GoAir resolution professional's merger defense rejected, lessors granted aircraft access and security arrangements within fourteen days Delhi HC rejected the doctrine of merger defense raised by GoAir's resolution professional, ruling that merger applies only when superior courts examine ...
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GoAir resolution professional's merger defense rejected, lessors granted aircraft access and security arrangements within fourteen days
Delhi HC rejected the doctrine of merger defense raised by GoAir's resolution professional, ruling that merger applies only when superior courts examine issues on merits. The court found prima facie evidence of aircraft cannibalization after five months of grounding and granted lessors access to aircraft documents, records, and maintenance files within fourteen days. The court also permitted lessors to arrange 24-hour security services at their expense to protect the valuable aircraft equipment during case pendency.
Issues Involved: 1. Modification of the interim 05.07.2023 Order. 2. Urgent directions for full and proper access to and inspection of all Aircraft documents and records.
Summary:
Issue 1: Modification of the interim 05.07.2023 Order The Petitioners/Lessors filed applications seeking modification of the interim 05.07.2023 Order and urgent directions for inspection of Aircraft documents and records. The 05.07.2023 Order allowed the Petitioners to inspect their Aircraft and carry out maintenance tasks. The Division Bench (DB) Order dated 12.07.2023 modified this by permitting GoAir, through RP, to carry out all maintenance tasks with due permissions, while allowing Lessors to conduct monthly inspections. The Supreme Court dismissed a challenge to the DB Order, directing that jurisdictional issues be addressed before the High Court.
Issue 2: Urgent Directions for Inspection of Aircraft Documents The Petitioners/Lessors argued that the inspection of Aircraft should include the inspection of records and documents as defined in the Lease Agreements. They contended that without access to these documents, the inspection would be ineffective. The Respondent/RP of GoAir opposed this, citing that the 05.07.2023 Order did not mandate providing Aircraft documents and that the DB Order had attained finality. The Respondent also argued that obtaining these documents would be onerous and time-consuming.
The Court noted that the term "Aircraft" in the Lease Agreements includes Aircraft Documents, making it necessary for a meaningful inspection. The Court found evidence of cannibalization of Aircraft parts and emphasized the need to protect these valuable assets. The Court dismissed the objection regarding the doctrine of merger, stating it does not apply universally and is only relevant when an Appellate Court examines issues on merits. The Court also rejected the forum shopping allegation, noting that similar prayers before the NCLT were not pressed by the Petitioners/Lessors.
Court's Directions: 1. Provision of Documentation: The Respondent/RP of GoAir must provide access to records related to the removal of parts, storage, historical records, updated technical records, and any other documents necessary to ascertain the airworthiness of the Aircraft within fourteen days. 2. Security Services: Petitioners/Lessors are permitted to contract 24-hour security services for the Aircraft at their own expense, with DGCA facilitating access. 3. Maintenance: The Respondent/RP of GoAir must continue to maintain the Aircraft as previously directed.
These directions apply to all 54 Aircraft involved in the petitions, and the applications seeking modification of the 05.07.2023 Order were accordingly closed.
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