Delhi HC issues show-cause notice to Go First airline's resolution professional for non-maintenance of aircraft

New Delhi: The Delhi High Court has issued a show-cause notice to the resolution professional of crisis-hit 'Go First' airline, asking why contempt proceedings should not be initiated against him for prima facie willfully disobeying judicial orders on allowing inspection and maintenance of the lessors' aircraft.

The high court said the RP (Resolution Professional) cannot plead difficulties in the implementation of the October 12, 2023, judgment after contempt proceedings have been filed by a lessor seeking to enforce court orders.

"Prima facie, the orders of this court have been wilfully disobeyed by the respondent/ RP. Issue notice to show cause as to why proceedings of contempt be not initiated...," Justice Tara Vitasta Ganju said.

The counsel for the RP submitted that he was willing to revert to the position regarding the maintenance of the aircraft. The court listed the matter for further hearing on March 15.

It was hearing a petition filed by one of the lessors – DAE (SY22) 13 Ireland Designated Activity Company – seeking the initiation of contempt proceedings against the RP for not complying with the court's orders.

The plea said aircraft were not being maintained by the RP, documents needed were not being provided to them and even inspections, as directed by the court, were not being allowed.

Several other lessors have also raised similar issues and contentions regarding the non-compliance of orders passed by the court from time to time.

The court is seized of several petitions by Go First's lessors seeking the deregistration of their planes by aviation regulator DGCA so they could take them back from the airline.

It was argued by the contempt petitioner that the RP wilfully failed to undertake regular maintenance and monthly inspections of aircraft and to provide aircraft records and documents.

On the other hand, the RP submitted that there was no wilful disobedience of court orders and that he was taking steps to effectuate such compliance.

After examining the affidavits filed by the parties, the court said, "It was clear that the RP was unable to undertake regular maintenance of aircraft. The directions; (a) to provide access and the inspection of all the aircraft records and documents; (b) monthly inspection of the aircraft from August/ September 2023 onwards; and, (c) carrying out the maintenance and obligation with respect to the aircraft in accordance with the guidelines as specified are not being adhered to by the RP. Thus, clearly, the court orders are not being complied with, by the RP."

The high court had on October 12, 2023, permitted the lessors to engage security personnel round-the-clock to protect their aircraft lying idle for several months.

It had also asked the RP to share documents related to the maintenance of aircraft, engines and airframes with its lessors.

It had passed an interim order on multiple applications by several lessors seeking maintenance of their aircraft.

The court had also restrained Go First and its representatives, and the RP appointed by the National Company Law Tribunal (NCLT) from removing, replacing or taking out any part or components, or records of the 30 aircrafts, excepting with prior written approval of the lessor of a particular airplane.

Earlier, the NCLT-appointed RP, tasked with managing Go First, had told the high court that returning aircraft to the lessors would render the airline, which has 7,000 employees to look after, 'dead'.

On May 10, 2023, the NCLT admitted the airline's voluntary insolvency resolution petition and appointed Abhilash Lal as the interim RP to manage the carrier.

With a moratorium in force on financial obligations and transfer of assets of Go First in the wake of the insolvency resolution proceedings, the lessors are unable to deregister and take back the aircraft leased to the carrier.

The lessors had earlier told the high court that the denial of deregistration by the Directorate General of Civil Aviation (DGCA) was 'illegitimate'.

The lessors who have approached the high court are Accipiter Investments Aircraft 2 Limited, EOS Aviation 12 (Ireland) Limited, Pembroke Aircraft Leasing 11 Limited, SMBC Aviation Capital Limited, SFV Aircraft Holdings IRE 9 DAC Ltd, ACG Aircraft Leasing Ireland Ltd, DAE SY 22 13 Ireland Designated Activity Company and BOC Aviation (Ireland) Ltd.

Besides, GY Aviation Lease 1722 Co Ltd, Jackson Square Aviation Ireland Ltd, Sky High XCV Leasing Company Ltd, Star Rising Aviation 13 Ltd, Bluesky 31 Leasing Company Ltd and Bluesky 19 Leasing Company Ltd have also approached the high court.

On May 22, 2023, the NCLAT upheld the order of the Delhi-based principal bench of NCLT, which had admitted the plea of Go First to initiate voluntary insolvency resolution proceedings, and appointed an interim RP to suspend the company's board.

Several lessors approached the aviation regulator for deregistration and repossession of 45 planes they had leased to the carrier. Go First has stopped flying since May 3, 2023.