The National Company Law Appellate Tribunal (NCLAT) is set to announce its decision on Monday regarding petitions filed by three aircraft lessors against Go First's voluntary insolvency resolution proceedings. This verdict will have significant implications for both Go First and its lessors.
The two-member bench, led by Chairperson Justice Ashok Bhushan, concluded the hearing and reserved its order. They requested the submission of any additional documents within 48 hours reported Mint.
During the proceedings, SMBC Aviation Capital Ltd, GY Aviation, and SFV Aircraft Holdings presented their cases. They have collectively leased around 21 aircraft to Go First.
SMBC Aviation's representative argued that they terminated the lease before Go First's Corporate Insolvency Resolution Process (CIRP) began. According to the Cape Town Conventions, the Directorate General of Civil Aviation (DGCA) can cancel the lease within five working days without Go First's consent. Hence, the airline cannot continue operating the aircraft.
Another lessor, represented by senior advocate Krishnendu Datta, alleged that Go First intentionally initiated the CIRP as a tactic to evade its financial obligations. Datta claimed that the airline deliberately suspended flight operations to create urgency and prompt the insolvency filing.
Lessors' lease termination challenged saying it aimed to undermine the insolvency proceedings
The Interim Resolution Professional's representative, senior advocate Ramji Srinivasan, argued that the lessors' termination of the lease aimed to undermine the insolvency proceedings. He suggested that such action should not have been taken once the case was before the National Company Law Tribunal (NCLT).
In defense, Go First's representative highlighted the airline's difficult circumstances and stated that voluntary insolvency was a compelled decision.
Recently, several lessors have sought deregistration and repossession of Go First's 45 planes from the Directorate General of Civil Aviation. The airline ceased operations on May 3.
Previously, the principal bench of the NCLT in Delhi appointed an interim resolution professional to oversee Go First's affairs and suspended the airline's board as part of the insolvency resolution process.
