Business

Government: IBC Not Applicable To Transactions Involving Aircraft, Engines, Airframes, And Helicopters

The government has announced that transactions involving aircraft, plane engines, airframes, and helicopters are now exempt from the Insolvency and Bankruptcy (IBC) code.

According to a notification issued by the Ministry of Corporate Affairs, the provisions of sub-section (1) of section 14 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), shall not apply to transactions, arrangements, or agreements, under the Convention and the Protocol, relating to aircraft, aircraft engines, airframes, and helicopters.

Section 14 of the IBC addresses the adjudicating authority (NCLT) jurisdiction to issue a moratorium when admitting a company to the insolvency resolution procedure.

When an asset transactions moratorium is imposed, activities such as instituting suits, continuing pending suits, executing judgments, transferring/ disposing of assets, and recovering or enforcing security interest are prohibited.

The news comes while grounded carrier Go First is undertaking voluntary insolvency proceedings and battling its aircraft lessors in court.

With the most recent notification, lessors will be allowed to reclaim their aircraft from a defaulting airline in the future.

If the amendment is adopted retroactively, it may have an impact on Go First.

Last week, the Aviation Working Group (AWG) downgraded India’s compliance with international law governing aircraft leasing, citing lessors’ continuing efforts to reclaim jets leased to the now-grounded Go First.

The AWG is a not-for-profit legal company made up of major aviation manufacturers, leasing companies, and financial institutions.

Lessors can reclaim custody of aircraft leased to airlines under the Cape Town Convention (CTC).

India is a signatory to CTC but has yet to ratify it.

A moratorium is in force while Go First is pursuing insolvency resolution, and lessors are embroiled in a legal battle with Go First to reclaim the leased planes.

AWS stated in an update that CTC remedies have not been made available to lessors nor have lessors been able to access aircraft to ensure that their aircraft are being maintained in accordance with the leases as required by CTC.

Also read: PMI: India’s Services Sector Activity Reaches A 13-Year High In September Thanks To Robust Demand

Spriha Rai

Recent Posts

Jamia Students Back Waqf Amendment Bill; Call It A Step Toward Empowerment

The student group 'Shaher-E-Arzoo' expressed firm support for the Waqf Amendment Bill, calling it a…

1 hour ago

India’s Exports To The US Face Limited Impact From Tariff Hike: SBI Report

The 27% tariff hike by US President Donald Trump on Indian goods will have only…

1 hour ago

Waqf Freed From Mafia Control, New Era Of Development Begins For Muslims: MRM

Following the passage of the Waqf Amendment Bill 2024 in both Houses of Parliament, celebrations…

2 hours ago

India’s Forex Reserves Surge To $665.4 Billion; Rupee Strengthens As Trade Deficit Narrows

India’s forex reserves jumped $6.6 billion to a five-month high of $665.4 billion for the…

3 hours ago

Laxmi Singh Leads Gautam Buddha Nagar Police To Historic No 1 Rank In IGRS Across All Stations

Gautam Buddha Nagar Police, led by CP Laxmi Singh, achieved a historic feat with all…

4 hours ago

Avoid Rhetoric That Vitiates Atmosphere, Ensure Safety Of Hindus In Bangladesh: PM Modi Tells Yunus

Prime Minister Narendra Modi called on Bangladesh to bring perpetrators of atrocities against Hindus and…

4 hours ago