Go First insolvency: Delhi High Court asks single-judge to expeditiously decide aircraft lessors' plea for de-registration of planes

A Division Bench of the Delhi High Court on Wednesday asked the single-judge to decide expeditiously and pass final orders on the aircraft lessors' plea seeking de-registration of their planes which are on lease with Go First Airlines. .A Division Bench of Chief Justice Satish Chandra Sharma and Justice Sanjeev Narula passed the order while dealing with an appeal filed by Go First (through its Resolution Professional) against the single-judge's order. On July 5, Justice Tara Vitasta Ganju had passed an interim order allowing aircraft lessors to carry out inspection and maintenance of the aircrafts. The Court had also restrained the Go First Airlines as well as the Resolution Professional (RP) from removing any parts or documents from the planes. .While dealing with the challenge to this order, the Division Bench today noted that the Directorate General of Civil Aviation (DGCA) has said that it will take at least 15 days to grant necessary approval for the resumption of Go Air flights.The Court said that because the DGCA will take some time and the single-judge is yet to pass a final order and adjudicate on the issue of maintainability, the matter should be decided by the single-judge first.The Bench said that parties can move applications for early hearing of the case as well. In the meantime, the Court said that the RP shall be permitted to carry out the maintenance of the aircrafts and the lessors shall be free to carry out inspections..The Bench further clarified that DGCA shall be free to proceed with the resumption plan of the Go First and the NCLT as well as the single-judge shall proceed with the case in accordance with law. Since we have not expressed any opinion on the merits of the case, all the contentions will be available to the parties to be raised before the single-judge, the Court added. .In an order pronounced on July 5, Justice Tara Vitasta Ganju had allowed aircraft lessors access to the planes to carry out maintenance work. The Court had also restrained the Go First Airlines as well as the Resolution Professional from removing any parts or documents from the 30 planes in question.Justice Ganju passed the interim order while dealing with a plea filed by several lessors seeking the de-registration of their aircrafts which are with Go First..Pembroke Aircraft Leasing 11, SMBC Aviation Capital, Accipiter Investments Aircraft 2, Eos Aviation 12 (Ireland), DAE SY 13 Ireland, SFV Aircraft Holdings Ire 9 DAC Limited, ACG Aircraft leasing Ireland Limited and GY Aviation Lease 1722 Co Limited were among the parties seeking de-registration of their aircrafts. .They pleaded that they had filed applications for the de-registration of these aircrafts, but the same were rejected by the Director General of Civil Aviation (DGCA).It was argued that the Insolvency and Bankruptcy Code (IBC) did not have relevant provisions for dealing with cases pertaining to de-registration, and hence, even bankruptcy tribunals were not competent to hear their pleas.Their main argument was that they had terminated their lease agreement with the airline prior to its application for insolvency. The lessors claimed that the termination had been initiated because there had been multiple defaults by Go First..The matter arose after Go First moved the National Company Law Tribunal (NCLT) in Delhi to initiate the corporate insolvency resolution process under the IBC.The NCLT Delhi had, on May 10, admitted the plea and declared a moratorium for the company. It also directed the company's suspended board of directors to co-operate with the Interim Resolution Professional to ensure there are no layoffs.The NCLT's decision was upheld by the National Company Law Appellate Tribunal (NCLAT) in an order pronounced on May 22.