DRT Delhi directs status quo in ₹992 Cr proceedings by IREDA and PFC against Gensol

The Debts Recovery Tribunal (DRT)–III, Delhi, has directed Gensol Engineering Limited and Gensol EV Lease Pvt Ltd to maintain status quo on secured assets and vehicles, in recovery proceedings initiated by two government lenders—Indian Renewable Energy Development Agency Limited (IREDA) and Power Finance Corporation (PFC)—for a combined amount of approximately ₹992 crore..The orders were issued by Presiding Officer Shiv Kumar during virtual hearings held on May 22, 2025, across multiple Original Applications (OAs) filed under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993..IREDA has filed two recovery applications:One against Gensol Engineering Limited seeking recovery of ₹510 crore.Another against Gensol EV Lease Pvt Ltd seeking ₹218 crore.PFC has filed a separate recovery application against Gensol Engineering Limited for an amount of ₹264 crore, arising from defaults under a distinct financing arrangement..In all matters, the Tribunal issued consistent interim orders:Directed the defendants to maintain status quo with respect to secured assets and vehicles.Required the applicant institutions to provide complete copies of the OA documents to defendants' counsel within two days and file proof of service.Directed the defendants’ counsel to file vakalatnama within three days.Ordered the Tribunal registry to issue notices on interim reliefs to remaining defendants.Scheduled all matters for hearing on the issue of interim relief on May 28, 2025, stating that no further adjournments will be granted..The National Company Law Tribunal (NCLT) at Ahmedabad on May 16 issued notice in IREDA's insolvency plea against Gensol Engineering Limited over a loan default exceeding ₹510 crore..Gensol's troubles began with SEBI’s April 15 interim order alleging that Gensol diverted hundreds of crores of rupees through related parties, used public and borrowed funds for unrelated luxury purchases - including a high-end apartment - and submitted forged “No Objection Certificates” and conduct letters to credit rating agencies.The regulator also found that the company misled investors with inflated EV procurement claims, while actual plant activity was negligible.Based on these findings, SEBI barred the company and its promoters - Anmol Singh Jaggi and Puneet Singh Jaggi - from accessing the securities market and restrained them from holding directorship or key managerial positions.On May 7, Securities Appellate Tribunal (SAT) refused to stay SEBI's interim order. SAT directed Gensol to file its reply to the interim order passed by SEBI and further directed the markets regulator to pass a final order within four weeks of hearing Gensol. .Meanwhile, a bunch of lessors have been moving the Delhi High Court time and again seeking to protect their interests in the Electric Vehicles (EVs) they had leased to Gensol's subsidiary BluSmart.On May 9, the Delhi High court directed the seizure and relocation of 129 electric passenger vehicles hypothecated to STCI Finance Ltd (plaintiff/ lender) by Gensol and BluSmart after the lender alleged that the companies had defaulted on a ₹15 crore loan and was seeking to unlawfully dispose of the vehicles.On May 7, the Delhi High Court had restrained Gensol and Blu Smart from alienating 220 more vehicles belonging to lessors Smas Auto Leasing and Shefastaq OPC.Earlier the Court appointed a receiver to take deemed custody of 95 electric vehicles leased to BluSmart Cabs by Clime Finance Private Limited, while restraining Gensol from creating third-party rights over the fleet.On April 25, the Court had restrained Gensol and BluSmart from alienating or creating third-party rights over 175 electric vehicles leased to them by Japanese financial services giant Orix..IREDA was represented by Senior Advocate Sanjiv Kakra with Advocates Mohana Nijhawan, Gaurav Arora and Akash Madan from Shardul Amarchand Mangaldas & Co.