Go First crisis: No malice behind voluntary insolvency, infused Rs 200 cr for operations, carrier tells NCLAT ​

Go First-lessors at NCLAT: Go First airline, whose insolvency plea with National Company Law Tribunal (NCLT) was challenged by the aircraft lessors, has said that the company approached the insolvency body with good intentions to ensure 7,000 employees are protected. Senior Advocate Maninder Singh, appearing for the carrier before the National Company Law Appelate Tribunal (NCLAT), said the company had no malicious intent and cited the trust investors and passengers have put in the airlines. 

“There are 7,000 employees in the company, millions of passengers flown every day. The company has no malicious intent or fraud anywhere. The promoters infused over Rs 200 crore to keep the company afloat,” Singh said. 

SMBC Aviation Capital, which is one of the aircraft lessors of crisis-hit Go First, in its petition to NCLAT said on Thursday that the embattled carrier initiated the insolvency proceedings at the tribunal to confuse issues and defeat lessors' rights over the aircraft they own. The first hearing was held on Thursday. 

The lessor also told the Delhi Bench of NCLAT that NCLT denied an opportunity for lessors to put forth their case. 

On Friday, the lessor told NCLAT that the major portion of the hearing in NCLT took place on the interim moratorium. The NCLT order completely disregarded the claims of the lessors, it claimed.

Lessor SMBC told the bankruptcy appellate tribunal that it had already moved a request with the aviation regulator Directorate General of Civil Aviation (DGCA) for the deregistration of Go First's aircraft. 

It added that it also moved for the termination of the lease prior to the grant of the moratorium to the airline. 

However, the bankruptcy court did not allow lessors an opportunity to place these facts on record, during the NCLAT hearing. 

Lawyers appearing for SMBC Aviation Capital said that insolvency protection will not sort out the engine problems that the aircraft are facing. 

“The purpose of approaching NCLT to somehow hold on to assets that they don’t own… Go First cannot use the aircraft commercially after the lease is terminated, they will have to use it only to be redelivered to the lessor,” said Arun Kathpalia, who was appearing for the lessors. 

Besides SMBC, SFV Aircraft Holdings and GY Aviation submitted their pleas against the moratorium given to Go First.  

Lessor SFV Aircraft Holdings said before the NCLAT bench that the insolvency resolution professional cannot take charge of third-party assets under insolvency proceedings. “I am the owner of the asset, I am in possession of the aircraft, they can’t use it, enter it, or fly it,” it said, objecting to the moratorium granted to Go First, which restrains lessors from taking control of aircraft.  

 "They may tinker with our planes, may use parts from my planes to service other planes," the company said. 

The company added that DGCA has conveyed to the lessors that due to the moratorium placed by NCLT, the aircraft cannot be deregistered. 

Senior advocate Ritin Rai, appearing for the resolution professional Abhilash Lal, on Friday said the lessors should not have come in appeal, but should instead have filed an application in the NCLT. 

"Possession of aircraft is required to revive the company. If the lessors take away the aircraft nothing will survive for Go First," Rai told NCLAT.  

He added that over Rs 1,000 crore has to be repaid to the vendors, and IBC will help in repayment.

On Wednesday, NCLT granted bankruptcy protection to Go First, owned by the Wadia group, in the hope that the carrier can start flying again. The tribunal also placed a moratorium on lessors taking back their aircraft from Go First. This led to legal action by a number of the airline's lessors, including SMBC Aviation Capital.

Also read: Maruti Suzuki to invest $5.5 bn to double production capacity by 2030 

Also read: Supreme Court approves Supertech Resolution Plan, flats to be delivered in 2 years