Delhi High Court warns Go First RP to allow lessors inspect aircraft

The Delhi High Court, on Friday, issued a stern warning to the Resolution Professional (RP) overseeing GoFirst’s insolvency proceedings. The warning came after a lessor reported that it was not granted permission to inspect aircraft. Both Division Bench of the High Court and the Supreme Court had previously upheld the lessors’ right to inspect aircraft. Meanwhile, the airline’s CEO, Kaushik Khona, has said that salaries are likely to be transferred this month.

Justice Tara Vitasta Ganju, presiding over the matter, expressed her dissatisfaction, and stated that she would not consider any submissions from the RP until the reasons for denying access to the lessors were clarified. She emphasised that “photographs speak for themselves”, suggesting that the evidence was clear.

Meanwhile, the National Company Law Tribunal (NCLT) also took action regarding Go First. The NCLT instructed the RP to submit a report on the maintenance of leased aircraft and engines. This directive followed a lessor’s claim that some components of their leased equipment were missing. The lessor conducted inspections both before and after the airline’s admission to insolvency, uncovering discrepancies in the equipment’s condition.

The lessor expressed concerns over potential substantial losses if the situation persisted, given the high value of the aircraft and engines, which amount to millions of dollars.

Salaries to be paid

In a separate development, Go First’s CEO, Kaushik Khona, addressed the airline’s employees during a town hall meeting. Khona assured the workforce that the airline would soon resume operations and pledged to disburse salary payments for the months of June, July and August, in September. Notably, the June salary had already been paid the previous month following an emergency funding injection of ₹100 crore from lenders. These funds were also allocated for insurance and statutory payments.

Khona conveyed his optimism regarding the ongoing legal disputes and clarified that there were no restrictions preventing the airline from resuming operations. He added that Pratt & Whitney had allocated engines for the airline, which would be delivered once operations recommenced.

The developments in the Go First matter reflect the challenges faced by the airline as it navigates insolvency proceedings, legal disputes with lessors, and the imperative to resume its operations in the near future.