The ministry of corporate affairs (MCA) on Wednesday notified that some provisions of the Insolvency and Bankruptcy Code (IBC) would not apply to aircraft, engines and related parts, in a development that will significantly influence the ability of bankrupt Go First airline to take to the skies again.
In a 3 October notification, the ministry declared that the provisions of Section 14(1) of IBC, which imposes a moratorium upon the admission of an insolvency plea, shall not apply to transactions, arrangements, or agreements related to aircraft, aircraft engines, airframes, and helicopters. The moratorium prohibits the transfer of any assets by a corporate debtor and bars recovery of any property by an owner or lessor where such property is occupied by or in the possession of the debtor.
Lawyers said the new provision could prompt aircraft lessors to exercise their right to reclaim leased planes, affecting the grounded airline's revival plan, which hinges on aircraft availability.
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