Go First Insolvency: Lessors Cannot Initiate Parallel Proceedings, Says IRP

Parallel proceedings cannot be continued by the lessors before the Delhi High Court as well as the insolvency tribunal, Go First Ltd.'s Interim Resolution Professional submitted on Tuesday.

Arguing for the insolvent airline's IRP before the high court, Senior Advocate Harish Salve said the petition filed by the lessors against the Directorate General of Civil Aviation is not maintainable.

If the lessors wanted to appeal against the order of the National Company Law Appellate Tribunal, they should have gone to the Supreme Court and for any other purpose, they were directed by the appellate tribunal to go to the NCLT, he said.  

Arguing against the lessors' stance, the DGCA said that Go First had ongoing issues with its engine supplier, Pratt and Whitney, since 2020 but the lessors did not terminate their lease agreements then. However, the moment the airline filed for voluntary insolvency, the lessors began terminating the lease agreements. 

In the previous hearing, the lessors had submitted that the DGCA is empowered to de-register the aircraft upon the termination of lease, according to the provisions of Irrevocable De-Registration and Export Request Authorisations and the Cape Town convention. They further submitted that such a step is required to prevent the cannibalisation of the aircraft.

On May 22, the NCLAT upheld the decision of the NCLT admitting Go First into insolvency. The appellate tribunal had directed the lessors to move the NCLT with any relevant applications in the matter. 

However, a few lessors—namely Accipiter Holdings and Pembroke Aircraft Leasing—approached the Delhi High Court praying for directions to the DGCA to de-register their planes which were leased to Go First.

The DGCA had countered saying that since the NCLT had imposed a moratorium, the lessor's application to de-register the planes has been kept in abeyance.

The high court will continue to hear the DGCA's arguments on Wednesday.