 "Go First")
In a move that may further worsen Go First's chances of revival, the Directorate General of Civil Aviation (DGCA) has told the Delhi High Court that the airline's aircraft and engines can be returned to the lessors.
The regulator, in a filing, said that the amendment in the insolvency law that exempts aircraft objects from the ambit of the moratorium will be applicable retrospectively. The exemption under the Insolvency and Bankruptcy Code (IBC) came against the backdrop of various aircraft lessors launching legal battles to repossess planes leased to the grounded Go First, which stopped flying in early May and is undergoing an insolvency resolution process under the IBC.
On October 3, the corporate affairs ministry, through a notification, exempted aircraft objects registered in the international registry from the applicability of the moratorium under the IBC.
"It is submitted that the executive's notification is procedural and a necessary adjunct to a section in legislation, i.e., section 14(1) of IBC in this case, it needs to be given effect from the date on which the section comes into force," the filing read.
"As such, the above-mentioned notification was issued u/s 14(3) of the IBC 2016, and would have to be considered to have a retrospective effect," the aviation regulator said. However, DGCA said that since Go First's case is pending before the court, it "shall await the appropriate direction of this court before proceeding in the matter."
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"...the provisions of sub-section (1) of section 14 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), shall not apply to transactions, arrangements or agreements, under the Convention and the Protocol, relating to aircraft, aircraft engines, airframes and helicopters," as per the notification dated October 3.
Section 14 of the IBC deals with the power of adjudicating authority (NCLT) to issue a moratorium when admitting a company into the insolvency resolution process. According to a report by the Economic Times (ET), Jindal Power, which had shown its interest in the airline, may not go ahead with its financial bid.
(With agency inputs)
