NCLT Ahmedabad Admits Insolvency Proceedings Against BluSmart Over INR 1.28 Cr Default

Evera Cabs Proposes Lease of 1,000 EVs From BluSmart Amid Insolvency Proceedings

SUMMARY

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted an insolvency plea against electric vehicle ride-hailing startup BluSmart over unpaid financial obligations totalling INR 1.28 Cr

Catalyst Trusteeship, the petitioner, said BluSmart had issued 15 unsecured non-convertible debentures (NCDs) worth INR 15 Cr in April 2023

Acting as trustee for InCred Credit Opportunities Fund-I, Catalyst claimed that BluSmart missed payments of INR 64.17 Lakh in March and INR 63.31 Lakh in April this year

Catalyst Trusteeship, the petitioner, said BluSmart had issued 15 unsecured non-convertible debentures (NCDs) worth INR 15 Cr in April 2023. Acting as trustee for InCred Credit Opportunities Fund-I, Catalyst claimed that BluSmart missed payments of INR 64.17 Lakh in March and INR 63.31 Lakh in April this year.

A delayed payment from February was also mentioned.

The tribunal found enough evidence of financial default under the Insolvency and Bankruptcy Code (IBC), including an email from BluSmart’s cofounder Anmol Singh Jaggi acknowledging the dues. BluSmart’s defence, that it was facing temporary financial issues, was, however, rejected.

The NCLT has now started the Corporate Insolvency Resolution Process (CIRP), imposed a moratorium on the company, and appointed an Interim Resolution Professional (IRP) to take over operations.

Catalyst has been ordered to deposit INR 10 Lakh to cover initial CIRP costs. The IRP has three days to make a public announcement and start collecting creditor claims.

Notably, in April, BluSmart abruptly suspended operations following a SEBI order against its cofounders, Anmol Singh Jaggi and Puneet Singh Jaggi, over allegations of diverting funds meant for EV purchases toward personal luxuries like an INR 26 Lakh golf set and a $5 Mn luxury apartment.

SEBI’s probe revealed misuse of about INR 978 Cr loan intended to procure 6,400 EVs via Gensol Engineering, of which only around 4,704 were procured and deployed, raising serious corporate governance concerns.

Gensol Engineering has also been under insolvency since June 13. The company has now reportedly invited bids to lease its fleet of around 4,000 electric vehicles, which were previously deployed by BluSmart in Delhi-NCR and Bengaluru.

According to a Moneycontrol report, with BluSmart’s operations suspended since April, the lease offer comes amid growing demand for EV fleets. Competitors like Evera Cabs, Uber Electric, and Everest Fleet are expected to show interest.