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Business News/ Companies / News/  NCLAT allows Go First lessor to inspect aircraft
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NCLAT allows Go First lessor to inspect aircraft

This decision modified the NCLT's 26 July order, which permitted Go First to use the leased aircraft

Go First, earlier owned by the Wadia Group, filed for insolvency attributing financial troubles to Pratt and Whitney's faulty engines. REUTERS/Adnan Abidi/File Photo (REUTERS)Premium
Go First, earlier owned by the Wadia Group, filed for insolvency attributing financial troubles to Pratt and Whitney's faulty engines. REUTERS/Adnan Abidi/File Photo (REUTERS)

New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Friday allowed Go First Airline's engine lessor, Engine Lease Finance BV, to inspect its four parked engines leased to the grounded airline.

This decision modified the NCLT's 26 July order, which permitted Go First to use the leased aircraft, and noted that it does not approve the part of the NCLT order that restrained the engine lessor from inspecting the engines.

The NCLAT instructed NCLT to promptly dispose of the matter. The court also directed the resolution professional (RP) to provide an inspection date within 10 days.

During the hearing, the lawyer representing the engine lessor, Anandh Venkatramani, mentioned that RP had informed them on 5 June, 2023, through a letter, that inspection of the engines would be allowed by them, but the RP did not act upon it.

Venkatramani emphasized the need to inspect the engines, each valued at $15 million, as they are sophisticated and crucial machinery. The engine lessor argued that it should be treated on par with aircraft lessors, who were allowed to inspect their parked aircraft by the Delhi High Court's single bench.

In response, senior lawyer Ramji Srinivasan who appeared on behalf of the RP requested the court not to intervene in the NCLT proceedings, as the final order in the case is expected on 1 September. However, NCLAT rejected Go First's request and stated that engine inspection must be allowed.

In July, NCLT permitted Go First to use ground-leased aircraft and resume operations, based on the ground that the Directorate General of Civil Aviation (DGCA) hadn't deregistered the aircraft, implying their availability for operations.

Meanwhile, the deregistration case filed by the aircraft lessors is undergoing day-to-day hearings in front of the single bench of the Delhi High Court. The high court’s division bench and the Supreme Court upheld the single bench's order, allowing lessors to inspect parked aircraft.

Mint earlier reported how despite approvals from the aviation regulator DGCA, Go First RP Shailendra Ajmera hasn't managed to raise funds due to a Delhi High Court order.

The airline has approached the CoC for an immediate infusion of 100 crore into the airline and to be able to service its insurance and other statutory obligations.

Go First, earlier owned by the Wadia Group, filed for insolvency attributing financial troubles to Pratt and Whitney's faulty engines. NCLT admitted the case on May 10, also suspended the board, and imposed a moratorium on the airline's financial obligations. 

The moratorium caused several Go First aircraft lessors, including SMBC Aviation Capital, SFV Aircraft Holdings, and GY Aviation Lease, to challenge the NCLT's admission of Go First's insolvency, arguing that they should be allowed to reclaim their leased aircraft, but NCLAT refused their plea to stay NCLT proceedings.

Later, lessors such as 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, approach the Delhi High Court and sought deregistration of the aircraft leased to Go First.

 

 

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Published: 18 Aug 2023, 03:10 PM IST
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