GENSOL EV Lease Ltd. Directed to Return 124 Vehicles to Resolution Professional as Part of CIRP
In a significant development, the National Company Law Tribunal (NCLT) Ahmedabad has directed GENSOL EV Lease Limited to return 124 electric vehicles (EVs) to the Resolution Professional of the insolvent Indian Renewable Energy Development Agency Limited. This decision, dated July 10, 2026, comes amidst the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016.
The tribunal, led by Member (Judicial) Shammi Khan and Member (Technical) Sanjeev Sharma, emphasized the statutory obligations of the Resolution Professional to secure custody and control of the Corporate Debtor's assets, as mandated under Sections 18(1)(f) and 25(2)(a) of the IBC. The judgment was rendered in response to an application filed by the Resolution Professional seeking repossession of the EV fleet leased to GENSOL EV Lease Ltd., following the termination of a Master Lease Agreement dated September 1, 2023.
GENSOL EV Lease Ltd., the respondent in the case, had defaulted on lease rental payments from January 2025, prompting the Resolution Professional to initiate legal proceedings. Despite being granted opportunities to rectify the defaults, GENSOL failed to comply, leading to the tribunal's intervention.
The tribunal rejected GENSOL's proposal for renegotiating the terminated lease agreement, upholding the commercial wisdom of the Committee of Creditors (CoC). The CoC had previously rejected such proposals, emphasizing the need for repossession to preserve the assets of the Corporate Debtor.
The judgment also addressed the disputed monetary claims, directing that such claims be pursued in appropriate forums outside the scope of Section 60(5) proceedings, as they require detailed reconciliation of accounts and evidence examination.
The NCLT has given GENSOL EV Lease Ltd. a 15-day window to hand over the vehicles, along with all related documents and accessories, to the Resolution Professional. The tribunal has also outlined a structured process for repossession, ensuring no obstruction in the handover process and preserving the fleet's value during the CIRP.
This judgment underscores the importance of adhering to contractual obligations and highlights the robust mechanisms in place under the IBC to protect the interests of creditors and preserve the value of insolvent entities.
Bottom line:-
Insolvency and Bankruptcy Code, 2016 - Resolution Professional entitled to secure custody and control of assets of Corporate Debtor under Sections 18(1)(f) and 25(2)(a) of the Code.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 - Sections 18(1)(f), 25(2)(a), 60(5).
