Delhi High Court Permits Lessors To Carry Out Inspection, Interim Maintenance Of Aircrafts On Lease With Go First

The Delhi High Court on Wednesday permitted various lessors to carry out inspection and interim maintenance tasks of their aircrafts, which are currently on lease with crisis-hit Go First airline, twice a month until final disposal of their pleas to de-register their planes from the airline.

In the judgment on the applications moved by the lessors seeking interim relief in their petitions, Justice Tara Vitasta Ganju said: “There can also be no denial of the fact that the Aircrafts of the Petitioners are extremely valuable and highly sophisticated equipment and require regular maintenance for their preservation.

The court said that the lessors and its employees or agents shall be permitted by the Directorate General of Civil Aviation (DGCA) and appropriate airport authorities to access the airport where their aircrafts, which are 30 in number, are parked and to inspect them within three days.

“The petitioners (lessors) shall carry out the inspection and interim maintenance tasks of the 30 aircrafts twice a month until final disposal of the writ petitions,” the court said.

In the meanwhile, the court also restrained Go First, which is facing insolvency proceedings, and the resolution professionals appointed by National Company Law Tribunal (NCLT) from removing or replacing any part or components of the aircrafts, except with the lessors’ approval.

“Respondent/GoAir, its directors, employees, agents, officers and or representatives or the IRP/RP(s) or any person acting on their behalf, are hereby restrained from removing, replacing, taking out any accessories, parts, components or spares, etc. or any relevant operational or other Manuals /records, documentation from any of the 30 Aircraft, except with prior written approval of the Lessor of such Aircraft,” the court said. 

The court observed that the aircraft lessors made out a strong prima facie case in view of the provisions of the Aircrafts Rules and that the balance of convenience was also in their favour. 

“The Petitioners are suffering irreparable losses as the value of these Aircrafts are diminishing on a daily basis,” the court added. 

The lessors are Pembroke Aircraft Leasing 11 Limited, SMBC Aviation Capital Limited, Accipiter Investments Aircraft 2 Limited and EOS Aviation 12 (Ireland Limited), DAE SY 22 13 Ireland Designated Activity Company, SFV Aircraft Holdings Ire 9 DAC Limited, ACG Aircraft Leasing and GY Aviation Lease 1722 Co Limited. 

It is the case of the lessors that the airline in question has no right to use their aircrafts as the leases concerning them have been terminated. The respondents in the petitions include Union of India and Director General of Civil Aviation.

On May 22, the National Company Law Appellate Tribunal upheld the order passed by NCLT whereby Corporate Insolvency Resolution Process was initiated against Go Airlines (India) Limited. Go First airlines stopped flying from May 03.

NCLAT had rejected an appeal filed by the lessors challenging NCLT’s direction to keep the leased aircrafts intact in the possession of Go Airlines.

Since the lessors had challenged the imposition of moratorium on leased aircrafts when the lease agreement stood terminated prior to CIRP, the NCLAT granted liberty to IRP and the lessors to file applications before the NCLT with respect to their claims relating to the leased aircrafts.

Senior Advocates Rajiv Nayar and Amit Sibal, briefed by Advocates Marylou Bilawala, Pranaya Goyal, Dhruv Khanna, Sharleen Lobo, Chiranjivi Sharma, Apoorva Kaushik, Priya Desai, Saakshi Malpekar, Neetika Sharma, Vasu Gupta and Girish Shanker from Wadia Ghandy & Co., represented Aircraft Lessors SMBC Aviation Capital, SFV Aircraft Holdings and GY Aviation.

Title: PEMBROKE AIRCRAFT LEASING 11 LIMITED Vs. DIRECTORATE GENERAL OF CIVIL AVIATION & ORS. And other connected matters

Citation: 2023 LiveLaw (Del) 556

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