Gensol Insolvency: NCLAT Refuses To Expunge NCLT's Remarks Against IRP, Says Observations Not Adverse To His Conduct

The National Company Law Appellate Tribunal (NCLAT) recently refused to expunge certain adverse observations made against insolvency professional Pulkit Gupta in an order passed by the National Company Law Tribunal (NCLT), Ahmedabad, while admitting insolvency proceedings against Gensol Engineering Limited and its group entity Gensol EV Lease Limited.

The appellate tribunal, in an order passed on November 3, clarified that the remarks of the tribunal concerning Gupta's prior association with Gensol shall not be 'considered to be any adverse observation' to his conduct or character for any purpose

A bench of Chairperson Justice Ashok Bhushan and Technial Member Barun Mitra, observed that Gupta had not been given an opportunity to respond to the objections raised before the NCLT.

While declining to interfere with the Ahmedabad Bench's admission order, the Appellate Tribunal directed that “any observation made by the NCLT on the conduct or character of the Appellant shall not be taken as a final observation of the Appellant as such.,” adding that the disposal of the appeal “will be no reflection on the character or conduct of the appellant as such.”

The case stems from an application filed by the Indian Renewable Energy Development Agency Limited (IREDA) against Gensol Engineering Limited seeking initiation of the Corporate Insolvency Resolution Process (CIRP) over alleged defaults amounting to Rs 510 crore.

The NCLT, in its June 13, 2025 order, admitted the insolvency plea, declared a moratorium, and appointed Keshav Khaneja as the Interim Resolution Professional (IRP). The tribunal appointed Khaneja after rejecting the appointment of Gupta, who had been proposed by IREDA over alleged conflict-of-interest concerns.

Gensol had argued that Gupta was ineligible under the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, citing prior professional association between entities linked to him and the Gensol group through Ernst & Young LLP and Ernst & Young Restructuring LLP.

The NCLT observed that Gensol's objection to Gupta's appointment was IRPs “critical,” as Regulation 3(1) of the IBBI Regulations requires IRPs to be independent. While IREDA denied any finalized engagement, the tribunal found that an NDA and other documents “indicate a confidential relationship” with entities linked to the Gensol. Citing precedent, it emphasized that disclosure of such relationships is mandatory.

"The tribunal finds that the undisclosed relationship raised concerns about Gupta's eligibility, necessitating the appointment of an alternative IRP", it had observed.

The tribunal concluded that this undisclosed relationship constituted “a procedural defect under Section 7(3)(b)” and directed that “to avoid conflict of interest, the IRP shall be appointed from the IBBI Panel List,”

During the proceedings before the NCLAT, Gupta submitted that he was not seeking appointment as IRP but sought removal of the adverse remarks that might affect his professional reputation. The Appellate Tribunal noted that Gupta had no opportunity to rebut the allegations before the NCLT and accepted his clarification, while maintaining that the original order admitting  Gensol to insolvency would remain unaffected.

Case Title: Pulkit Gupta v Keshav Khaneja, IRP Gensol Engineering Ltd. & Anr.

Case Number: Comp. App. (AT) (Ins) No. 1335 of 2025 & I.A. No. 5216 of 2025

For Appeallant: Senior Advocate Abhijeet Sinha, with advocate Prateek Khanna, Sanskriti Dixit and Heena Kochar. 

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