Tribunal Directs Return of Electric Vehicles Amidst Ongoing Contractual and Deterioration Claims
In a significant decision, the National Company Law Tribunal (NCLT), Ahmedabad Bench, has ordered the immediate handover of 16 leased electric vehicles (EVs) from Zyngo EV Mobility Private Limited to Gensol EV Lease Limited, amidst an ongoing insolvency resolution process. The judgment, delivered on July 27, 2026, underscores the statutory obligations of Resolution Professionals under the Insolvency and Bankruptcy Code, 2016, while leaving several contentious issues open for further adjudication.
The case arose when Mr. Keshav Khaneja, the Resolution Professional (RP) for Gensol EV Lease Limited, filed an interlocutory application seeking the return of leased EVs, which are considered assets of the corporate debtor. These vehicles were initially leased to Zyngo EV Mobility under a Master Lease Agreement dated October 19, 2023. The NCLT's order mandates the handover of these vehicles along with all related documents, keys, and accessories, subject to the creation of a joint inventory and condition report by both parties.
The tribunal, comprising Sh. Shammi Khan and Sh. Sanjeev Sharma, emphasized the RP's duty to preserve and protect the assets of the corporate debtor. It found that Zyngo's RP, Mr. Rajiv Khurana, had fulfilled his statutory duties by disclosing vehicle locations and facilitating inspections, despite pending proceedings under Section 19(2) of the Code.
However, the NCLT did not settle the controversy regarding the condition of the vehicles, which were reported to be in poor state and missing essential parts during a joint inspection. This aspect, along with claims for deterioration, damages, and lease rentals, has been left open for adjudication in appropriate forums, highlighting the complexity and multi-layered nature of insolvency proceedings.
The tribunal also clarified that while the vehicles must be handed over immediately, issues of compensation and contractual obligations under the Master Lease Agreement will require detailed evidence and cannot be resolved within the limited scope of the current proceedings.
This decision marks a pivotal moment in the insolvency processes for both Gensol and Zyngo, as it seeks to balance the statutory framework with practical realities of asset preservation and recovery. The NCLT's directive ensures that the assets are returned to Gensol, enabling the continuation of its Corporate Insolvency Resolution Process (CIRP), while also preserving the rights of both parties to contest unresolved issues in further legal proceedings.
Bottom Line :
Insolvency and Bankruptcy Code, 2016 - Resolution Professional's obligation to preserve and hand over assets - Leased electric vehicles belonging to the Corporate Debtor must be handed over to the Applicant along with all relevant documents and accessories, subject to preparation of a joint inventory report. Disputes regarding deterioration of assets, compensation, or contractual claims remain open for adjudication before the appropriate forum.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016, Sections 18(1)(f), 20(1), 25(2)(a), 60(5)(c)
