Gensol insolvency: NCLT admits Ireda's plea on ₹510 crore default

NCLT Ahmedabad admits two Gensol entities to insolvency proceedings under IBC on Ireda's plea, citing defaults totalling ₹729 crore; resolution professional to be appointed

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Gensol Engineering, which managed electric-car ride-hailing platform BluSmart, was admitted to the insolvency process on Friday following a plea by the Indian Renewable Energy Development Agency (Ireda). 

Ireda had moved the National Company Law Tribunal’s Ahmedabad Bench, citing a default of ₹510 crore. 

The matter was filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), which outlines the initiation of the Corporate Insolvency Resolution Process (CIRP) on a plea moved by a financial creditor or lender. 

A coram (“in the presence of”) of Judicial Member Shammi Khan and Technical Member Sanjeev Kumar, however, said they were not appointing the resolution professional suggested by Ireda. 

A resolution professional from the list given by the Insolvency and Bankruptcy Board of India would be appointed, they said.  Later in the day, the Bench also admitted Gensol EV Lease Ltd to the insolvency process on another Ireda plea, citing a default of ₹219 crore.

 

The Bench had reserved its judgment on June 11 after noting that Gensol had not objected to the demand raised for default.

The tribunal had on May 16 agreed to hear an insolvency plea moved by Ireda but refused the appointment of a resolution

professional at that stage, saying that Gensol Engineering must be heard first. 

Ireda’s lawyer had urged the tribunal to make an appointment to look after the company, saying Gensol was “headless” after its promoters allegedly were missing amid regulatory scrutiny. 

“By virtue of Sebi’s (Securities and Exchange Board of India) order, the company is now headless. Directors have walked out and the company has projects worth crores of rupees. Somebody needs to manage the show,” the lawyer told the Bench. 

The financial creditor also alleged a breakdown of internal controls and corporate governance norms at Gensol, accusing the promoters of running the listed firm as if it were their proprietary firm. 

“The simultaneous admission of insolvency proceedings and Sebi’s serious fraud findings against Gensol entities create a uniquely high-risk and high-stakes scenario for everyone involved. For creditors, this isn’t just a matter of recovering dues through the IBC, it’s about navigating a landscape clouded by allegations of fund diversion, inflated procurement, and governance failure, which may dilute asset value or delay resolution,” said Sonam Chandwani, managing partner, KS Legal & Associates.  BluSmart on April 16 had paused cab bookings in certain parts of Delhi-National Capital Region, Bengaluru, and Mumbai, the three cities where it operates.

 

The rides were halted a day after Sebi debarred the promoters and directors of Gensol Engineering — Anmol Singh Jaggi and Puneet Singh Jaggi — from accessing the securities markets allegedly for fraudulent practices and funds.

  The regulator had then restricted them from holding any key positions in a listed firm. 

The fine print

• The NCLT bench admitted the firm to insolvency
• It is not appointing the resolution professional
• suggested by Ireda
• A resolution professional from the list given by IBBI would instead be appointed
• The bench admitted Gensol EV Lease to the insolvency process on another Ireda plea, citing a default of Rs 219 cr
• It also alleged a complete breakdown of corporate governance norms at Gensol