The Ministry of Corporate Affairs October 3 notification exempting leased aircraft and engines from moratorium under the provisions of the Insolvency and Bankruptcy Code (IBC) will have retrospective effect, the central government has clarified.
This will pave the way for the deregistration of Go First aircraft and will spell trouble for the airline’s revival.
The clarification came in the form of a Directorate General of Civil Aviation affidavit in the Delhi High Court, which is hearing aircraft lessors’ plea for repossession of Go First planes.
The DGCA has submitted that the October 3 notification is a procedural and necessary adjunct to section 14 (1) of the IBC and thus needs to be given effect from the date the section came into force. As such, the notification would have to be considered to have a retrospective effect, being clarificatory .
Ravi Nath, managing partner of RNC Legal, said lessors plan to make fresh applications for deregistration of Go First planes armed with this clarification. However, repossession will have to wait until the High Court issues an order, lawyers said. The matter will come up for a hearing on Friday.
During the last hearing advocates appearing for the airline and its resolution professional said that they wished to address the merits of the matter and urged the court to hear them since lessors have been heard on merits over a month.