 "Go First")
The Delhi High Court on Thursday reserved its order on petitions filed by Go First's lessors against the Directorate General of Civil Aviation (DGCA) for the release of their aircraft currently in the possession of the cash-strapped airline.
The DGCA had told the high court earlier it had not rejected the application of Go First’s lessors for deregistering the aircraft but had kept the process (of deregistration) in abeyance because of the moratorium. A moratorium period is the suspension of all or certain legal remedies against debtor(in this case Go First).
The lessors of Go First had moved the high court against the DGCA shortly after the NCLAT, on May 22, upheld the National Company Law Tribunal(NCLT) Delhi's order. The NCLT had admitted Go First's voluntary insolvency application on May 10.
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 Aviation Capital Limited. All of them have been clubbed together for hearing.
The lessors argued that, according to the Irrevocable De-registration and Export Request Authorisations (IDERA), it was mandatory for the DGCA to deregister the aircraft upon their request.
The lessors told the court that according to Rule 30(7) of the Aircraft Rules, 1937, the registration of an aircraft in India to which Cape Town Convention applies, shall be cancelled by the Central government without seeking permission from aircraft holder if an IDERA holder(lessors) gives an application for cancellation of lease.
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"There is no concept of rejection or abeyance. They(DGCA) have to cancel leases," Senior Advocate Arun Kathpalia, appearing for SMBC Aviation said.
Accipiter, meanwhile, argued that Go First cannot resume operations as the aircraft is not theirs to fly. "How can they fly the planes when Indian life will be put at risk?," counsel for Accipiter asked.
Justice Tara Vitasta Ganju of Delhi High Court heard the arguments till 6 pm on Thursday and reserved the order.
The Interim Resolution Professional (IRP) of Go First had told the court on Tuesday told the Delhi High Court that parallel proceedings could not go in the case and that the court could not interfere in the resolution process.
This was again reiterated by the IRP in the hearing on May 31.
Senior advocate Harish Salve, appearing for the IRP, had told the court that a writ court (the high court in this case) should not interfere in the resolution process after the insolvency application had been accepted by the NCLT.
He said there were many Supreme Court judgments 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-bound. Interests start piling up with every passing day on all dues,” Salve said.
He argued 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.
