The Delhi high court on Wednesday allowed leasing companies to access aircraft leased to Go First for “inspections of their fleet and carry out engine and other maintenance work as required”.
In an interim order passed by justice Tara Vista Ganju, the court directed aviation regulator Directorate General of Civil Aviation (DGCA) and relevant airport authorities to allow the lessors to carry out inspection and all the interim maintenance tasks of all 30 aircraft within three days from today for at least twice a month.
“The petitioners shall be permitted to carry out inspection and all the interim maintenance tasks of the aircraft, its engines of all 30 aircraft at least twice a month, until final disposal of the writ petitions,” the court said while pronouncing the judgment.
The lessors of Go First have sought deregistration of their planes DGCA so they could take them back from the airline. The crisis-hit aircraft was granted bankruptcy on May 10.
The court also restrained Go Air and the resolution professional appointed by the National Company Law Tribunal (NCLT) from moving, removing, or replacing any part of the aircraft without prior permission from the lessors.
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“Respondent Go Air officers, directors, employees representatives or agents or the resolution professional or its representatives are hereby restrained from moving, replacing, taking out any part, components or spares etc or any other relevant operational documents or manual from the aircraft, except for the prior approval of the lessor of that aircraft,” the court order further said.
The court noted that there can be no denying that the aircraft of the lessors are extremely valuable and highly sophisticated and required regular maintenance.
On June 1, justice Tara Vista Ganju had reserved her order after hearing all parties, including the aircraft lessors, National Company Law Tribunal (NCLT)-appointed Interim Resolution Professional (IRP) and the DGCA, stating that she would first decide on the interim applications.
Lawyers for the lessors said they approached DGCA for deregistration of their aircraft but it rejected their pleas, according to the status of their applications posted on the regulator’s website.
The lessors who are in high court include Accipiter Investments Aircraft 2 Limited, EOS Aviation 12 (Ireland) Limited, Pembroke Aircraft Leasing 11 Limited, SMBC Aviation Capital Limited, GY Aviation Lease 1722 co Limited, DAE SY 22 13 Ireland Designated Activity Company, SFV Aircraft Holdings IRE 9 DAC Limited and ACG Aircraft Leasing Ireland Limited.
The DGCA, on other hand, told the court that the applications of several aircraft lessors of Go First show “rejected” due a technical glitch on the portal, adding that the pleas are not being processed due to the moratorium imposed on the airline.
Advocate Anjana Gosain, representing DGCA, said when lessors send deregistration requests to the regulator, it is done within five working days. In this case, no application has been rejected, she said, adding that when the DGCA received the moratorium communication, it conveyed to the lessors that their applications were not being processed because of the very reason.
Opposing the petitions, the IRP, appointed for managing the crisis-hit Go First, told the high court that the return of aircraft to the lessors will render the airline “dead”.
Stating that they have over 7,000 employees, senior advocate Harish Salve for the IRP contended, “My client has to take charge of all this, they will have priority. Ultimately it’s a question of money. These are all leased aircraft. Those issues have to be worked out.”
It is not that the airline has grabbed somebody’s property illegally when somebody wants to walk out, the senior counsel argued.
Hit by faulty operations of Pratt & Whitney engines in its flights, Go First Airlines filed a petition for voluntary insolvency resolution proceedings on May 2. The airline cited non-delivery of Pratt & Whitney engines, which affected the company’s flight operations to a large extent. The company stopped its flight operation on May 3. The insolvency plea of the Go First airline was admitted by the NCLT on May 10.
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In its petition filed with the NCLT, the airline said it initiated emergency arbitration proceedings against P&W which is pending since April 2020, adding that the company has paid ₹19,980 crore to its creditors, out of which ₹5,400 crore was paid to the lessors in the last two years towards lease rent and maintenance reserve despite 40% to 50% of the fleet being unable to fly. It has now exhausted all financial resources (including full utilisation), the company said.
It was pointed out that as on 28 April 2023, the company defaulted on payment of ₹1,202 crore to its creditors and ₹2,660 crore to airport lessors.
On May 10, NCLT admitted the airline’s voluntary insolvency resolution petition. With a moratorium in force on financial obligations and transfer of assets of Go First in the wake of insolvency resolution proceedings, the lessors are unable to deregister and take back the aircraft leased to the carrier.
NCLT allowed the voluntary insolvency resolution plea of Go First on May 10, and on May 22, the tribunal upheld the order of NCLT’s Delhi-based principal bench. Several lessors approached the aviation regulator for deregistration and repossession of 45 planes they had leased to the carrier earlier this month. Go First stopped flying from May 3, and has now suspended flights till at least July 10.
