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HC cannot interfere with resolution process of Go First: IRP tells court

Senior Advocate Harish Salve, appearing for the IRP, told the court that a writ court should not interfere in the resolution process after the insolvency application has been accepted by the Tribunal

Go First

Bhavini Mishra New Delhi

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The Interim Resolution Professional (IRP) of Go First on Tuesday told the Delhi High Court that parallel proceedings could not go in the case and that the court could not interfere in the resolution process.

Senior advocate Harish Salve, appearing for the IRP, told the court that a writ court (the high court in this case) should not interfere in the resolution process after the insolvency application had been accepted by the National Company Law Tribunal (NCLT).

He said there were many Supreme Court judgments that had said this.

“Courts should not interfere in the Insolvency and Bankruptcy Code (IBC) process because the essence of this process is that it is time-bound. Interests start piling up with every passing day on all dues,” Salve said.

He argued if the court were to release the aircraft in accordance with the lessors’ request, the airline would not be able to resume operations and thousands of employees would lose their jobs.

The NCLT, Delhi, on May 10 had accepted the voluntary insolvency application of Go First. The order was then upheld by the National Company Law Appellate Tribunal (NCLAT).

After the insolvency plea was accepted, a moratorium was in place, which meant suspending all or certain legal remedies against Go First. This meant lessors could not take back their aircraft in possession of the cash-strapped airline.

The lessors of Go First had moved the high court against the Directorate General of Civil Aviation (DGCA), seeking to deregister their aircraft leased to Go First. This was shortly after the NCLAT upheld the NCLT order on May 22.

The petitions were filed by Pembroke Aircraft Leasing 11 Limited, Accipiter Investments Aircraft 2 Limited, EOS Aviation 12 (Ireland) Limited, and SMBC Aviation Capital Limited. All of them have been clubbed together for hearing.

Salve told the high court that if the lessors wanted to appeal against the NCLAT decision, they should have gone to the Supreme Court. Moreover, if they wanted relief in terms of deregistration of their aircraft or other remedies (an application of malicious intent against Go First), they could have approached the NCLT as the NCLAT order had directed, he added.

The DGCA had told the high court earlier it had not rejected the application of Go First’s lessors for deregistering the aircraft but had kept the process (of deregistration) in abeyance because of the moratorium.

The lessors had told the NCLAT they had sought deregistering Go First’s aircraft before the insolvency plea was admitted. In reply to this, Go First argued the lessors had hastily applied for deregistration as soon as they got wind of the fact that the airline was filing for insolvency.

The lessors argued that, according to the Irrevocable De-registration and Export Request Authorisations (IDERA), it was mandatory for the DGCA to deregister the aircraft upon their request.

The court will continue hearing the arguments in the case on May 31.

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First Published: May 30 2023 | 9:19 PM IST

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