Lessors cannot take possession of planes, rules appellate tribunal

In a significant development, the National Company Law Appellate Tribunal (NCLAT) upheld the order passed by the National Company Law Tribunal (NCLT) today, admitting the application filed by Go First Airlines to initiate voluntary insolvency proceedings. The decision dealt a blow to the lessors of Go First Airlines’ aircraft, as the NCLAT turned down their plea to take possession of the aircraft.

The lessors, including SMBC Aviation Capital Ltd, GY Aviation, and SFV Aircraft Holdings, had moved the NCLAT after the NCLT in Delhi accepted Go First Airlines’ application for insolvency proceedings. These lessors had leased out 21 aircraft to Go First Airlines.

During the hearing, the lessors informed the NCLAT that they had already approached the Directorate General of Civil Aviation (DGCA) to initiate deregistering and repossessing Go First’s aircraft. They argued that since the aircraft lease had terminated before the moratorium was granted, the moratorium should not impose a freeze on third-party assets.