Delhi High Court Permits Go First To Carry Out Maintenance Of Aircrafts On Lease, Subject To Monthly Inspection By Lessors

The Delhi High Court on Wednesday permitted Go First to carry out maintenance of the aircrafts, currently on lease with the crisis-hit airline, subject to a monthly inspection by the lessors.

A division bench of Chief Justice Satish Chandra Sharma and Justice Sanjeev Narula was hearing an appeal moved by Go Airlines India Limited against a single judge order permitting the lessors to carry out inspection and interim maintenance tasks of their aircrafts, twice a month until final disposal of their pleas to de-register their planes from the airline.

The single judge has listed the matter for hearing on August 03.

While disposing of Go Air’s appeal, the bench today requested the single judge to decide the lessors’ pleas on an early date and to pass final orders on the same. 

The court has also said that it shall be open for the parties to move the application for preponement of the hearing before the single judge.

“In the meantime, the appellant Go Air through its RP shall be permitted to carry out regular maintenance of the aircrafts parked at various airports, subject to a monthly inspection by the lessors,” the court said.

The court noted that the issue of maintenance was not decided by the single judge, though submissions regarding the same were addressed by the parties.

“In the considered opinion of this court, it will take minimum 15 days for the DGCA to grant approval for resumption of flying operations of the appellant airline, therefore, the matter has to be heard and decided by the single judge,” the court said.

While clarifying that it is not expressing anything on merits of the matter, the court said that all the contentions raised by the parties will be available to them before the single judge.

“The DGCA shall be free to proceed ahead with the application submitted by the appellant regarding resumption of flying operations without prejudice,” the court added.

The bench also said that the single judge and NCLT shall be free to proceed ahead in the matter in accordance with law.

The court granted one weeks’ time to DGCA and Go Air to file their counter affidavits in the pleas moved by lessors before the single judge.

On July 05, the single judge had passed the impugned order on the applications moved by the lessors seeking interim relief in their petitions.

“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 single judge observed.

It also said that the lessors and its employees or agents shall be permitted by 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.

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

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. 

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 appeared for aircraft lessors namely SMBC Aviation Capital, SFV Aircraft Holdings and GY Aviation. They were 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., Law Firm

Title: GO AIRLINES INDIA LIMITED v. SMBC AVIATION CAPITAL LIMITED & ORS. and other connected matters

Citation: 2023 LiveLaw (Del) 585