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April 27, 2024

Delhi High Court Orders Deregistration of Go First Aircraft Within Five Days: What This Means for the Airline and Its Lessors

The Delhi High Court has issued a significant directive, ordering the deregistration of aircraft leased to Go First within a tight timeframe of five working days. This ruling, delivered on Friday, brings relief to the lessors involved in the case.

This decision entails that Go First must return all 54 aircraft to the lessors if its resolution professional (RP) does not contest the order or seek a stay. Justice Tara Vitasta Ganju presiding over the case also declined the RP’s request to suspend the order’s operation for a week, insisting that the five-day period would commence on Monday, allowing time for potential legal action.

In a crucial move, the court invalidated communication letters issued by the Director General of Civil Aviation (DGCA), which had previously declined to process new registration applications from the lessors. Furthermore, the court mandated that all maintenance tasks for the aircraft should be carried out by the lessors and their authorized representatives until the aircraft are deregistered and exported.

The ruling also prohibits Go First and its representatives from accessing, operating, or flying any of the aircraft. Additionally, the RP and Go First are restrained from removing or replacing any accessories, spare parts, documents, or records from the aircraft.

The court’s decision places a burden on the RP to provide detailed information regarding the maintenance of the aircraft to the lessors. Moreover, the Airport Authority of India (AAI) is now required to communicate with the lessors concerning the export of aircraft and the airworthiness of equipment.

Lessors who opt not to export their aircraft have the option to petition the court for appropriate steps. The court emphasized that the RP must promptly provide up-to-date information and documentation related to the aircraft, allowing lessors to export them as per applicable laws.

This development follows a series of events dating back to October 2023, when Go First lessors initially sought deregistration of the aircraft following a notification by the Ministry of Corporate Affairs (MCA) exempting aircraft transactions from a moratorium under the Insolvency and Bankruptcy Code.

Moreover, the National Company Law Tribunal (NCLT) granted Go First a 60-day extension on April 8, marking the third extension sought by the airline to complete its insolvency process. Notably, Sky One, SpiceJet promoter Ajay Singh, and Busy Bee Airways, owned by Nishant Pitti of EaseMyTrip, are the two bidders for the airline.

In response to the court’s ruling, Nishant Pitti stated, “We have acknowledged the judgment issued by the Delhi High Court… We will review the details of the order… Our commitment remains to proceed in a manner that respects the legal process and aligns with our strategic objectives.”

The aircraft lessors, including Pembroke Aviation, Accipiter Investments Aircraft 2, EOS Aviation, and SMBC Aviation, filed a petition before the high court in May 2023, seeking directions to release the planes leased to the insolvent airline.

The timeline of events leading up to this ruling includes the Delhi High Court’s reprimand of Go First RP on September 1 for non-compliance with an inspection order, MCA’s exemption of aircraft transactions from the moratorium on October 3, and Go First lessors’ request for aircraft deregistration on October 5.

As of April 26, 2024, the Delhi High Court’s directive to the DGCA for the deregistration of all Go First aircraft marks a pivotal moment in the airline’s ongoing insolvency proceedings, impacting its future and that of its lessors significantly.

 

Jhumpa Lahiri

Jhumpa Lahiri

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