HCs shouldn’t hear insolvency cases, argues Go First RP

High courts should not entertain insolvency-related petitions, the resolution professional of Go First argued before the Delhi High court on Wednesday.

The high court is hearing a batch of writ petitions filed by multiple lessors seeking the court’s intervention to direct the Directorate General of Civil Aviation (DGCA) to deregister the aircraft leased to Go First. The matter will be taken up by the high court on Thursday.

On 10 May, the National Company Law Tribunal (NCLT) in its order admitted Go First under insolvency. Due to the imposition of the moratorium under the Insolvency and Bankruptcy Code, 2016, the lessors do not have a legal position to take back possession of the aircraft leased to the cash-strapped airline, thereby leading to a dispute between the two.

However, according to lessors they are entitled to take possession of the aircraft from Go First and this has led to lessors writing to the DGCA to deregister the aircraft.

After NCLT order was passed, lessors then approached appeals court seeking relief. NCLAT, however, upheld the NCLT order allowing initiation of voluntary insolvency of Go First.

Ramji Srinivasan, senior counsel representing the Interim Resolution Professional (IRP) of Go First, argued that if the lessors had opportunity to approach Supreme Court as directed by NCLAT then why did they knock on the doors of the high court.

Citing a previous Supreme Court order, the senior counsel argued that the top court has already clarified that IBC applications need to be entertained by the adjudicating authorities (NCLT and NCLAT) and not by the high courts.

“There is no doubt that IBC is clearly a special statute and a single guide for all issues pertaining to the issues of insolvency,” the senior counsel said citing the top court’s order.

“As per the NCLT directions, I (speaking on behalf of IRP) have been asked to take care of the 7,000 employees and not retrench them,” the senior counsel said.

Meanwhile, DGCA counsel informed court that it will submit before court all documents pertaining to lessors’ request for deregistering the aircraft.