No Respite To Gensol As NCLAT Quashes Plea To Defreeze Assets

Gensol can’t seem to catch a breath. Now, the National Company Law Appellate Tribunal (NCLAT) has 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 an Ahmedabad bench of the National Company Law Tribunal (NCLT).        

The NCLAT’s Delhi bench on Wednesday (June 4) refused to intervene and directed the petitioners to present their case before the NCLT, which is scheduled to hear the matter on June 12.

Notably, Gensol approached the appellate body (NCALT) with a plea that the freeze was imposed by the NCLT without a hearing. In its second petition, the troubled company pleaded that it was struggling to process the salaries of its employees due to this.

The original freeze order, issued on May 28 by an NCLT Ahmedabad bench, was issued on a plea filed by the Ministry of Corporate Affairs (MCA). 

Responding to Gensol’s charges that it was not allowed to present its case, the MCA on Wednesday argued that its petition filed before the NCLT contained all material facts, under which the tribunal’s order was passed. 

BluSmart Premium Fleet and Matrix Gas and Renewables argued that their financial operations have come to a standstill and that the freeze was paralysing their ability to pay vendors and staff. To this, the MCA submitted that it was looking into this aspect.

But the NCLAT maintained that all such submissions must be addressed at the NCLT hearing.

This follows the NCLAT finding the evidence (prima facie) of serious governance lapses, including fund diversion, account manipulation, governance violations, and potential systemic fraud at Gensol Engineering and its various subsidiaries.

At the heart of the matter is the SEBI’s interim order in April 2025, which found that Gensol’s promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, misused the company’s funds. The order also underlined that the siblings used the company as their “piggybank”.

A Web Of Allegations And Investigations

The SEBI order triggered a broader regulatory response, involving a slew of top enforcement agencies and financial watchdogs, including SEBI, Serious Fraud Investigation Office (SFIO) under MCA, enforcement directorate (ED), Reserve Bank of India (RBI), and income tax department. 

These agencies are now collectively probing allegations of diversion and misuse of INR 977.75 Cr in loans meant for Gensol’s EV business, including the linked entity BluSmart.

Amid the regulatory scrutiny and legal cases, both Gensol and BluSmart have been further marred by a slew of insolvency petitions filed by creditors. 

Two lenders, namely Spectrum Trimpex and Catalyst Trusteeship, have moved the NCLT against BluSmart under Section 7 of the Insolvency and Bankruptcy Code (IBC) to recove unpaid dues of INR 1 Cr each. 

Simultaneously, Equentia Financial Services has filed a similar petition against Gensol Engineering for outstanding dues of INR 9 Cr. The NCLT has asked both firms to submit their responses within a week.

Additionally, the tribunal on June 3 adjourned another high-stakes insolvency plea filed by the Indian Renewable Energy Development Agency (IREDA), concerning a default of INR 510 Cr by Gensol, to June 11.

Notably, between FY22 and FY24, Gensol borrowed nearly INR 977.75 Cr from IREDA and the Power Finance Corporation (PFC) to purchase 6,400 electric cars. However, only 4,704 EVs were acquired and INR 262.13 Cr remains unaccounted for, according to a SEBI interim order from April 2025.

From Financial Fraud To Employee Impact

SEBI’s interim order has already uncovered damning findings. The regulator accused Gensol and its promoters, Jaggi brothers, of manipulating the company’s stock price, defaulting on loans, and diverting funds for personal luxuries, including buying a high-end apartment in DLF’s “The Camellias” and investing in Third Unicorn, a startup led by Ashneer Grover.

Notably, the Jaggi brothers, who also cofounded BluSmart, have since resigned from Gensol Engineering, following SEBI’s directives. In a recent blow, the Delhi High Court (HC) also barred Gensol and BluSmart from creating third-party rights over 220 additional EVs.

All these developments have brought BluSmart’s operations to a grinding halt, leaving thousands of drivers and over 800 full-time employees in limbo, without jobs or salaries.