NCLAT defers verdict on appeal against Go First insolvency; to hear lessor's plea on May 22

The National Company Law Appellate Tribunal (NCLAT) has deferred the matter pertaining to Go First lessors’ petition seeking a stay on a bankruptcy court order allowing voluntary insolvency of the low-cost airline to May 22, according to reports.

A bench led by Justices Ashok Bhushan and Barun Mitra will take up the petition filed by SMBC Aviation Capital, one of the lessors of Go Air, seeking a stay on the bankruptcy court’s order. Go First's lessors also include CDB Aviation's GY Aviation Leasing.

Also Read: Go First's lessors also include SMBC Aviation Capital and CDB Aviation's GY Aviation Leasing

SFV Aircraft Holdings, another lessor, argued that the Director General of Civil Aviation (DGCA) has told the lessors that the aircraft cannot be deregistered owing to the moratorium.

Essentially, the Delhi bench of the National Company Law Tribunal (NCLT) earlier allowed a petition filed by Go First seeking the initiation of voluntary insolvency proceedings and imposition of an interim moratorium under the Insolvency and Bankruptcy Code (IBC).

NCLT order also prohibited initiating suits or continuation of pending suits or proceedings against the airline, including the execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority. 

This came after the Wadia-group-owned airline was granted bankruptcy protection by NCLT earlier this month, bolstering the country's fourth largest carrier's chances of getting back on its feet, but lessors have started mounting legal challenges to repossess planes.

The low-cost airline filed for bankruptcy citing that it plunged into a financial crisis after it had to grounded about half of its fleet due "faulty" Pratt & Whitney engines. Meanwhile, the US engine maker in its statement said Go First's allegations were "without merit".

Currently, the ultra-low-cost airline has liabilities worth around ₹11,000 crore.