Gensol Engineering insolvency: NCLT admits Ireda's plea on ₹510 crore default

Mint

2 days ago

New Delhi: The National Company Law Tribunal's Ahmedabad bench has admitted Gensol Engineering Ltd into corporate insolvency proceedings on a plea filed by state-run Indian Renewable Energy Development Agency Ltd (Ireda), which cited loan defaults amounting to ₹ 510 crore.
The bench of Shammi Khan (judicial member) and Sanjeev Kumar Sharma (technical member) passed the order under Section 7 of the Insolvency and Bankruptcy Code (IBC), appointing an interim resolution professional (IRP) to take charge of the company's affairs.
Ireda, in its plea, pressed for urgent oversight, arguing that Gensol had effectively become "headless" after its top leadership exited amid ongoing regulatory scrutiny.
'Sir, by virtue of Sebi's order, the company is now headless. Directors have walked out and the company has projects worth crores of rupees. Somebody needs to manage the show,' Ireda's counsel told the tribunal during earlier proceedings.
The application also alleged a 'complete breakdown of internal controls and corporate governance norms' at the publicly listed renewable energy firm, accusing its promoters of treating the company 'as if it were their proprietary firm.'
Ireda flagged Gensol's sizable order book involving capital-intensive renewable EPC (engineering, procurement, and construction) contracts awarded by government and public sector entities.
The interim resolution professional (IRP), who will replace Gensol's management, will form a committee of creditors (CoC) to assess resolution proposals. If no plan is approved within 180–330 days, the company may face liquidation.
Ireda first had issued a notice to Gensol on 25 April and disclosed on 14 May that it had filed for insolvency. Since then, several other financial creditors have also initiated insolvency proceedings against the company.
On 28 May, the NCLT had also allowed the central government to freeze the bank accounts and lockers of Gensol Engineering, its 10 subsidiaries, and several individuals linked to the matter.
Gensol and its entities — including BluSmart Premium Fleet and Matrix Gas & Renewables — subsequently approached the National Company Law Appellate Tribunal (NCLAT) against the asset freeze, but were directed to approach the NCLT for relief.
Simultaneously, state-run lenders Ireda and Power Finance Corporation (PFC) also filed separate petitions before the tribunal to recover combined dues of approximately ₹ 992 crore.
Gensol's troubles mounted following a 15 April interim order by the Securities and Exchange Board of India (Sebi), which accused promoters Anmol Singh Jaggi and Puneet Singh Jaggi of misappropriating company funds for luxury personal expenses and defaulting on loans — particularly those linked to electric vehicles procured for BluSmart, an EV ride-hailing venture founded by Anmol.
Sebi further charged the company with misleading investors by overstating its EV procurement capabilities, despite minimal activity at its manufacturing units. Under mounting regulatory pressure, both Anmol and Puneet resigned from the board on 6 May — nearly a month after Sebi barred them from holding any key managerial positions.
On 7 May, the Securities Appellate Tribunal (SAT) refused to stay Sebi's interim order, directing Gensol to file a formal response, and asked Sebi to pass a final order within four weeks of receiving it.
Gensol had borrowed a total of ₹ 977.75 crore from Ireda and PFC, including ₹ 663.89 crore specifically earmarked for EV procurement for BluSmart. In April, both lenders lodged complaints with the Economic Offences Wing, alleging that loan-related documents had been falsified.