Tribunal holds that while Insolvency Code empowers adjudication over insolvency-related disputes, contractual conflicts over lease termination and dues must be resolved per agreed terms; immediate repossession of 70 EVs deferred pending detailed determination.
Ahmedabad, 7th September 2026 - The National Company Law Tribunal (NCLT), Ahmedabad Bench, delivered a significant judgment in the case of Keshav Khaneja v. Minder EV Logistics Pvt. Ltd., concerning the contentious termination of lease agreements for electric vehicles (EVs), disputed dues, and related repossession claims under the Insolvency and Bankruptcy Code, 2016 (IBC).
The matter arose when the Resolution Professional (RP) of Gensol EV Lease Limited (the Corporate Debtor), Mr. Keshav Khaneja, initiated proceedings under Section 60(5) of the IBC seeking directions for the immediate return of 70 leased EV vehicles from Minder EV Logistics Pvt. Ltd. (the Respondent), along with recovery of outstanding lease rentals and penalties amounting to over Rs.1.29 crore.
The Corporate Debtor had entered into Master Lease Agreements and Fleet Management Service Agreements with the Respondent for leasing EVs. While Gensol retained legal ownership, the Respondent held contractual possession and use rights. The RP claimed that the Respondent defaulted on payments starting February 2025 and failed to return vehicles despite repeated reminders, thus violating the lease terms and obstructing the RP's statutory duty to safeguard corporate assets.
The Respondent contested these allegations, asserting that Gensol failed to maintain and insure the vehicles as per contract, resulting in several vehicles becoming non-operational. It argued that these contractual breaches justified withholding payments and retention of vehicles. Further, the Respondent contended that no valid termination notice complying with the lease's cure and notice provisions had been issued, rendering the termination ineffective. The Respondent also highlighted the presence of an arbitration clause for resolving disputes, emphasizing that these contractual conflicts should not be summarily adjudicated under insolvency proceedings.
After hearing both sides, the Tribunal underscored the distinction between disputes arising directly from insolvency proceedings and purely contractual issues. It observed that Section 60(5) of the IBC confers jurisdiction on the NCLT to decide questions related to insolvency resolution processes but does not convert the tribunal into a general forum for all contractual disputes.
The Tribunal noted that the validity of termination, the exact amount of outstanding dues, and claims for penalties and damages involved disputed facts and complex contractual interpretations. These issues required detailed examination under the lease agreements and applicable laws, and could not be conclusively determined in summary proceedings under insolvency jurisdiction.
The judgment stressed the need to harmonize the RP's statutory duties under Sections 25(1) and 25(2)(a) of the IBC - to preserve and protect the Corporate Debtor's assets - with the Respondent's contractual right of possession pending final adjudication. Accordingly, it directed the Respondent to provide a detailed vehicle-wise statement of the EVs' location and condition and to permit the RP to physically verify the vehicles under reasonable terms. However, it declined to order immediate repossession or enforce payment claims at this stage.
The parties were left free to pursue their contractual remedies, including arbitration as stipulated in their agreements. The Tribunal also clarified that no personal liability was established against individual respondents beyond their corporate roles.
This ruling highlights the nuanced approach required when insolvency law intersects with contractual disputes, reaffirming that the NCLT's jurisdiction under the IBC is circumscribed to insolvency-related matters and does not override agreed contractual dispute-resolution mechanisms. It also underscores the importance for lessors and lessees to adhere strictly to contractual terms, especially regarding termination and default procedures, to avoid protracted litigation.
Bottom Line:
Disputes concerning the validity of termination of lease agreements, repossession of leased electric vehicles (EVs), and related monetary claims fall within the purview of Section 60(5) of the Insolvency and Bankruptcy Code, 2016, but adjudication of purely contractual disputes requires determination under applicable contractual terms and laws.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Sections 18(f), 25(1), 25(2)(a), 60(5)(c)
Keshav Khaneja v. Minder EV Logistics Pvt. Ltd., (NCLT)(Ahmedabad) : Law Finder Doc Id # 2980724
