NCLT admits BluSmart Mobility into insolvency

BENGALURU: The National Company Law Tribunal (NCLT) in Ahmedabad has admitted Catalyst Trusteeship’s petition in opposition to electrical‑cab operator BluSmart Mobility for defaulting on dues of about Rs 1.28 crore. The tribunal’s order initiated the company insolvency decision course of (CIRP) and appointed NPV Insolvency Professionals Private Ltd because the Interim Resolution Professional (IRP).BluSmart, as soon as a excessive‑profile participant in India’s EV‑based mostly experience‑hailing market, has been battling mounting liabilities and money circulate pressures. Despite attracting enterprise backing and increasing its fleet, the corporate struggled to maintain tempo with working prices and fee obligations, culminating within the admitted default that triggered the insolvency course of.The proceedings come at a time when BluSmart’s key shareholder, Gensol Engineering, and its subsidiary Gensol EV Lease are additionally below insolvency. The tribunal just lately admitted separate petitions by the Indian Renewable Energy Development Agency (Ireda) for defaults of Rs 510.10 crore in opposition to Gensol Engineering and Rs 218.95 crore in opposition to Gensol EV Lease. According to Ireda’s filings, cross‑default provisions linked the 2 entities, which had availed time period loans for electrical car leasing and infrastructure. Personal ensures by promoters Anmol Singh Jaggi and Puneet Singh Jaggi and company ensures from Gensol Engineering have been additionally invoked.Troubles at Gensol and BluSmart deepened after a Sebi investigation two months in the past alleged that the Jaggi brothers diverted loans taken in Gensol’s identify to purchase a luxurious flat, inflate Gensol’s inventory value and fund private ventures, whereas additionally forging no‑default letters from lenders resembling Ireda and Power Finance Corporation to falsely declare that the corporate was not in default.“The NCLT’s decision, despite BluSmart’s attempt to resist insolvency proceedings by citing temporary financial difficulties and minor technical defaults that were later fixed, reinforces that defaulters cannot take shelter under vague grounds,” mentioned Akshit Goyal, accomplice at Goyel & Goyal. “It upholds the sanctity of the IBC and reflects that insolvency is a last‑resort remedy to protect the lending ecosystem, not a tool for routine recovery.”As a part of the BluSmart order, the tribunal imposed a moratorium that bars any restoration proceedings, switch of belongings or enforcement of safety pursuits in opposition to the corporate whereas the CIRP is underway. The IRP has been directed to take management of belongings inside seven days, invite claims from collectors, and file progress experiences with the tribunal. Catalyst has been requested to offer Rs 10 lakh as interim funding to run the method, a procedural deposit that can later be adjusted by the committee of collectors. The Registrar of Companies has additionally been instructed to replicate BluSmart’s insolvency standing on the MCA portal.A big concern for purchasers arises from BluSmart’s pockets system. The firm operated a closed‑system pay as you go fee instrument (PPI), which is basically an app‑based mostly pockets that would solely be used for BluSmart rides and associated companies. As per the Reserve Bank of India’s grasp instructions, these devices don’t allow money withdrawal or redemption and don’t require authorisation from the Reserve Bank. This means funds parked in such wallets are outdoors the purview of RBI regulation and lack the protections obtainable to regulated fee devices.“There is a chance that customers may get refunds because the company’s wallet operates through a PPI licence. If there was no PPI, customers would have had to file their claims, as they rank last in the recovery waterfall,” Sonam Chandwani, managing partner at KS Legal & Associates, told TOI. “The larger concern will likely be for investors rather than customers, given that wallet balances are usually small. Since BluSmart has tangible assets, the case could attract serious resolution interest, and there is also a possibility of a group insolvency angle.”