 "Resolution professional questions timing of cos cancelling Go First leases")
Aircraft leasing companies were aware of Go First’s financial troubles but terminated leases when it filed for insolvency, the resolution professional (RP) in the bankruptcy process told the National Company Law Tribunal on Tuesday.
Senior advocate Ramji Srinivasan, appearing for the RP, said Go First received a notice terminating aircraft and engine leases on May 2, when the airline announced it would file for insolvency.
The tribunal was hearing applications by SMBC and Engine Lease Finance BV, aircraft and engine lessors, asking for their assets to be exempted from the moratorium period. The two companies told the court that they had terminated leases before the moratorium started on May 10.
The tribunal told one of the lessors it cannot go into the legality of the termination. "You are asking if the moratorium is applicable to termination notice. This means we should answer if the termination is valid? How will we say that such a notice is valid or not?" it said.
The tribunal said that it cannot go into legality of termination notice when the lessors' prayers did not ask for it.
"Insolvency did not trigger termination notice. Termination (of leases) was outside moratorium," the lessor told the tribunal.
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The arguments will continue on September 22.
Go First's application for insolvency was admitted by NCLT on May 10 and the airline was put under a moratorium, which means aircraft cannot be taken back from it.
Lessors have moved the tribunal to exempt aircraft and engines from the moratorium. They have moved the Delhi High Court against the Directorate General of Civil Aviation for release of their aircraft.