Go First's engine lessors tell NCLT moratorium doesn’t apply; RP claims leases terminated post insolvency filing
Go First, on Tuesday, told the National Company Law Tribunal that their assets were not covered under moratorium, as they had terminated their leases before the airline was admitted for insolvency.
Go First's engine lessors argued that even in the reply filed by Go First’s resolution professional, no questions were raised on the grounds of termination and the legal possession of engines should be given back to lessors.
The senior counsel, representing Go First’s RP, in turn, noted that the fundamental question to answer was why the lease agreements were terminated one or two days after the petition of voluntary insolvency under Section 10 of the Insolvency and Bankruptcy Code, 2016, was filed by the airline.
The termination was “on the grounds of insolvency, but not on the grounds of payments,” he further stated, pointing out that if the airline had failed to pay dues, then why was termination initiated two or three days after the filing of Section 10 petition.
The Wadia group-owned airline had filed for voluntary insolvency on May 2, which was admitted on May 10, placing a moratorium on assets.
The NCLT heard the arguments of two engine lessors, who are not party to the cases going on in the High.
SMBC Aero Engine Lease BV, which had leased five engines to the beleaguered airline, informed the tribunal that once the default occurred, a lease payment deferral agreement was signed in December 2020.
The lessor sent a demand notice on March 17, 2023, whereas the termination was done on May 4, six days before the company was admitted to insolvency.
The other engine lessor, Engine Lease Finance BV, also argued on similar grounds with respect to four of its engines leased to the airline.
The counsel for engine lessor ELFBV
