New Delhi, October 13, 2023 – In a landmark ruling, the Delhi High Court has delivered a significant directive, ensuring access to essential documents for lessors in the case of the beleaguered airline, Go Air. This judicial decision stems from the lessors’ applications for urgent access to inspect vital aircraft documents. This development also raises pertinent issues regarding aviation regulations and financial matters, aligning with India’s legal landscape.

Access to Aircraft Documents Secured

Justice Tara Vitasta Ganju, presiding over the case, has ordered the resolution professional of Go Air to grant access to the documents related to the leased aircraft. This directive represents a pivotal step in facilitating a comprehensive inspection of aircraft records, which is vital for lessors in safeguarding their interests and ensuring transparency in their contractual arrangements.

Furthermore, the Delhi High Court has permitted the lessors to engage a “24-hour security service” for all the parked aircraft, which are currently stationed at various airports. This security service will be at the expense of the lessors themselves, underlining the court’s emphasis on protecting their assets.

The court has also directed the Directorate General of Civil Aviation (DGCA) to allow duly verified security personnel or agencies appointed by the lessors access to various airports in and around the country where the aircraft are currently grounded. This access is essential to monitor and safeguard the valuable assets.

Additionally, the court has made it clear that the resolution professional of Go Air must continue to maintain the aircraft, adhering to previously issued directives.

Lessor’s Quest for Document Access

The legal process that led to this ruling was set in motion by the lessors’ applications seeking urgent access to review all aircraft documents, including maintenance and storage preservation records. These applications were filed as part of petitions brought forward by the lessors, which sought the de-registration of aircraft that had been leased to Go Air.

The court had previously issued an interim order on July 5th, which granted the lessors permission to conduct inspections and interim maintenance activities on their aircraft twice a month until the final resolution of their petitions. However, the lessors returned to the court, seeking modifications to the interim order. They argued that the “superficial inspection” permitted by Go Air’s resolution professional was insufficient without access to the aircraft’s documents or records. This hindrance impacted their ability to conduct a comprehensive inspection and to ensure the proper upkeep of their valuable assets.

Preserving Valuable Assets

The Delhi High Court’s decision emphasizes the urgency of addressing the concerns raised by the lessors. It has been over five months since the grounding of the aircraft by the resolution professional of Go Air. A review of the documents and photographs submitted by the lessors revealed evidence of aircraft cannibalization. This situation necessitated the court’s intervention to safeguard these high-value assets during the pending legal proceedings.

Understanding the Legal Landscape

The lessors involved in these proceedings include various companies, such as Pembroke Aircraft Leasing 11 Limited, SMBC Aviation Capital Limited, Accipiter Investments Aircraft 2 Limited, EOS Aviation 12 (Ireland Limited), DAE SY 22 13 Ireland Designated Activity Company, SFV Aircraft Holdings Ire 9 DAC Limited, ACG Aircraft Leasing, and GY Aviation Lease 1722 Co Limited.

Their core contention revolved around the claim that Go Air had no legal right to utilize their aircraft. The leases pertaining to these aircraft had already been terminated. The respondents in the legal petitions included the Union of India and the Director General of Civil Aviation.

CIRP and the NCLAT’s Role

This legal imbroglio finds its roots in the initiation of the Corporate Insolvency Resolution Process (CIRP) against Go Airlines (India) Limited. The National Company Law Appellate Tribunal (NCLAT) upheld the decision issued by the National Company Law Tribunal (NCLT), which initiated the CIRP. It’s worth noting that Go First Airlines ceased operations on May 3.

The NCLAT had dismissed an appeal lodged by the lessors, challenging the NCLT’s decision to maintain possession of the leased aircraft with Go Airlines.

The contentious issue in this matter centers around the imposition of a moratorium on the leased aircraft. This decision was taken even though the lease agreements had been terminated before the initiation of the CIRP. Consequently, the NCLAT granted the Insolvency Resolution Professional (IRP) and the lessors the liberty to file applications before the NCLT, enabling them to address their claims related to the leased aircraft.

A Glimpse into Relevant Sections of the CPC

In the context of this case, several sections of the Civil Procedure Code (CPC) have played a crucial role in guiding the legal proceedings. Notable sections include:

Section 115– This section empowers the High Court to exercise its revisional jurisdiction over any subordinate courts decisions. In cases where a subordinate court has acted beyond its jurisdiction or has failed to exercise jurisdiction vested in it, the High Court can exercise its powers of revision.

Section 151 – This section provides the inherent powers of the court to make orders necessary for the ends of justice. These inherent powers allow the court to rectify any mistakes or omissions in its proceedings.

Order XLVII Rule 1 – This rule outlines the procedure for filing an application for review of a judgment or order. It enables a party to request a review of the courts decision on specific grounds, including errors apparent on the face of the record.

Section 142 – This section deals with the powers of the court to order security for costs. In cases where the plaintiff is a resident outside India or is a company or body corporate outside India, the court may require the plaintiff to provide security for the defendants costs.

The Delhi High Court’s recent ruling ensures that the lessors involved in the Go Air case have access to essential aircraft documents, a critical requirement for them to protect their interests and investments. This decision aligns with the broader framework of Indian law, emphasizing transparency and upholding contractual obligations. Additionally, the case underscores the role of the NCLAT and its role in resolving disputes related to the CIRP.

As the legal proceedings unfold, the adherence to the CPC and the High Court’s application of legal principles will continue to play a pivotal role in safeguarding the rights and interests of the parties involved, and ensuring the just and equitable resolution of the matter.

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