New Delhi: Termination of leases for aircraft by their lessors would not have any consequence as the moratorium has been imposed under insolvency resolution proceedings, Wadia group air carrier Go First on Friday argued before the National Company Law Appellate Tribunal (NCLAT).
While aircraft lessors on the other side raised doubts over the revival of Go First through the corporate insolvency resolution process (CIRP), citing the amount required to make it fly again.
Senior advocate Arun Kathpalia representing SMBC Aviation said the average lease rent of per aircraft is around USD 2 lakh for a month and with more than 50 aircraft the monthly bill would be USD 10 million.
"Cost of this misadventure is enormous," he said.
For SMBC Aviation only, Go First has to pay USD 4.2 million per month, which includes maintenance and lease.
SMBC Aviation Capital Ltd submitted that they have legal possession of their aircraft before the insolvency process started and as of today, Go First has no right for possession of those planes.
Senior Advocate Maninder Singh, representing Go First, submitted that termination of the lease by SMBC Aviation is of no consequence as a moratorium is in place now.
"It (moratorium) would override every lesser due. Your termination is irrelevant," Singh submitted.
Citing the necessity over Go First's voluntary insolvency plea, Singh said its 28 aircraft were grounded due to engine issues with Pratt & Whitney.
"It was compelled to file section plea," he added.
The Wadia group firm has already got a favourable order in arbitration against the US-based jet engine manufacturer and Go First will receive 10 engines from Pratt & Whitney per month.
He hoped the situation will improve after this and Go First to come back again resuming it's services.
During the proceedings, Kathpalia also raised a question mark over the hearings at the National Company Law Tribunal (NCLT), which had earlier this week admitted the voluntary plea of Go First for initiation of insolvency proceedings.
"What kind of hearing has taken place? We were not even allowed to place a document for consideration and submit our pleadings," he said.
Two other lessors, G Y Aviation and SFV Aircraft Holdings, which had moved appellate tribunal on Thursday, also argued their case and opposed the CIRP against Go First.
All three lessors own around 21 aircraft, which were leased to crisis-hit Go First.
The matter remained part-heard and the appellate tribunal would continue its hearing on Monday.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)