitney engines, and the NCLT approved its plea on the 10th of May, leading to the suspension of the airline’s board.
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Updated: 05 Oct 2023, 04:57 PM IST
