Go First Insolvency: NCLT Requests That RP File Information Regarding Recent Developments

The National Company Law Tribunal (NCLT) gave the resolution expert of cash-strapped grounded airlines instructions on Friday. Go ahead and provide information on any ensuing developments first.

Mahendra Khandelwal and Rahul P Bhatnagar made up the two-person NCLT bench that ordered the resolution professional (RP) to produce a supplementary affidavit within the next 10 days that details the condition of the leased aircraft’s upkeep.

The insolvency tribunal has also instructed the RP to submit a response to the three new Go First lessors’ arguments in two weeks and, if necessary, a rebuttal in the following week. The subject is to be listed for the next hearing on September 1.

 

The three new lessors are Accipiter Investments Aircraft 2 Ltd., EOS Aviation 12 Ireland, and DAE (SY 22) 13 Ireland. The petitions submitted by the other six lessors have all been pleaded.

 

Senior Advocate Ramji Srinivasan, speaking on behalf of the RP, told the tribunal during the proceedings that Go First had petitioned the Supreme Court in opposition to the Delhi High Court’s rulings.

 

The Delhi High Court’s single-member bench had previously given Go First’s lessors access to and inspection rights over the aircraft they had leased to the airline. Go First then went to the Supreme Court when the Division Bench of the High Court supported this as well.

 

According to Srinivasan, Go First has petitioned the Supreme Court for clarification on the directives issued by the high court and NCLT about the status of around 30 airplanes and their engines.

 

Earlier on July 26, the NCLT rejected requests by Go First’s lessors to stop the airline from operating commercial flights, stating that as the DGCA has not deregistered the company, aircraft are ready for flight resumption.

 

The NCLT ruled that Go First would “indisputably” have physical custody of the aircraft and engines and that lessors could not claim ownership during the carrier’s CIRP.

 

The tribunal also rejected the lessors’ requests for inspections of the leased airplanes and engines and reaffirmed emphatically that it was the resolution professional’s duty to keep them operating at the greatest possible levels of efficiency and safety.

 

“The corporate debtor (Go First) has irrefutable physical possession of the aircraft/engines. The NCLT court said in its 29-page ruling on the petitions brought by several lessors of Go First that the petitioners would not be within their rights to claim ownership of these aircraft/engines under Section 14(1)(d).

 

It continued, “The moratorium prevents the lessors (applicants) from recovering the aircraft/engines from the corporate debtor.”

 

On May 3, 2023, Go First ceased flying and voluntarily requested the start of CIRP against it since it was unable to fly because Pratt & Whitney engines were not available.

 

The NCLT accepted Go First’s request to begin voluntary insolvency resolution procedures on May 10.

 

Go First’s RP requested NCLT clearance earlier this week to reimburse Rs. 597.54 crore to about 15.5 lakh travelers who reserved tickets for travel on and after May 3.

 

The NCLT had informed the lenders and insolvency watchdog IBBI of this.