 "Go First")
Go First lessors on Thursday requested the Delhi High Court for the deregistration of their aircraft in light of a recent notification by the Ministry of Corporate Affairs (MCA) that exempted aircraft, engines, and airframes from a moratorium under the Insolvency and Bankruptcy Code, 2016.
The lessors also said it was the primary duty of the Directorate General of Civil Aviation (DGCA) to either reaffirm their position by virtue of this new event or change it. “The resolution professional (RP) or the committee of creditors (CoC) plays a tertiary role. It is essentially the DGCA’s decision,” counsel representing one of the lessors said.
Advocate Anjana Gosain, representing the DGCA, said they would abide by the court’s decision. “As a government entity, we have to act responsibly. Thus, based on the recent notification, we will follow this honourable court’s interpretation. There has never been a different stand, so why do the lessors have these apprehensions?,” she said.
Justice Tara Vitasta Ganju initially remarked that “it is incumbent upon the DGCA to deregister the aircraft”, but later permitted the aviation regulator to articulate its position on the matter.
Meanwhile, Neeraj Kishan Kaul, counsel for the RP, requested time from the court to review the notification and consult the CoC. They contested the lessors’ assertion that the CoC had only a tertiary role in this situation.
The court provided both the RP and the DGCA the opportunity to clarify their respective stances. The issue will be heard on October 19.
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Aircraft lessors had previously approached the Delhi High Court to deregister their planes held by Go First. The prevailing moratorium had previously prevented the lessors from reclaiming their aircraft.
On Wednesday, the MCA excluded all transactions and contracts concerning aircraft and their engines from the moratorium under Section 14 of the IBC. This directive will empower lessors to promptly retrieve their aircraft from airlines.
Aircraft lessors had expressed dissatisfaction over the past months after the National Company Law Tribunal (NCLT) in May prohibited them from reclaiming their planes from Go First. Go First ceased flight operations on May 3 after submitting an insolvency application to the tribunal.
With the latest directive, the government has formally adopted the Cape Town Convention, an international treaty that furnishes time-sensitive solutions for lessors to reclaim aircraft, thereby minimising their inherent risks. Lessors have championed the enforcement of this treaty, which will accord priority to the Convention over insolvency laws in India.
