The Delhi High Court has issued a show cause notice to Shailendra Ajmera, the Ernst & Young partner and resolution professional overseeing the insolvency administration and sale of Go First (GOW, Mumbai International), asking why it should not initiate contempt proceedings against him. The court issued the notice on March 7, 2024, in response to an application by a DAE Capital special purpose vehicle (SPV) concerning Ajmera's alleged neglect of aircraft maintenance requirements and disregard of earlier court rulings.
The matter, DAE (SY 22) 13 Ireland Designated Activity Company v Go Airlines (India) Limited (case no: 1767/2023), revolved around claims Ajmera had wilfully neglected to carry out essential aircraft maintenance and had ignored previous court orders on the issue. Ten of Go First's fourteen lessors supported the DAE application.
After Go First suspended operations in May 2023, citing a cash-flow crisis, lessors moved to repossess their assets but were blocked by India's courts. All of Go First's aircraft are leases and ch-aviation has previously reported that lessors want each one back. With the aircraft grounded in India, the resolution professional, India's equivalent of an insolvency administrator, was responsible for maintaining them.
In July 2023, in response to lessor concerns, the Delhi High Court granted lessors access to the planes for inspection and maintenance purposes. However, the court later modified this to inspection access only.
In November, the DAE SPV initiated contempt proceedings, saying Ajmera had failed to heed court orders to hand over maintenance records. ch-aviation fleets data indicates DAE has two A320-200s placed with Go First, VT-WDA (msn 11052) and VT-WDD (msn 11160). Ajmera later advised the court that a lack of available cash made it impossible to pay maintenance costs.
In November, discussions began with several lessors who owned 23 of the 54 Go First aircraft about outsourcing maintenance to a third-party entity. In January, ch-aviation reported on the formation of an MRO entity called SP Mumbai Aviation LLP. At the time, the entity's CEO, a former general manager at Go First, told ch-aviation that the company would take care of maintenance requirements. However, to date, no contract has been signed, and India's Directorate General of Civil Aviation has yet to issue the required approvals. After a March 1 court hearing, Ajmera has reportedly agreed to hand back maintenance responsibilities to the lessors. However, the lessors, who have previously sought this, have to formally agree.
The matter returns to court on March 15 when Ajmera, among other things, will have to show cause why contempt proceedings should not start against him.
