Background 

In the case of SMBC Aviation Capital Ltd v Interim Resolution Professional of Go Airlines Go First Airlines‘ aircraft lessors have filed a claim to seize the aircraft. By the Insolvency and Bankruptcy Code (IBC), Go Airlines requested the NCLT to begin the corporate insolvency resolution procedure. It claimed that the number of its aircraft grounded climbed from 31% in 2020 to more than 50% in April 2023 as a result of defective engines provided by the American corporation Pratt & Whitney (P&W). They stated that the company suffered a loss of over Rs. 10,800 crore as a result.

Tribunal Observation 

The National Company Law Appellate Tribunal (NCLAT) upheld a decision made by the National Company Law Tribunal (NCLT), which had accepted Go First Airlines’ application for the opening of voluntary insolvency proceedings. The NCLT’s decision was upheld in a coram of Justice Ashok Bhushan, the chairperson, and Member (Technical) Barun Mitra. However, the NCLAT instructed the appellants to contact the adjudicating body if they needed any additional relief.

The Appellant and IRP (Interim Resolution Professional) are free to submit the proper application to the adjudicating authority for a declaration regarding the applicability of the moratorium on the aircraft concerning which Leases in favour of the Corporate Applicant were terminated before admission of Section 10 Application. This application must be considered and decided by the adjudicating authority by the rules, according to the tribunal. The Appellant(s) and the IRP are also free to submit a suitable application under Section 60, subsection (5) about their respective claims of possession and other claims about the aircraft, it was stated.

On May 10, the NCLT Delhi accepted the application and imposed a complete freeze on the corporation. Additionally, it instructed the suspended board of directors of the corporation to work with the IRP to prevent layoffs.