Application to terminate leases of Go First’s lessors not rejected: DGCA


The Directorate General of Civil Aviation (DGCA) told the Delhi High Court that it has not rejected the application of Go First’s lessors to terminate the leases of the aircraft in possession of the cash-strapped airline.


Advocate Anjana Gossain, appearing for DGCA, said that there was a glitch on the DGCA website which showed that the application by some lessors to terminate the leases of the aircraft were rejected. 


Gossain said that after the application of voluntary insolvency by Go First was accepted by the National Company Law Tribunal(NCLT), Delhi on May 10, all the lessors were informed that a moratorium was in place and their application to terminate the leases of the aircraft could not be processed. 


Justice Tara Vitasta Ganju of Delhi High Court asked the DGCA as to why different responses were sent to different lessors regarding the staus of the termination of leases. Justice Ganju has asked the aviation regulatory body to explain on June 1 whether the lessors were informed by the DGCA on the current status of their application of termination. 


The lessors of Go First had moved the high court against the DGCA, seeking to deregister their aircraft leased to Go First. This was shortly after the NCLAT upheld the NCLT order on May 22.


The petitions were filed by Pembroke Aircraft Leasing 11 Limited, Accipiter Investments Aircraft 2 Limited, EOS Aviation 12 (Ireland) Limited, DAE SY 22 13 Ireland Designated Activity Company, SFV Aircraft Holdings IRE 9 DAC LImited, ACG Aircraft Leasing Ireland Limited, and SMBC Aviation Capital Limited. All of them have been clubbed together for hearing.


The DGCA had told the high court earlier it had not rejected the application of Go First’s lessors for deregistering the aircraft but had kept the process (of deregistration) in abeyance because of the moratorium.


The lessors had told the NCLAT they had sought deregistering Go First’s aircraft before the insolvency plea was admitted. In reply to this, Go First argued the lessors had hastily applied for deregistration as soon as they got wind of the fact that the airline was filing for insolvency.


The lessors argued that, according to the Irrevocable De-registration and Export Request Authorisations (IDERA), it was mandatory for the DGCA to deregister the aircraft upon their request.


The high court will continue hearing the arguments in the case on June 1. 


The Interim Resolution Professional (IRP) of Go First had on Tuesday told the Delhi High Court that parallel proceedings could not go in the case and that the court could not interfere in the resolution process.


This was again reiterated by the IRP in the hearing on May 31. 


Senior advocate Harish Salve, appearing for the IRP, had told the court that a writ court (the high court in this case) should not interfere in the resolution process after the insolvency application had been accepted by the NCLT. 


He said there were many Supreme Court judgments that had said this.


“Courts should not interfere in the Insolvency and Bankruptcy Code (IBC) process because the essence of this process is that it is time-bound. Interests start piling up with every passing day on all dues,” Salve said.


He argued if the court were to release the aircraft in accordance with the lessors’ request, the airline would not be able to resume operations and thousands of employees would lose their jobs.


After the insolvency plea was accepted, a moratorium was in place, which meant suspending all or certain legal remedies against Go First. This meant lessors could not take back their aircraft in possession of the cash-strapped airline.


Salve told the high court that if the lessors wanted to appeal against the NCLAT decision, they should have gone to the Supreme Court. Moreover, if they wanted relief in terms of deregistration of their aircraft or other remedies (an application of malicious intent against Go First), they could have approached the NCLT as the NCLAT order had directed, he added.




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