NCLAT decides Appeal by SMAS Auto Leasing Against NCLT Ahmedabad’s CIRP Admission Order proceedings of Gensol Engineering Limited

Date of Hearing: 2^nd September 2025

Case Title: SMAS Auto Leasing India Private Limited v. Gensol Engineering Limited through its CoC and IRP & Ors.

Forum: Hon’ble National Company Law Appellate Tribunal (NCLAT), Chairperson’s Court.

The Hon’ble National Company Law Appellate Tribunal (NCLAT) today decided the appeal filed by SMAS Auto Leasing India Private Limited (“SMAS”) challenging the order dated 13.06.2025 passed by the Hon’ble National Company Law Tribunal (NCLT), Ahmedabad Bench, whereby the Corporate Insolvency Resolution Process (CIRP) was initiated against Gensol Engineering Limited (“Gensol”).

Background of the Dispute:

The dispute stems from a Master Lease Agreement dated 26.05.2021 under which Gensol leased 164 electric vehicles (EVs) from SMAS. Subsequently, owing to lease rent defaults and allegations of financial fraud by Gensol and its founders, Mr. Anmol Singh Jaggi and Mr. Puneet Singh Jaggi, SMAS terminated its Agreement with Gensol and approached the Hon’ble Delhi High Court by way of a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking urgent interim reliefs against Gensol and its founders.

By order dated 07.05.2025, the Hon’ble Delhi High Court granted interim relief in favour of SMAS, appointing court receivers to take possession of the leased Evs, conduct inspections, and maintain them. The High Court also restrained Gensol from alienating, encumbering, or otherwise dealing with the Evs and directed its cooperation in locating and handing them over to the appointed receivers.

In compliance with the High Court’s directions, the Receivers took possession of 152 out of 164 Evs. However, following the initiation of CIRP and the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC), the NCLT’s order dated 13.06.2025 restrained recovery of any property by an owner or lessor that was in the possession or occupation of Gensol, thereby preventing SMAS and the Receivers from taking further possession of the leased vehicles.

Grounds of Challenge:

Aggrieved by the said NCLT order, SMAS has filed the present appeal before the NCLAT, contending that the Master Lease Agreement had already been terminated on 30.04.2025—prior to the commencement of the CIRP. Accordingly, the leased EVs remains the property of SMAS and are currently in wrongful possession of Gensol through its Interim Resolution Professional (IRP), Mr. Keshav Khaneja.

Final Order by the NCLAT:

The Hon’ble NCLAT noting that since the 152 EVs were in the possession of the Receivers prior to initiation of the CIRP of the Corporate Debtor Respondent, observed that they cannot be re-leased by the Corporate Debtor by way of advertisement since they do not form a part of the insolvency estate of the Corporate Debtor.

The Hon’ble NCLAT therefore disposed off the Appeal on the observation that since the Receiver already has possession of 152 out of the 164 EVs, no purpose shall be served keeping the Appeals pending.

Appearances:

Senior Advocate Mr. Arun Kathpalia, instructed by King Stubb and Kasiva, Advocates & Attorneys, appeared on behalf of the Appellant, SMAS, along with Advocates Mr. Aditya Bhattacharya, Mr. Sukrit Kapoor, Ms. Simran Tandon, Mr. Sarthak Miglani, Mr. Vanshay Kaul, and Mr. Navnit Kumar.