Go First insolvency: Today, NCLAT will pass order on aircraft lessors’ petitions

The National Company Law Appellate Tribunal (NCLAT) is set to deliver its verdict on May 22 regarding the petitions filed by three aircraft lessors against Go First's voluntary insolvency resolution proceedings. 

Stakeholders eagerly await the decision of the NCLAT, which will have far-reaching implications for Go First and its lessors.

The two-member bench, led by Chairperson Justice Ashok Bhushan, earlier concluded the hearing and reserved its order while requesting the submission of any additional documents within the next 48 hours.

The tribunal heard a series of petitions filed by SMBC Aviation Capital Ltd, GY Aviation, and SFV Aircraft Holdings, all of whom have leased approximately 21 aircraft to Go First.

During the proceedings, senior advocate Arun Kathpalia, representing SMBC Aviation, argued that they had terminated the lease prior to the initiation of Go First's Corporate Insolvency Resolution Process (CIRP). 

He emphasised that, as per the Cape Town Conventions, the Directorate General of Civil Aviation (DGCA) has the authority to cancel the lease within five working days without requiring consent from Go First. Consequently, he asserted that the airline could not continue to fly or operate the aircraft.

Another lessor, represented by senior advocate Krishnendu Datta, alleged that the CIRP was a deliberate tactic by Go First, creating a smokescreen to avoid its financial obligations. Datta claimed that the airline had intentionally suspended flight operations, creating a sense of urgency and prompting the insolvency filing.

Senior Advocate Ramji Srinivasan, representing the Interim Resolution Professional, argued that the lessors' termination of the lease was an attempt to undermine the insolvency proceedings, suggesting that such a step should not have been taken once the case was before the National Company Law Tribunal (NCLT).

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In defence, senior advocate Maninder Singh, representing Go First, highlighted the airline's difficult circumstances and expressed that voluntary insolvency was a decision taken out of compulsion.

Recently, several lessors have approached the Directorate General of Civil Aviation seeking deregistration and repossession of Go First's 45 planes. The airline ceased its 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.

(With agency inputs)