NCLAT allows Go First lessor to inspect grounded aircrafts

Go First, formerly owned by the Wadia Group, filed for bankruptcy blaming Pratt & Whitney’s defective engines for its financial problems. On May 10, NCLT acknowledged the issue, suspended the board, and put a hold on the airline’s financial commitments.

On Friday, the National Company Law Appellate Tribunal (NCLAT) granted Engine Lease Finance BV permission to examine the four parked engines it had leased to Go First Airline, a grounded airline.

In this ruling, the NCLT modified its order from July 26 that allowed Go First to utilize the leased aircraft and stated that it did not agree with the NCLT order’s provision prohibiting the engine lessor from examining the engines.

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The NCLAT directed NCLT to resolve the situation as soon as possible. The resolution professional (RP) was also ordered by the court to give an inspection date within 10 days.

Anandh Venkatramani, the attorney for the engine lessor, indicated during the court that RP had written to them on June 5, 2023, informing them that they would permit engine inspection, but that RP had taken no action.

Venkatramani stressed the significance of inspecting the sophisticated and essential engines, each of which is worth $15 million. The engine lessor contended that it ought to be given the same treatment as aircraft lessors, who were permitted by the single bench of the Delhi High Court to check their parked aircraft.

Senior attorney Ramji Srinivasan responded by asking the court not to get involved in the NCLT proceedings since the ultimate ruling in the matter is anticipated on September 1. Go First’s motion was denied by NCLAT, who ruled that engine check must be permitted.

The Directorate General of Civil Aviation (DGCA) had not deregistered the aircraft, indicating their readiness for operations, and NCLT had granted Go First permission to utilize them and resume operations in July.

Daily hearings for the deregistration case brought by the aircraft lessors are taking place in front of the Delhi High Court’s single bench. Lessors are now able to inspect parked aircraft because the Supreme Court and the high court’s division bench upheld the single bench’s decision.

According to a previous Mint story, a Delhi High Court judgment has prevented Go First RP Shailendra Ajmera from raising money even though he has received license from the aviation authority DGCA.

In order to meet its insurance and other legal responsibilities, the airline has applied to the CoC for an emergency infusion of Rs. 100 crore.

Go First, formerly owned by the Wadia Group, filed for bankruptcy blaming Pratt & Whitney’s defective engines for its financial problems. On May 10, NCLT acknowledged the issue, suspended the board, and put a hold on the airline’s financial commitments.

A number of Go First aircraft lessors, including SMBC Aviation Capital, SFV Aircraft Holdings, and GY Aviation Lease, argued that they should be permitted to reclaim their leased aircraft as a result of the moratorium but NCLAT rejected their request to stay NCLT proceedings.

Later, lessors including Pembroke Aircraft Leasing 11 Ltd, SMBC Aviation Capital Ltd, Accipiter Investments Aircraft 2 Ltd, EOS Aviation 12 (Ireland) Ltd, SFV Aircraft Holdings IRE 9 DAC Ltd, ACG Aircraft Leasing Ireland Ltd, and DAE SY 22 13 Ireland Designated Activity Company approached the Delhi High Court and requested that the aircraft that had been leased to Go First be deregistered.