NCLT directs insolvency resolution proceedings against Gensol Engineering and arm Gensol EV Lease
The National Company Law Tribunal (NCLT) admitted Gensol Engineering Ltd. and its arm Gensol EV Lease Ltd for insolvency resolution following separate petitions filed by Indian Renewable Energy Development Agency Ltd. (IREDA).
However, NCLT appointed an alternative interim resolution professional (IRP) for both the companies, while rejecting the name proposed by IREDA.
On May 14, State-run IREDA had filed an application under Section 7 of Insolvency and Bankruptcy Code, 2016 against Gensol Engineering claiming a default of over ₹510 crore.
IREDA had filed a separate plea against Gensol EV Lease claiming a default of ₹218.95 crore.
IREDA had also initiated proceedings before the Debt Recovery Tribunal against both the firms.
The IREDA petition against Gensol Engineering satisfies Section 7's substantive requirements, NCLT Judicial Member Shammi Khan and Technical Member Sanjeev Kumar Sharma, said in their order on June 13.
Gensol Engineering parallel Debt Recovery Tribunal (DRT) proceedings do not bar Corporate Insolvency Resolution Process (CIRP), as no moratorium exists pre-admission. Upon admission, the moratorium under Section 14 (1) of IBC will override such proceedings, they noted.
DRT May 28 order and the Securities and Exchange Board of India's (SEBI) April 15 order reinforce the need for a corporate insolvency resolution process against Gensol Engineering, to protect the creditors and address governance issues, NCLT said.
IREDA proposed the name of Pulkit Gupta, EY Restructuring LLP for interim resolution professional (IRP) for Gensol Engineering and Gensol EV Lease
However, Gensol Engineering objected to Gupta's appointment citing prior relationships.
The Tribunal finds that the undisclosed relationships raised concerns about Gupta's eligibility, necessitating the appointment of an alternative IRP, NCLT said.
NCLT appointed Keshav Khaneja as IRP for Gensol Engineering.
Making similar observations, NCLT also appointed Khaneja as IRP for Gensol EV Lease.
Gensol has been in the spotlight after SEBI via an interim order in April barred the company's promoters from the securities market for alleged fund diversions and corporate governance lapses.
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