Delhi HC directs DGCA to deregister all Go First aircraft

The Delhi High Court on Friday directed aviation watchdog Directorate General of Civil Aviation (DGCA) to process, within five working days, the deregistration applications for aircraft leased by grounded airline Go First, which is undergoing insolvency proceedings.

Justice Tara Vitasta Ganju also declined the resolution professional's plea to keep the order in abeyance for a week. As per the court's directive, the RP must provide updated maintenance details to the lessors and is barred from accessing the aircraft henceforth.

Further, the court rejected the DGCA's communications from May 2023, which had put lessors' deregistration applications on hold owing to Go First entering a moratorium.

Besides SpiceJet chairman and managing director Ajay Singh and Busy Bee Airways Private Ltd, Sky One, an aviation company headquartered in Sharjah, had also submitted the bid for GoFirst. However, bidding results are yet to be declared.

Following the court directions, Skyone chairman Jaideep Mirchandani claimed that as far as their bid for Go First is concerned, the de-registration does not alter their plans for the Indian aviation industry. "If our bid goes through, Sky One can bring in its own assets to run and revive the airline as we are experienced lessors,” he said.

Earlier, the high court had asked the RP of Go First to file an affidavit in response to a lessor's plea seeking contempt action, alleging that the RP had not complied with the court's order to allow inspection and maintenance of the aircraft.

In October last year, the court allowed aircraft lessors to engage security personnel round-the-clock to safeguard their aircraft parked at rest for several months. In an interim order on 5 July 2023, the court permitted the lessors to inspect their aircraft at least twice a month and carry out maintenance.

At the same time, justice Ganju asked Go First’s RP to share documents regarding the maintenance of aircraft, engines and airframes with its lessors. She had said court orders must be followed in letter and spirit, warning that further orders might be necessary if compliance was not achieved.

Lessor Ireland Designated Activity Company had filed a petition seeking contempt proceedings against the RP, claiming that the aircraft were not being properly maintained, required documents were not provided, and court-directed inspections were being denied. Several other lessors had also raised similar issues during the hearing.

On 26 May last year, aircraft lessors Pembroke Aircraft Leasing 11 Ltd, SMBC Aviation Capital Ltd, Accipiter Investments Aircraft 2 Ltd and EOS Aviation 12 (Ireland) Ltd had moved the high court seeking deregistration of their planes by the DGCA to take them back from the airline.

The low-cost airline first stopped flying on 3 May 2023. The airline had approached the National Company Law Tribunal "due to the ever-increasing number of failing engines supplied by Pratt & Whitney's International Aero Engines, which has resulted in Go First having to ground 25 aircraft (equivalent to approximately 50 per cent of its Airbus A320neo aircraft fleet) as of May 1, 2023".

On May 22, the National Company Law Appellate Tribunal upheld the NCLT's 10 May order for insolvency proceedings against Go First, marking a setback to efforts by its lessors to repossess their aircraft, and asked the lessors to file an appeal before the NCLT.

On lessors’ petitions citing the refusal of their pleas for deregistration of their aircraft, the DGCA had told the high court that it was due to a technical glitch on its portal that the applications of several aircraft lessors were shown as ‘rejected’. It had said it was not processing such requests after a moratorium on financial obligations and transfer of assets of the crisis-hit airline post insolvency resolution proceedings.

The lessors had said it was "illegitimate" of the DGCA to deny deregistration, contending that Go First had no right to use their aircraft as the leases concerning them had been terminated.