Go First Suspended Board Takes Legal Action, Files Caveats with Supreme Court against Aircraft Lessors
On Tuesday, the suspended board of Go First took action by filing caveats with the Supreme Court against four aircraft lessors associated with the airline, which has been facing a financial crisis. Varun Berry, the Chairman of the suspended board, submitted four caveats through his counsel, advocate Pranjal Kishore. This information is available on the Supreme Court of India’s website.
The four lessors named in the caveats are SMBC Aviation Capital Ltd, GY Aviation, SFV Aircraft Holdings, and Engine Leasing Finance BV (ELFC). These lessors collectively own approximately 22 aircraft.
The purpose of filing the caveats is to protect the interests of the suspended board of Go First against any unfavorable rulings. The caveats specifically target the order issued by the National Company Law Appellate Tribunal on Monday, which affirmed the order given by the Delhi bench of the National Company Law Tribunal on May 10.
NCLT
The Principal Bench of the National Company Law Tribunal (NCLT) accepted Go First’s plea to commence voluntary insolvency resolution proceedings. As part of this decision, the NCLAT appointed an interim resolution professional (IRP) to suspend the board of the company.
To ensure that they are given an opportunity to be heard before any orders are passed against them, a litigant files a Caveat application.
Berry, who serves as the Executive Vice-Chairman and Managing Director of Britannia Industries, the FMCG arm of the Wadia group, also holds the same positions.
The aircraft lessors are strongly opposing the insolvency proceedings against Go First and are actively seeking repossession of their planes, which had their leases terminated before May 10.
NCLAT’s Order on Go First
The NCLAT’s order instructed the lessors to approach the NCLT regarding their claims for possession and other relevant matters concerning the aircraft. These claims arise from the termination of leases by the lessors after Go First initiated the insolvency process.
The NCLAT, in a comprehensive 40-page order, addressed the pleas of the lessors, stating that they are free to submit an appropriate application before the NCLT, as per Section 65 of the Insolvency & Bankruptcy Code (IBC). The authorities encourage the lessors to include the necessary arguments and evidence regarding their claims in the application.
According to the NCLAT, both the appellants and the IRP (Insolvency Resolution Professional) have the freedom to file a suitable application before the Adjudicating Authority (NCLT). This application should seek a declaration regarding the applicability of the moratorium on the aircraft, specifically those for which the leases in favor of Go First were terminated before the admission of the Section 10 Application. The Adjudicating Authority is responsible for considering and deciding on this application in accordance with the relevant laws.
During this month, numerous lessors have approached the DGCA (aviation regulator) to initiate the process of deregistering and repossessing Go First’s fleet of 45 planes.
Go First ceased its operations on May 3, thereby discontinuing its flights.
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