BluSmart Mobility to face insolvency proceedings over ₹1.28 crore default

Electric ride-hailing startup Blu-Smart Mobility has been admitted into corporate insolvency resolution proceedings (CIRP) by the National Company Law Tribunal (NCLT), Ahmedabad. The order, pronounced on July 28, 2025, follows a petition filed by debenture trustee Catalyst Trusteeship Limited, citing a default of ₹1.28 crore on non-convertible debentures (NCDs). This marks Blu-Smart as India’s first major EV ride-hailing firm to enter insolvency.

BluSmart had issued 15 secured NCDs worth ₹15 crore to Catalyst (acting for InCred Credit Opportunities Fund-I) on April 20, 2023, to fund its EV fleet operations. The debt carried a 24-month tenor with staggered principal repayments starting April 30, 2023. The default materialized when BluSmart failed to pay installments due on March 31, 2025 Rs 64.17 lakh) and April 30, 2025 (Rs 63.31 lakh), totalling Rs 1.28 crore, which includes Rs 1.25 crore in principal plus other dues. An earlier payment of ₹64.77 lakh in February 2025 was also delayed by 18 days, signalling prior financial stress.

A key shareholder, Anmol Singh Jaggi, admitted the default via email on April 10, 2025, promising payment “by next week,” which never materialized.

The NCLT, presided over by Judicial Member Shammi Khan and Technical Member Sanjeev Sharma validated the debt and default with evidence including bank statements, the Debenture Trust Deed, and records from SEBI’s e-governance portal (NeSL). The tribunal dismissed Blu-Smart’s defenses of a “temporary financial crunch” and a “premature petition,” citing Supreme Court precedents that mandate CIRP initiation when a default is proven. While noting SEBI’s April 15 interim order against BluSmart’s related entity Gensol Engineering, the NCLT clarified that this did not absolve BluSmart’s debt obligations.

As a consequence of the admission, an immediate moratorium has been imposed, freezing lawsuits, asset transfers, or recovery actions against BluSmart. NPV Insolvency Professionals Pvt. Ltd. (New Delhi) has been appointed as the Interim Resolution Professional (IRP) to oversee operations, manage assets, and invite creditor claims. Catalyst, the financial creditor, must advance ₹10 lakh to the IRP within seven days to cover initial CIRP expenses.

BluSmart had argued that the default was “commercial in nature” rather than indicative of insolvency, and that the petition was a “recovery tactic” timed with SEBI’s action against Gensol. They also cited minor technical defects in the filing. However, the tribunal overruled all objections, emphasizing Blu-Smart’s email admission and persistent non-payment.

The CIRP allows a maximum of 330 days for BluSmart to be rescued via a resolution plan; otherwise, it will face liquidation.

Also Read: NCLT admits insolvency plea against Gensol Engineering