Delhi High Court Allows Go First, in Need of Funds, to Conduct Maintenance on Leased Aircraft

The Delhi High Court issued a directive to cash-strapped Go First airline on Wednesday, instructing them to conduct aircraft maintenance for the planes leased to them. The court also granted permission to the lessors to periodically inspect the aircraft.

The division bench, comprising Chief Justice Satish Chandra Sharma and Justice Sanjeev Narula, noted that the Directorate General of Civil Aviation had estimated a minimum of 15 days for granting the necessary approvals to resume operations. Therefore, the court emphasized the importance of expediting the hearing and resolution of the matter by a single judge.

A single judge issued an interim order on July 5, granting permission to the lessors to inspect their respective aircraft at least twice a month and perform maintenance tasks.

The single judge received petitions from multiple lessors who sought de-registration of their planes from the aviation regulator DGCA in order to repossess them from the airline. The court instructed the single judge to expedite the decision-making process. The court provided the parties with the opportunity to request an earlier hearing date and emphasized the significance of achieving a prompt resolution.

During this time, Go Air, represented by the RP (Resolution Professional), was granted permission to conduct maintenance on the aircraft parked at various airports. The court granted the petitioners permission to conduct monthly inspections of the aircraft, following legal procedures and obtaining the necessary authorization.

It is important to note that the court abstained from expressing any opinion on the merits of the dispute between the parties. Additionally, the DGCA obtained the freedom to proceed with the airline’s submitted resumption plan.

Pending Petitions from Lessors

The court requested the airline and the DGCA to submit their responses to the pending petitions from the lessors before the single judge.

Furthermore, it stated that the NCLT and the single judge are free to proceed with the hearings regarding the specific issues before them.

The appellant resolution professional, represented by senior advocate Neeraj Kishan Kaul, challenged the single judge’s order on the grounds that it contradicted the law and would have a negative impact on their efforts to revive the operations of Fo First.

The lawyer also stressed that the NCLT should hear and decide the issues raised by the lessors.

Senior advocate Rajiv Nayar, representing one of the lessors, pointed out that the lease agreement for the aircraft between the parties had already been terminated and the lessor should not be compelled to continue with it.

Anjana Gosain, counsel for DGCA, informed the court that the aviation regulator had already responded to the airline’s resumption plan on the same day it submit and was now awaiting a response from the resolution professional.

She added, “The airline will proceed with route applications, and we expect the approval process to take approximately 10 days.”

According to the DGCA counsel, as per the existing framework, only Go First authorizes to handle the day-to-day maintenance of the aircraft, and lessors would require approvals to undertake the same responsibilities.

Previously, multiple aircraft lessors of Go First had approached a single judge to request the deregistration of their planes by the aviation regulator DGCA, enabling them to reclaim the aircraft from the airline.

In a temporary ruling, the single judge directed the DGCA to grant permission to the lessors, their employees, and agents to access the airport where their aircraft is currently parked for inspection purposes.

Go First Workforce

The resolution professional appointed by the NCLT, responsible for managing Go First, had earlier informed the high court that returning the aircraft to the lessors would essentially render the airline, which has a workforce of 7,000 employees, nonoperational.

The National Company Law Tribunal (NCLT) accepted Go First’s voluntary petition for insolvency resolution on May 10, and the airline appointed Abhilash Lal as the interim resolution professional to manage the carrier. In response, the National Company Law Tribunal (NCLT) appointed Abhilash Lal as the interim resolution professional to actively oversee the management of the airline during this process.

The ongoing insolvency resolution proceedings have imposed a moratorium on Go First, which prevents the transfer of assets and fulfillment of financial obligations. As a result, the lessors are currently unable to deregister the aircraft that they had leased to the airline.

Previously, the lessors had argued before a single judge that the denial of deregistration by the Directorate General of Civil Aviation (DGCA) was unjustified and against the law.

The lessors who have taken their case to the high court include 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 ceased its operations on May 3.

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