The Delhi High Court on Friday ordered the Director General of Civil Aviation (DGCA) to process de-registration of grounded airline Go First’s entire fleet of 54 aircraft sought by various lessors within five days and facilitate their export from India.
The High Court set aside the letters of communication issued by the DGCA to various lessors in May last year where it put into abeyance their de-registration applications. This followed the National Company Law Tribunal’s (NCLT) decision on May 10 to admit Go First’s plea for voluntary insolvency and consequential moratorium prohibiting adverse actions by its lessors and debtors. Following this, 14 lessors moved the Delhi High Court.
The Delhi HC also instructed the DGCA to facilitate export of aircraft from India and provide export certificates along with other documents. It also authorised the lessor petitioners to undertake maintenance of the grounded aircraft till their de-registration and export, while restraining the resolution professional (RP) appointed by the NCLT from entering the aircraft and removing its parts and documents. Lessors have also been permitted to inspect their aircraft with the court ordering the DGCA and the Airports Authority of India to facilitate this.
Earlier this month, the NCLT granted an extension for completion of the resolution process till June 4. This was the third extension since November when the 180-day timeline for completion of the resolution process under the Insolvency and Bankruptcy Code (IBC) expired. The maximum time of 330 days allowed under IBC, including any extension or litigation period, failing which a corporate debtor is sent for liquidation also expired on April 4. The next NCLT hearing on the resolution process is on May 13.
The RP has received two bids for Go First. This includes a joint bid from SpiceJet CMD Ajay Singh and Ease My Trip Co-Founder Nishant Pitti-led Busy Bee Airways. Another bid is from Sky One, an aviation firm headquartered in Sharjah, UAE, led by Jaideep Mirchandani.
“The de-registration does not alter our plans for the Indian aviation industry. If our bid goes through, Sky One can bring in its own assets to revive the airline as we are experienced lessors,” said Mr. Mirchandani responding to the HC judgment. Mr. Pitti said they will evaluate necessary adjustment to their offer for Go First.
“In my opinion, the HC judgment will not affect the resolution process as the successful resolution applicant would have had to negotiate agreements with the lessors anyway. Also, the true value in the airline is not in the leased aircraft but its slots, traffic rights and employees, hence none of us could understand the unnecessarily hard battle fought by the Resolution Professional,” said Nitin Sarin, Managing Partner, Sarin & Co, which represented some of the lessors.
