A two-judge bench of the Delhi High Court on July 11 deferred to July 12 the hearing of appeals by grounded airline Go First’s resolution professional against the order of a single judge permitting the aircraft lessors to inspect and carry out maintenance work of their 30 aircraft and their parts twice in a month.
During the hearing today, senior advocate Rajiv Nayyar, appearing for one of the lessors, argued that the moratorium would not apply to them as they had terminated their leases prior to Go First being admitted to insolvency. He further argued that Go First cannot use the aircraft as the rules mandate that it cannot be used once the lease is terminated.
The bench at this point questioned the lessor on the applicability of Section 14 of Insolvency Bankruptcy Code, 2016, in this case. Section 14 prohibits the alienation or sale of any assets owned by a company under insolvency. Nayyar argued that the company does not own the asset as they have only been leased to them.
The bench also questioned Director General of Civil Aviation (DGCA) on why aircraft lessors could not undertake its maintenance. DGCA responded by stating that Go First is Continuous Airworthiness Maintenance Organisation (CAMO) compliant, while the lessors are not. According to DGCA, the Civil Aviation Requirements (CAR) do not permit any organisation other than CAMO compliant ones to maintain the aircrafts. DGCA also made it clear that they would not be able to permit Go First to resume operations unless they are certain that a CAMO compliant organisation is maintaining the aircraft.
Appearing for the RP, senior advocate Neeraj Kishan Kaul reiterated that Go First was ready to commence operations as soon as they get the requisite approval from DGCA. He further argued that the lessors had not terminated the leases despite knowing fully well that Go First was defaulting in payments since 2020, however they did so once Go First announced that it was filing for voluntary insolvency.
The court decided to continue the hearing on July 12 due to paucity of time.
The hearing of the Go First insolvency case is expected to be closely watched by other airlines and aircraft lessors in India. The outcome of the case could have implications for the future of the insolvency resolution process in the country.