New Delhi: Go First on Friday opposed the Directorate General of Civil Aviation’s (DGCA) view that the government’s order exempting leased aircraft from the Insolvency and Bankruptcy (IBC) process will be applicable retrospectively.
The lawyer representing Go First said in the Delhi High Court that IBC does not contain retroactive provisions or specify exemptions during a moratorium. As per the resolution professional’s lawyer, most of the provisions of statutes are generally proactive. Therefore, a clarification issued by the DGCA, when the law does not explicitly mention it, does not hold merit.
DGCA had on Wednesday clarified, as part of a writ petition proceedings, that it views the latest changes made by the ministry of corporate affairs on 3 October with respect to the recovery of aircraft during insolvency as retrospective in nature.
The court adjourned the hearing and will hear the matter next on 10 November.
During the proceedings, lessors urged the court to immediately issue an order for the deregistration of the aircraft, citing that the DGCA’s clarification seemed to nullify the case.
They pleaded that their writ petition is against the DGCA, not the RP, seeking deregistration due to the moratorium, which the DGCA clarified. They urged the court to rule in their favour without delay. In response, senior counsel Neeraj Kishan Kaul, representing the RP, opposed this sudden request.
He argued that the court had heard the lessors for the past two months and now they seek an immediate decision without hearing the RP’s side. Kaul reiterated the RP’s position, stating that the Delhi High Court does not hold the authority to decide on the applicability of the moratorium, as the National Company Law Tribunal (NCLT) is the appropriate forum. Kaul argued that various forums being approached by the lessors are attempting to circumvent the entire Corporate Insolvency Resolution Process (CIRP).
According to RP, the insolvency proceedings aim to revive the airline. They pointed out that aircraft are pivotal assets for the airline, and stripping them of these assets would lead to the company’s collapse.
In a 3 October notification, the government declared that the provisions of Section 14(1) of IBC, which imposes a moratorium upon the admission of an insolvency plea, shall not apply to transactions, arrangements, or agreements related to aircraft, aircraft engines, airframes, and helicopters.
Go First’s lessors are leveraging this amendment to their advantage in tribunals and courts to repossess their assets from the airline. Nevertheless, delays may occur due to changes in the composition of the NCLT bench handling the case.
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
Download The Mint News App to get Daily Market Updates & Live Business News.
Updated: 03 Nov 2023, 06:41 PM IST