The National Company Law Appellate Tribunal today on Monday upheld an order passed by the National Company Law Tribunal that admitted an application by Go First Airlines seeking initiation of voluntary insolvency proceedings.
A Coram of Chairperson Justice Ashok Bhushan and Member (Technical) Barun Mitra of NCLAT declined the plea filed by lessors of aircrafts of Go First Airlines to take possession of the aircrafts.
The lessors SMBC Aviation Capital Ltd, GY Aviation, and SFV Aircraft Holdings moved the NCLAT after the NCLT admitted the application filed by ‘Go First Airlines’.
The lessors leased out 21 aircrafts to Go First Airlines.
The lessors informed NCLAT that they approached aviation regulator DGCA for the deregistration and repossession of Go First’s aircraft.
Also, the lessors argued that the aircraft lease terminated before the moratorium was granted, and hence moratorium couldn’t impose a freeze on 3rd-party assets.
However, the NCLAT asked the appellants to approach the adjudicating authority for any further relief. Earlier, Go Airlines moved the NCLT this month to initiate the corporate insolvency resolution process under the Insolvency and Bankruptcy Code.
Later, it reasoned that due to faulty engines supplied by the American company Pratt & Whitney (P&W), the grounding of its aircrafts increased from 31% in 2020 to more than 50% in April 2023.
Therefore, they claimed that this led company’s loss of over ₹10,800 crore.
On May 10, the NCLT Delhi admitted the plea and declared a full moratorium for the company.
It also directed the company’s suspended board of directors to cooperate with the IRP to ensure there are no layoffs.
