Lessors left stranded as NCLT defers Go First insolvency hearing to July 11

Engine lessors have been left stranded as the National Company Law Tribunal on Monday deferred its hearing in Go First’s insolvency case to July 11.

The National Company Law Tribunal indicated that it needed more time to study the Delhi High Court’s order that told the Directorate General of Civil Aviation (DGCA) to deregister all its 54 aircraft by May 3, 2024.

Engine lessors urged the National Company Law Tribunal that their engines are connected to some of the deregistered aircraft and if these aircraft are required to leave the country after deregistration, their engines must also be deregistered.

They also told the National Company Law Tribunal that Go First’s Resolution Professional had no jurisdiction left now that the Directorate General of Civil Aviation has deregistered all the 54 aircraft as per the Delhi High Court, and the Resolution Professional has not challenged this.

Business Standard had earlier reported that Go First will not challenge the Delhi High Court order and is heading towards liquidation.

Lenders told the newspaper the only option that remained was liquidation. They said they would lose money when the airline was liquidated since the value of its assets had gone down due to prolonged litigation.

Go First had filed for bankruptcy in May last year. Since then, the lessors have been locked in a battle with the former owner of the airline, lenders, and the resolution professional to take control of their aircraft.

The Delhi High Court, on April 26, directed the Directorate General of Civil Aviation to deregister planes leased to Go First within five working days, providing much-needed relief to the lessors. With the civil aviation regulator complying with the court order and deregistering the planes, the lessors have now claimed their aircraft.

At an aviation event in February this year, global aircraft and engine lessors expressed deep frustration, using terms such as “scarred”, “burnt”, “egregious”, and the “yellow light of caution”, over their inability to repossess their planes (and engines) from Go First due to ongoing court cases.

Go First had sought the third extension from the National Company Law Tribunal for completing its insolvency process. For this, it was granted 60 days on April 8. The National Company Law Tribunal had on November 23, 2023, extended the insolvency process of the grounded airline by 90 days.

The extension had come as a relief for Go First, which has been embroiled in a legal battle over the control of its aircraft with its lessors since May last year. However, the Ministry of Corporate Affairs issued a notification on October 3 last year, exempting arrangements relating to aircraft, aircraft engines, airframes, and helicopters from the moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016.

First Published: May 13 2024 | 9:26 PM IST