NCLAT declines relief to Gensol entities on asset freeze, asks BluSmart and Matrix to approach NCLT

Passing an order on the plea filed by the Ministry of Corporate Affairs, a vacation bench of the NCLT had on May 28 directed to freeze assets of Gensol, its promoters, and related entities.

Insolvency appellate tribunal NCLAT on Wednesday declined to stay the NCLT order directing to freeze assets of Gensol, its promoters, and related entities. It has directed two Gensol Group entities — BluSmart Premium Feet and Matrix Gas and Renewable — to approach the Ahmedabad bench of the National Company Law Tribunal (NCLT) with their plea, where the matter has been listed for hearing on June 12. Passing an order on the plea filed by the Ministry of Corporate Affairs, a vacation bench of the NCLT had on May 28 directed to freeze assets of Gensol, its promoters, and related entities.

The two Gensol Group entities approached the National Company Law Appellate Tribunal (NCLAT), seeking an immediate stay on the orders passed by the NCLT. They had contended that NCLT passed the order on May 28 without giving them a proper hearing, which is against the rules. BluSmart Premium provides electric vehicle ride-hailing service BluSmart Mobility, while Matrix Gas and Renewable is a natural gas aggregation and green hydrogen infrastructure development company.

However, their plea was opposed by the MCA officials during the proceedings. They submitted there are specific allegations in the petition filed before the NCLT by the government and such allegations have been duly considered by the tribunal while passing the order. The companies also contended that the matter is now listed before the NCLT for hearing on June 12.

Requesting for advancing of the date, the appellants submitted that the asset freeze may cause hardship as payment of salaries and other running expenses will be due. On this, the DG, appearing on behalf of the MCA, submitted that the government is also looking into this aspect. Observing this, the NCLAT said, ”In view of the above, we dispose of these two appeals by requesting the NCLT to treat these two appeals as applications of the appellants for vacation of stay granted vide order dated May 28, 2025 and its consequent orders; while keeping open all the submissions which may be made before the NCLT by either parties.”

Earlier on May 28, the NCLT had permitted the central government to freeze the bank accounts and lockers of Gensol Engineering, its 10 subsidiaries, and several individuals. "On perusal of the materials placed on record, this Tribunal notes serious allegations of fraudulent conduct, including diversion of company funds by the promoters of Gensol Engineering (Respondent No. 1) and related entities, violation of corporate governance norms, manipulation of financial statements, default in loan repayments despite false declarations, and illegal alienation of company assets,” the NCLT order said.

The investigation reports and regulatory findings from the the MCA, Sebi, and Serious Fraud Investigation Office prima facie support the government’s claims of systemic fraud involving substantial public interest, it said.