Delhi High Court grants big relief to lessors who leased planes to Go First Airlines

The Delhi High Court on Friday ordered the de-registration of the planes leased out to Go First Airlines by various companies, and restrained the debt-ridden airline from flying them. .Justice Tara Vitasta Ganju asked the Directorate General of Civil Aviation (DGCA) to initiate the de-registration process within five working days.The Court further restrained the Resolution Professional (RP) of Go First from replacing or taking out any accessories, spare parts, documents or other material from the planes.The RP has been further ordered to provide up-to-date information and documentation in relation to the aircraft to the lessors..A detailed judgment copy is awaited..The Court passed the order on 14 petitions filed by various companies who had leased their aircraft to Go First Airlines, which is undergoing insolvency at present.The aircraft lessors had stated that they had filed applications for the de-registration of their aircrafts, but the same were rejected by the 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..In an interim order passed on July 5, 2023 the High Court had allowed the lessors access to the planes to carry out the maintenance work on them.The Court also had allowed lessors' representatives to inspect the planes and restrained Go First and its Interim Resolution Professional (IRP) from removing any parts or documents from the planes in question..Planes not being maintained is a problem for everybody: Delhi High Court in Go First dispute.Go First later challenged the order before the Division Bench.The Division Bench refused to disturb the single-judge’s directions, but modified one of the directions to the extent that Go First can carry out maintenance of the aircrafts, their engines and other parts and components.The case then travelled to the Supreme Court, which also dismissed Go First's appeal on August 7..Last year, Go First had 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 IRP to ensure there are no layoffs.This decision to initiate insolvency proceedings was upheld by the National Company Law Appellate Tribunal (NCLAT) in an order pronounced on May 22.