Go First Airlines – India Legal https://www.indialegallive.com Your legal news destination! Fri, 26 Apr 2024 13:41:34 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.4 https://d2r2ijn7njrktv.cloudfront.net/IL/uploads/2020/12/16123527/cropped-IL_Logo-1-32x32.jpg Go First Airlines – India Legal https://www.indialegallive.com 32 32 183211854 Delhi High Court orders deregisteration of planes leased to Go First Airlines https://www.indialegallive.com/constitutional-law-news/courts-news/delhi-high-court-deregisteration-go-first-airlines/ https://www.indialegallive.com/constitutional-law-news/courts-news/delhi-high-court-deregisteration-go-first-airlines/#respond Fri, 26 Apr 2024 13:41:29 +0000 https://www.indialegallive.com/?p=336962 The Delhi High Court on Friday restrained Go First Airlines from flying the airplanes leased out by various companies, while also ordering the de-registration of the cash-strapped airline. The single-judge Bench of Justice Tara Vitasta Ganju asked the Directorate General of Civil Aviation (DGCA) to initiate the de-registration process within five working days. The Resolution […]]]>

The Delhi High Court on Friday restrained Go First Airlines from flying the airplanes leased out by various companies, while also ordering the de-registration of the cash-strapped airline.

The single-judge Bench of Justice Tara Vitasta Ganju asked the Directorate General of Civil Aviation (DGCA) to initiate the de-registration process within five working days.

The Resolution Professional (RP) of Go First was also restrained from replacing or taking out any accessories, spare parts, documents, or other material from the planes.

The High Court further directed the RP to provide up-to-date information and documentation in connection to the aircraft to the lessors.

The order was passed on 14 petitions filed by various companies who had leased their aircraft to Go First Airlines, which is currently undergoing insolvency.

The aircraft lessors had stated that they had filed applications for the de-registration of their aircraft, but the same were rejected by the DGCA.

The petitioners contended that the Insolvency and Bankruptcy Code (IBC) did not have relevant provisions for dealing with cases pertaining to de-registration and hence, even bankruptcy tribunals were not competent to hear their pleas.

Earlier on July 5, 2023, the High Court had passed an interim order, permitting the lessors to access the planes to carry out the maintenance work on them.

The High Court further allowed the lessors’ representatives to inspect the planes and restrained Go First and its Interim Resolution Professional (IRP) from removing any parts or documents from the planes in question.

Go First challenged the order before the Division Bench, which refused to disturb the single-judge’s directions, but modified one of the directions to the extent that the cash-strapped airlines can carry out maintenance of the aircraft, their engines, and other parts & components.

The airlines then moved the Supreme Court, which also dismissed its appeal on August 7.

Go First had last year moved the National Company Law Tribunal (NCLT) in Delhi to initiate the corporate insolvency resolution process under the IBC.

On May 10, the NCLT Delhi admitted the plea and declared a moratorium for the company. It also directed the company’s suspended board of directors to co-operate with the IRP to ensure there are no layoffs.

On May 22, the National Company Law Appellate Tribunal (NCLAT) upheld the decision to initiate insolvency proceedings.

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NCLT accepts Go First Airlines plea seeking insolvency proceedings, orders no sacking of employees https://www.indialegallive.com/top-story/nclt-go-first-airlines-insolvency/ Wed, 10 May 2023 08:28:23 +0000 https://www.indialegallive.com/?p=310505 NCLTThe National Company Law Tribunal (NCLT) on Wednesday admitted the application filed by Go First Airlines seeking initiation of voluntary insolvency proceedings, while directing the company’s suspended board of directors to ensure that none of its 7,000 employees were sacked by the airlines. The Principal Bench of NCLT at New Delhi, comprising its President Justice […]]]> NCLT

The National Company Law Tribunal (NCLT) on Wednesday admitted the application filed by Go First Airlines seeking initiation of voluntary insolvency proceedings, while directing the company’s suspended board of directors to ensure that none of its 7,000 employees were sacked by the airlines.

The Principal Bench of NCLT at New Delhi, comprising its President Justice Ramalingam Sudhakar and technical member L.N. Gupta, declared a full moratorium for the company.

It appointed Abhishek Lal, backed by Alvarez and Marsel, as the interim resolution professional (IRP) till the Committee of Creditors (CoC) appointed the resolution professional.

While putting the company under the protection of a moratorium, the Tribunal ordered the management to deposit Rs five crore for immediate expenses. It also directed the suspended board of directors to assist the IRP in running the company during insolvency proceedings.

The company had moved the NCLT earlier this month to initiate a corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC). This is the first time that an Indian airline has voluntarily sought bankruptcy protection to renegotiate its contracts and debts.

As per the application filed by Go First Airlines, due to faulty engines supplied by American company Pratt & Whitney (P&W), the grounding of its aircraft increased from 31 percent in 2020 to more than 50 percent in April 2023. The company claimed that this cost Go First a loss of over Rs 10,800 crore.

The petition filed by Advocate Pranjal Kishore contended that as on date, Go First has paid Rs 19,980 crore to its creditors. It added that a sum of Rs 11,463 crore was owed to its creditors, which included banks, financial institutions, vendors and aircraft lessors.

As per the plea, on April 28, 2023, the company had defaulted on payment of Rs 1,202 crore to its creditors and Rs 2,660 crore to the airport lessors.

Representing the airlines, Senior Advocate Neeraj Kishan Kaul sought for imposition of an interim moratorium to prevent lessors from taking possession of its 26 aircraft. 

The Senior Counsel submitted that if the company lost possession of its aircraft and the legal right to operate them, the continuance of its business would be at stake. This would impact the employment of 7,000 direct and 10,000 indirect employees as well as debt repayment to the creditors, he added.

Earlier on May 4, the Principal Bench had reserved its verdict on the plea after hearing the parties. Gor Airlines then approached the NCLT on May 7, seeking an urgent decision on its application asking for a temporary moratorium.

Senior Advocate P. Nagesh told the Tribunal that aircraft lessors had initiated steps with the Directorate General of Civil Aviation (DGCA) to take possession of their aircraft. 

The Directorate General of Civil Aviation (DGCA) had issued a showcause notice to the carrier owned by the Wadia group for their ‘failure to continue’ the operation of the service in a ‘safe, efficient and reliable manner,’ and directed it to immediately stop bookings and sale of tickets directly or indirectly till further orders.

The aviation regulator told Go First to submit its reply within 15 days of the receipt of this notice, based on which a decision on the continuation of its Air Operators Certificate (AOC) will be taken. The budget airline had earlier suspended sale of tickets till May 15 and cancelled flights till May 19.

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