The government is considering issuing a directive to clarify whether Go First lessors can reclaim their planes and engines following recent changes in the Insolvency and Bankruptcy Code (IBC), as per the Ministry of Corporate Affairs. The government’s counsel informed the Delhi High Court of this during proceedings. Legal opinions on the matter have been accompanied by various disclaimers, leading to the need for a clear resolution through an executive direction.
The resolution professional (RP) responsible for overseeing Go First’s insolvency argued that the changes in the IBC are a notification and not an amendment. The RP suggested that the Delhi High Court is not the appropriate forum for lessors to address these changes. Instead, they should approach the National Company Law Tribunal (NCLT) to determine whether the moratorium order issued on 10 May still applies following the new notification. The lessors have asserted that they can repossess their aircraft from Go First due to the new notification’s replacement of the moratorium.
The new directive announced on 3 October specify that Section 14(1) of the IBC, which imposes a moratorium on insolvency proceedings, no longer applies to transactions, arrangements, or agreements concerning aircraft, aircraft engines, airframes, and helicopters. Go First’s lessors are leveraging this amendment in tribunals and courts to reclaim their assets from the airline. However, delays could occur due to changes in the composition of the NCLT bench handling the case.
In a related matter, the same single bench of the High Court directed Go First’s Resolution Professional to provide essential aircraft documents to its lessors within seven days. These documents include records of engine parts removal, airframe details, storage information, historical data, online records, and any documents related to the airworthiness of the aircraft.
The court also allowed lessors to maintain 24-hour security services to protect their aircraft at their own expense, citing evidence of “cannibalization” of the aircraft.
An interim order in July allowed lessors to inspect the grounded planes, a decision that was upheld by a division bench of the High Court and later by the Supreme Court.
Jindal Power, owned by billionaire Naveen Jindal, has expressed interest in Go First. However, this bid is primarily aimed at exploring the potential of the company and the industry, and it may not necessarily result in an acquisition of the grounded airline.