Gensol Insolvency: NCLT Admits IREDA’s Plea On INR 510 Cr Default

SUMMARY

NCLT Ahmedabad bench has admitted an insolvency plea filed by IREDA against Gensol Engineering over a INR 510 Cr default

The tribunal reserved its judgment on IREDA’s plea, stating that Gensol had not raised any defence disputing the existence of the debt

IREDA approached the Delhi debt recovery tribunal last month to recover a default amount of INR 729 Cr

The National Company Law Tribunal’s Ahmedabad bench has reportedly admitted Gensol Engineering Limited into corporate insolvency proceedings on a plea filed by Indian Renewable Development Agency (IREDA), which cited a loan default of INR 510 Cr.

“The insolvency plea is admitted. However we are not appointing the RP (resolution professional) suggested by IREDA, we have chosen from the list given by IBBI (Insolvency and Bankruptcy Board of India),” a Bar and Bench report said, citing the bench of Shammi Khan (judicial member) and Sanjeev Kumar Sharma (technical member).

The tribunal reserved its judgment in a hearing on the IREDA’s plea on Wednesday (June 11), stating that Gensol had not raised any defence disputing the existence of the debt.

While, IREDA was represented by senior advocate Navin Pahwa, with a team from Shardul Amarchand Mangaldas, Gensol was represented by senior advocate Devang Nanawati and advocate Vijaykumar Singh.

This follows IREDA filing an insolvency petition against BluSmart’s related entity and troubled engineering, procurement and construction (EPC) company Gensol Engineering last month.

IREDA said that it has initiated insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC) over a default of INR 510 Cr by Gensol.

In April, IREDA also approached the Delhi debt recovery tribunal (DRT) to recover about INR 729 Cr from the troubled company.

“… this is to inform you that the company has filed an Original Application under Section 19 of The Recovery of Debts and Bankruptcy Act, 1993 before Hon’ble Debt Recovery Tribunal Delhi on 20.05.2025 for a default amount of INR 510 Cr and Rs. 218.95 Cr against M/s Gensol Engineering Limited and M/s Gensol EV Lease Pvt Limited respectively,” IREDA had said in an exchange filing.

Notably, Gensol borrowed INR 977.75 Cr from IREDA and Power Finance Corporation (PFC) between FY22 and FY24. Out of this, proceeds to the tune of INR 663.89 Cr were supposed to go towards buying 6,400 EVs to be leased to Gensol Engineering related entity and BluSmart.

However, the company only purchased 4,704 vehicles against the sanctioned commitment of 6,400 EVs while taking the loan, and as much as INR 262.13 Cr remains unaccounted for, as per an interim order issued by the Securities and Exchange Board of India (SEBI) in April.

Gensol Faces Allegations, Investigations and Insolvency Pleas

In April, SEBI in its interim order said that Gensol and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, diverted company funds and were involved in manipulation of its share price.

SEBI also found that Gensol defaulted on debt worth INR 57.9 Cr from IREDA and an additional INR 13.67 Cr in debt from PFC.

The market regulator noted that company funds were diverted for personal use of promoters and their family members, including mother of Anmol Singh Jaggi and his wife. A part of the proceeds were also utilised to buy a luxury apartment in DLF’s “The Camellias” and invest in Ashneer Grover-led Third Unicorn.

Following the SEBI order, the startup suspended operations, leaving more than 10,000 drivers in the lurch.

Last month, NCLT issued directions to freeze and attach all the bank accounts and lockers of Gensol and its associated entities.

The tribunal’s order came after the Ministry of Corporate Affairs filed a petition seeking urgent interim relief to enable the Reserve Bank of India and Indian Banks’ Association (IBA) to take immediate steps to secure the financial assets of Gensol and 37 related parties and individuals.

In a recent development, National Company Law Appellate Tribunal (NCLAT) rejected two pleas filed by Gensol-linked entities: BluSmart Premium Fleet and Matrix Gas and Renewables, seeking a stay on the freeze of their assets ordered by NCLT.

The NCLAT’s Delhi bench last week refused to intervene and directed the petitioners to present their case before the NCLT.

Earlier this month, NCLT issued notices to BluSmart Mobility and Gensol Engineering on fresh insolvency petitions by creditors over alleged unpaid dues.

Spectrum Trimpex Pvt. Ltd and Catalyst Trusteeship Ltd moved NCLT under Section 7 of the Insolvency and Bankruptcy Code (IBC) against BluSmart over unpaid dues worth INR 1 Cr each. Another creditor Equentia Financial Services Pvt Ltd said that Gensol Engineering owed it around INR 9 Cr.