NCLAT refuses interim relief to Gensol units on asset freeze, directs BluSmart and Matrix to move NCLT

The National Company Law Appellate Tribunal (NCLAT) on Wednesday declined to grant interim relief to Gensol Group entities, BluSmart Premium Fleet and Matrix Gas and Renewable, against an asset freeze ordered by the National Company Law Tribunal (NCLT).The appellate tribunal directed the two companies to present their plea before the Ahmedabad bench of the NCLT, where the case is scheduled for hearing on June 12, PTI reported. The freeze was ordered by a vacation bench of the NCLT on May 28 following a petition filed by the Ministry of Corporate Affairs (MCA), targeting Gensol Engineering, its promoters, and related entities.In their appeal to the NCLAT, BluSmart and Matrix argued that the NCLT issued its order without providing a proper hearing, in violation of procedural norms. BluSmart Premium operates the electric vehicle ride-hailing service BluSmart Mobility, while Matrix Gas and Renewable is involved in natural gas aggregation and green hydrogen infrastructure.MCA officials opposed the appeal, stating that the NCLT had considered serious allegations raised in the government’s petition. The original NCLT order cited “serious allegations of fraudulent conduct, including diversion of company funds by the promoters of Gensol Engineering… violation of corporate governance norms, manipulation of financial statements, default in loan repayments despite false declarations, and illegal alienation of company assets.“The companies also urged the NCLAT to consider the hardship caused by the freeze, including the inability to pay salaries and cover operational costs. In response, the Directorate General representing the MCA acknowledged the concern and said the government is examining the issue.Taking these arguments into account, the NCLAT stated: “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.”The May 28 NCLT order had allowed the MCA to freeze bank accounts and lockers belonging to Gensol Engineering, 10 of its subsidiaries, and several individuals. It also noted that findings by the MCA, Sebi, and the Serious Fraud Investigation Office (SFIO) prima facie support claims of large-scale fraud involving public interest.