Delhi HC permits Go First to maintain leased aircrafts

The Delhi High Court on Wednesday permitted crisis-hit Go First airline to carry out the maintenance of aircraft leased to it while allowing the lessors to inspect the planes periodically.

A division bench headed by Chief Justice Satish Chandra Sharma, while dealing with appeals by the resolution professional (RP) appointed under the insolvency law to manage the airline, against an order by a single judge, also clarified that the DGCA shall be free to act on the plan submitted by the airline for resumption of its operations.

In an interim order passed on July 5, the single judge had allowed the lessors to inspect their aircraft at least twice a month and carry out the maintenance work.

The order by the single judge was passed on petitions by several lessors seeking de-registration of their planes by aviation regulator DGCA so they could take them back from the airline.

The bench, also comprising Justice Sanjeev Narula, noted on Wednesday that according to the DGCA, the grant of necessary approvals to Go First to resume flying operations will take a minimum of 15 days, and so it will be in the interest of justice that the matter is finally decided by the single judge herself.

“Single judge is requested to decide the matter on an early date. It shall be open to the parties to file an application for preponing the date of hearing (of August 3) and the single judge is requested to decide the matter on an early date,” the court said.

“In the meantime, the airline Go Air through the RP shall be permitted to carry out the maintenance of the aircraft parked at various airports. The writ petitioners shall be free to inspect the aircraft (with due permission and as per law on a monthly basis),” the court ordered.

The court also said it has not expressed any opinion on the merit of the dispute between the parties and added the DGCA shall be free to proceed with the resumption plan submitted to it by the airline.

The court asked the airline and the DGCA to file their response to the petitions by the lessors pending before the single judge.

The NCLT and the single judge are free to proceed with the hearings on the issues before them, it added.

The appellant resolution professional, represented by senior advocate Neeraj Kishan Kaul, assailed the order of the single judge on the ground that it was contrary to the law and would adversely impact its efforts to revive the operations of Go First.

The lawyer also said the issues raised by the lessors ought to be heard and decided by the NCLT.

Senior advocate Rajiv Nayar, appearing for one of the lessors, said the lease agreement between the parties for the aircraft has been duly terminated and the lessor cannot be forced to continue with it.

DGCA counsel Anjana Gosain submitted the aviation regulator has replied to the resumption plan submitted by the airline on Wednesday itself and has to now await the response of the resolution professional.

The airline will then apply for routes etc and the approval process will take about 10 days, she added.

The DGCA counsel had earlier said under the applicable framework, only Go First was authorised to look after the day-to-day maintenance of the aircraft and lessors would need approvals to do the same.

Several aircraft lessors of Go First had earlier approached the single judge seeking deregistration of their planes by aviation regulator DGCA so they could take them back from the airline.

While granting interim relief, the single judge had asked the DGCA to permit the lessors, their employees and agents to access the airport where their aircraft are currently parked and to inspect.

Earlier, the NCLT-appointed resolution professional, tasked with managing Go First, had told the high court that returning aircraft to the lessors will render the airline, which has 7,000 employees to look after, “dead”.

On May 10, the National Company Law Tribunal (NCLT) had admitted the airline’s voluntary insolvency resolution petition and appointed Abhilash Lal as the interim resolution professional to manage the carrier.

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With a moratorium in force on financial obligations and transfer of assets of Go First in the wake of the insolvency resolution proceedings, the lessors are unable to deregister and take back the aircraft leased to the carrier.

The lessors had earlier told the single judge that denial of deregistration by the DGCA was “illegitimate”.

The lessors who have approached the high court are: Accipiter Investments Aircraft 2 Limited, EOS Aviation 12 (Ireland) Limited, Pembroke Aircraft Leasing 11 Limited, SMBC Aviation Capital Limited, SFV Aircraft Holdings IRE 9 DAC Ltd, ACG Aircraft Leasing Ireland Ltd and DAE SY 22 13 Ireland Designated Activity Company.

Go First stopped flying from May 3.

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