NCLT allows Go First to use aircrafts; denies lessors access to planes for maintenance

The New Delhi bench of NCLT has allowed Go First to fly the aircrafts it procured by leasing. The NCLT in its order dated 26 July 2023 rejected a plea from lessors of Go First asking the tribunal to refrain the airlines from operating or flying the aircrafts.

The NCLT in its order said that 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 aircrafts/engines are registered, they can be used for operating or flying to keep the Corporate Debtor (Go First) as a going concern, however, within the safeguards/safety norms prescribed by the Regulators,” said the tribunal in its order.

The NCLT further said in its order that it has already been ordered by this Tribunal vide its admission order dated 10 May 2023 that it is the duty of the IRP to keep the corporate debtor as a going concern, and in order to keep the Corporate Debtor as a going concern, the Aircrafts have to be flown.

The tribunal argued that the aircrafts which were provided by the Lessor on Lease to the Corporate Debtor, come within the definition of the ‘property’ as per the IB Code, 2016, and as per Section 14 (1) (d), the moratorium has been imposed upon the property.

“The physical possession of the aircrafts/engines is indisputably with the Corporate Debtor. Therefore, in terms of Section 14(1) (d) the Applicants would not be within their rights to claim possession of these aircrafts/engines,” said the NCLT.

Six lessors of Go First had moved an interlocutory application in NCLT seeking the tribunal to order the corporate debtor from flying the aircrafts. They had also requested the NCLT to order Go First to ensure maintenance and safety of aircrafts and engine.

The NCLT also declined the request of the lessors that they be allowed to conduct inspection of the aircrafts. The resolution professional – Shailendra Ajmera – had opposed the request of the lessors saying that there is no need for inspection, as he is under obligation to maintain and protect the assets as per the duty assigned to him under the Code.

NCLT concurred with the argument of the resolution professional and said that it strongly reiterates the responsibility of the resolution professional to maintain the property/Aircraft/engines at the highest levels of efficiency/safety.

“Since by our order dated 15 June 2023, we have already asked the resolution professional to maintain the aircrafts, therefore, no fruitful purpose would be served by allowing this prayer. Hence, we are not inclined to allow this prayer,” the NCLT said in its order.

Also See: DGCA accepts flight resumption plan of Go First, but with some conditions