Go First case: The government may explain the impact of leased aircraft's IBC changes

 Go First case: The government may explain the impact of leased aircraft's IBC changes

Following recent changes to the Insolvency and Bankruptcy Code (IBC) by the Ministry of Corporate Affairs, the Centre is likely to clarify whether lessors of Go First airline may acquire their aircraft and engines, the Indian government's attorney informed the Delhi high court on Thursday.

The most current IBC amendments, dated 3 October, declare that dealings involving aircraft, engines, airframes, or helicopters are not covered by Section 14(1), which imposes a moratorium on insolvency proceedings. The lessors of Go First are now entitled to argue in tribunals and courts for the restitution of their assets thanks to this change. However, there could be a delay since the National Company Law Tribunal (NCLT) bench in charge of the case has changed.

The government has been urged to issue a "executive direction," according to additional solicitor general Chetan Sharma, since the legal analysis of the situation included several disclaimers that created confusion.

According to Go First's Resolution Professional (RP), the revisions are only a notice and not a legal alteration. The RP further recommended that lessors approach the NCLT for clarifications rather than the Delhi High Court. 

The lessors insisted that they were permitted to keep their aircraft by the most recent notice.

The high court had ordered Go First's RP to provide important aircraft documentation to lessors within a week on October 12. Due to evidence of possible abuse of the aircraft, the court additionally gave lessors permission to retain 24-hour security services for their aircraft at their own cost.

The Supreme Court later affirmed the high court's earlier this year judgment allowing lessors to examine the grounded aircraft.

Separately, the troubled airline has drawn early interest from Naveen Jindal's billionaire company, Jindal Power.

Go First filed into bankruptcy in May as a result of financial difficulties brought on by Pratt & Whitney engine problems. The NCLT granted its request on May 10, which resulted in the suspension of the airline's board.