NCLT rejects appeals against GoAir using leased aircraft

The National Company Law Tribunal (NCLT), on Wednesday, rejected the request of six lessors to stop Go First from using their leased planes for its operations, highlighting the “ulterior objective” behind deregistration while lessors “were aware” that the airline has filed for bankruptcy.

Earlier, lessors including Bluesky 31 Leasing Co, Jackson Square Aviation Ireland Ltd, SMBC Aviation, BOC Aviation Ltd and Engine Leasing Finance Ltd had asked the bankruptcy court to stop Go First from operating the aircraft that they had leased for commercial purposes as the lease agreements have already been terminated.

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According to the tribunal's order, "The DGCA has not deregistered the aircraft, which means that they are available to Go First for use to resume operations. Therefore, as long as the aircraft/engines are registered, they can be used for operating or flying to keep Go First as a going concern."

“It is strongly indicative of the fact that the objective behind issuance of the Termination Notice, termination of the Lease Agreements and filing of the present Application was to evade the rigors of moratorium as envisaged under Section 14 of the IBC,” the order further read.

The NCLT also dismissed the plea by lessors to inspect their aircraft and engine, citing its previous order issued on June 15, where it had already instructed the resolution professional (RP) to oversee the maintenance of the aircraft and engine.

Allowing inspection of the aircraft would only act as an impediment to the effective discharge of the resolution professional's duties, NCLT said in the order and upheld its decision to permit Go First to continue operating the leased aircraft.

The tribunal has, however, provided some relief to the lessors by granting them protection and ensuring that the RP takes responsibility for maintaining the aircraft and engines during the resolution process.

On August 4, the tribunal will hear applications by the lessor to exempt them from the moratorium as they had terminated lease agreements beforehand. The Delhi High Court, on August 3, will hear applications by lessors against DGCA to deregister their aircraft.

This is a positive step in the revival of the embattled carrier, which had filed for voluntary insolvency resolution proceedings on May 2.