Go First insolvency: 'IRP is claiming aircraft that Go First doesn't own,' says lessor SMBC Aviation at NCLAT hearing

Go First crisis: SMBC Aviation Capital, which is one of the aircraft lessors of crisis-hit Go First, in its petition to the National Company Law Appellate Tribunal (NCLAT) said on Thursday that the embattled carrier initiated the insolvency proceedings at the tribunal to confuse issues and defeat lessors' rights over the aircraft they own. It added that the newly appointed IRP is claiming aircraft that GoFirst does not own.

On Wednesday, NCLT granted bankruptcy protection to the low-cost airline owned by the Wadia group, in the hope that the carrier can start flying again. But lessors have started mounting legal challenges to repossess aircraft.

The tribunal also placed a moratorium on lessors taking back their aircraft from Go First. This led to legal action by a number of the airline's lessors, including SMBC Aviation Capital.

SMBC Aviation Capital on Thursday moved NCLAT challenging the insolvency order. The lessor told the Delhi Bench of NCLAT that NCLT denied an opportunity for lessors to put forth their case.

SMBC added that Go First’s leases were terminated before NCLT granted a moratorium and that the lessor has resumed possession of aircraft and applied to DGCA.

The NCLAT will hear the matter again on May 12.

The low-cost airline filed for bankruptcy on May 2 citing that it plunged into a financial crisis after it had to ground about half of its fleet due to "faulty" Pratt & Whitney engines.

SMBC Aviation Capital, along with other lessors such as Narmada Aviation Leasing, Yamuna Aviation Leasing, GAL MSN, and GY Aviation Lease, had opposed Go First’s voluntary insolvency plea in the NCLT hearing last week.

SMBC Aviation Capital, formerly RBS Aviation Capital, is one of the largest aircraft leasing companies in the world.

Appearing for the aircraft lessors, senior advocate Arun Kathpalia on May 4 argued that the interim moratorium was not an option under insolvency law. He said the airline was asking the tribunal to pass orders that would affect entities whose side of the case had not been heard.

He urged the NCLT to permit the lessors to file a statement of objections to Go First's plea. He argued that a moratorium would only increase the cost for the airline as it would have to pay charges for aircraft without utilising it.

On May 8, Go First approached the tribunal to urgently pass an order on its insolvency plea, claiming that aircraft lessors’ are pushing hard to take back planes.

Go First’s lawyers told the NCLT that lessors had moved to reclaim the planes even as the bankruptcy proceedings were ongoing.

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