IREDA files Section 19 plea against Gensol Engineering in DRT

The Indian Renewable Energy Development Agency (IREDA) has intensified its efforts to recover significant dues from Gensol Engineering Limited and its subsidiary, Gensol EV Lease Pvt Limited, by filing an Original Application under Section 19 of The Recovery of Debts and Bankruptcy Act, 1993 before the Debt Recovery Tribunal (DRT) Delhi on May 20, 2025.

This latest legal action seeks to recover a total default amount of approximately Rs 729 crore. Specifically, IREDA is pursuing Rs 510 crore from Gensol Engineering Limited and Rs. 218.95 Crore from Gensol EV Lease Pvt Limited.

This filing follows earlier steps taken by IREDA, including an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Gensol Engineering Limited on May 14, 2025, and a similar bankruptcy application against Gensol EV Lease Pvt Limited on May 15, 2025.

Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, outlines the procedure for banks and financial institutions to apply to the Debt Recovery Tribunal (DRT) for recovery of debts. Essentially, it allows them to file an application with the DRT within whose local jurisdiction the bank or financial institution maintains an account where the debt is outstanding.

The move comes amidst a broader regulatory scrutiny of Gensol Engineering Limited and its promoters. In April 2025, the Securities and Exchange Board of India (SEBI) issued an interim order barring Gensol Engineering and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from accessing the securities market and from holding key managerial positions. SEBI’s order highlighted alleged fund diversion, governance lapses, and the misuse of company funds for personal luxury purchases. The Ministry of Corporate Affairs has also initiated a probe into the affairs of Gensol and its affiliate, BluSmart Mobility.

Gensol Engineering had secured substantial loans, including Rs. 978 crore from IREDA and Power Finance Corporation, with a significant portion earmarked for the purchase of electric vehicles. However, discrepancies were noted in the number of vehicles procured versus the funds utilized, leading to an unaccounted financial gap.

The insolvency proceedings and the DRT application mark a critical juncture for Gensol Engineering and its subsidiaries as they face mounting legal and financial challenges.

Also Read: IREDA drags Gensol Engineering to insolvency court