Go First Airlines.
Credit: @X/GoFirstairways
The National Company Law Appellate Tribunal (NCLAT) on Friday allowed Engine Lease Finance BV to inspect their four engines leased to crisis-hit carrier Go First.
A two-member bench of the appellate tribunal granted relief to Engine Lease Finance (ELF) after modifying the earlier order of the National Company Law Tribunal (NCLT) on July 26.
NCLAT has directed the resolution professional of Go First, which is going through the corporate insolvency resolution process (CIRP), to allow the world's leading independent engine financing and leasing company to inspect the engines within 10 days of the order.
"We are of the view that inspection be permitted within 10 days from today," said an NCLAT bench comprising Chairperson Justice Ashok Bhushan and Barun Mitra.
During the proceedings, counsel for the resolution professional submitted that in view of the orders passed by the Delhi High Court, the inspection shall be allowed, and the date for carrying out the inspection shall be intimated to ELF as early as possible.
The NCLAT order came over a petition filed by ELF challenging the order of the Delhi bench, which on July 26 rejected the plea of lessors, saying it was the responsibility of the resolution professional to maintain them at the highest levels of efficiency/safety.
NCLAT had also rejected Go First lessors petitions to take back the planes leased to the grounded airline.
However, the appellate tribunal said: "We are of the view that the order of the Adjudicating Authority (NCLT) insofar as it refuses inspection to the appellant need not be approved".
NCLAT also suggested the NCLT to decide accordingly over the pleas filed by other lessors of Go First.
"We have no doubt that looking at the nature of the Application, the Adjudicating Authority shall endeavor to dispose of the Application as early as possible," it said.
Earlier in its order, NCLT on July 26 held that aircraft and its engines are the sole essence of Go First's business, and if taken away, it would result in its 'corporate death' leaving no scope for its resolution.
"The physical possession of the aircraft/engines is indisputably with the corporate debtor (Go First). Therefore, in terms of Section 14(1)(d), the applicants would not be within their rights to claim possession of these aircraft/engines," the NCLT had said in its 29-page order passed on the petitions filed by several lessors of Go First.
"The moratorium prohibits the recovery of the aircraft/engines by the lessors (applicants) from the corporate debtor," it added.
On May 10, NCLT admitted the plea of Go First to initiate voluntary insolvency resolution proceedings.