NCLAT Restricts Gensol From Leasing Out 152 EVs: Report

SUMMARY

In the recent order, NCLAT restricted Gensol IRP from leasing 152 EVs, as the lease agreement expired before Gensol’s insolvency proceedings began

The order came on a petition filed by SMAS Auto Leasing India, one of Gensol’s lessors, which had leased out 164 vehicles to the company

Gensol has been under insolvency proceedings since June 13

The National Company Law Appellate Tribunal (NCLAT) today restricted Gensol Engineering interim resolution professional (IRP) from leasing out 152 EVs, which it had taken on rent from SMAS Auto Leasing India before going into insolvency.

The order came after SMAS filed a plea on IRP Keshav Khaneja’s bid to lease a fleet of vehicles at a fixed monthly rental, reported Mint.

Khaneja reportedly issued a public notice, inviting bids to lease 4,000 EVs in Delhi-NCR and Bengaluru. SMAS Auto moved the tribunal, claiming that the lease for those 152 EVs had ended in April, days before Gensol entered the insolvency proceedings.

In today’s court hearing, a bench led by chairperson Justice Ashok Bhushan ordered that the IRP was not allowed to lease or dispose of the 152 EVs, as the lease agreement expired before the Corporate Insolvency Resolution Process (CIRP) began.

“It is submitted that those e-vehicles which are in possession of the lessor prior to initiation of the CIRP cannot be interfered by the impugned order,” the NCLAT said.

SMAS Auto had leased 164 EVs to Gensol. While the bench has restricted the lease for 152, the remaining 12 stay under the possession of the IRP till the next hearing on August 28.

Gensol used to lease these EVs to BluSmart, one of its group companies.

How The Gensol Saga Unfolded

Gensol’s end game began back in April, when SEBI highlighted that the promoters of Gensol Engineering, Jaggi brothers, misled the regulatory body, credit rating agencies (CRAs), lenders and investors by using the company’s funds for personal use.

The markets regulator barred the Jaggi brothers from holding any key managerial positions at the company.

On April 24, the Enforcement Directorate detained Puneet Singh Jaggi to question him regarding the Gensol fraud. However, he was later granted anticipatory bail from the Delhi High Court.

In the most recent development, SEBI upheld its interim findings in the case as well as directions against Jaggi brothers. With all this, Gensol has been under insolvency proceedings since June 13.

Last month, the Ahmedabad bench of the NCLT also admitted an insolvency plea against BluSmart over unpaid dues of INR 1.28 Cr. The EV ride-hailing company also suspended its operations in April and shut down its app later.