Go First Landlord Termination Request Not Rejected: DGCA

The Directorate General of Civil Aviation (DGCA) told the Delhi High Court that it has not rejected Go First’s lessors’ request to terminate the leases for the aircraft held by the cash-strapped airline.

Lawyer Anjana Gossain, representing the DGCA, said there was a glitch on the DGCA website showing that the request of some lessors to terminate aircraft leases was rejected.

Gossain said that after Go First’s voluntary insolvency application was accepted by the National Company Law Tribunal (NCLT), Delhi on May 10, all lessors were informed that there was a moratorium and their application to terminate the aircraft leases. could not be processed.

Judge Tara Vitasta Ganju of the Delhi High Court asked the DGCA why different replies were sent to different landlords regarding the status of termination of leases. Judge Ganju asked the aviation regulator to explain on June 1 whether the DGCA informed the lessors of the current status of their termination application.

The Go First lessors had filed a high court action against the DGCA, seeking to cancel the registration of their aircraft leased to Go First. This was shortly after NCLAT confirmed the NCLT order on May 22.

The petitions were filed by Pembroke Aircraft Leasing 11 Limited, Accipiter Investments Aircraft 2 Limited, EOS Aviation 12 (Ireland) Limited, DAE SY 22 13 Ireland Designated Activity Company, SFV Aircraft Holdings IRE 9 DAC Limited, ACG Aircraft Leasing Ireland Limited and SMBC Capital limited aviation. All of them have been clubbed together to listen.

The DGCA had told the high court earlier that it had not denied the Go First lessors’ request to deregister the aircraft, but had left the (deregistration) process on hold due to the moratorium.

The lessors had told NCLAT that they had sought to cancel the Go First plane’s registration before the bankruptcy was admitted. In response to this, Go First argued that the lessors had hastily applied for deregistration as soon as they learned of the fact that the airline was declaring bankruptcy.

The lessors argued that, in accordance with the Irrevocable Deregistration and Export Request Authorizations (IDERA), it was mandatory for the DGCA to deregister the aircraft at their request.

The high court will continue to hear arguments in the case on June 1.

Go First’s Interim Resolution Professional (IRP) had told the Delhi High Court on Tuesday that no parallel proceedings could take place in the case and that the court could not interfere in the resolution process.

This was once again reiterated by the IRP at the May 31 hearing.

Lead lawyer Harish Salve, representing the IRP, had told the court that a pre-trial court (the high court in this case) should not interfere in the resolution process after the NCLT has accepted the insolvency application.

He said that there were many Supreme Court rulings that had said this.

“Courts should not interfere in the Insolvency and Bankruptcy Code (IBC) process because the essence of this process is that it is time limited. Interest begins to accrue with each day that passes in all installments,” said Salve.

He argued that if the court were to release the aircraft in accordance with the lessors’ request, the airline would not be able to resume operations and thousands of employees would lose their jobs.

After the declaration of bankruptcy was admitted, a moratorium was placed, which meant suspending all or some legal recourse against Go First. This meant that the lessors could not repossess their aircraft in the possession of the cash-strapped airline.

Salve told the high court that if the landlords wanted to appeal NCLAT’s decision, they should have gone to the Supreme Court. In addition, if they wanted redress in terms of deregistering their aircraft or other remedies (an application of malicious intent against Go First), they could have approached NCLT as directed by NCLAT’s order, he added.