NCLAT Orders NCLT to Review Plea from Former Gensol Engineering Director Harsh Singh

The National Company Law Appellate Tribunal (NCLAT) has instructed the National Company Law Tribunal (NCLT) to address a plea by Harsh Singh, a former independent director of Gensol Engineering. Singh is challenging an investigation order against him and others linked to the company. The appellate tribunal's directive came on June 16, granting Singh two days to file a vacation application for a stay on the NCLT's decision.

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Singh, who resigned from Gensol Engineering's board following allegations by SEBI against its co-founders for fund misuse, argues that as an independent director, he should not be held accountable for board decisions. He contends that the NCLT issued harsh directions without giving him a chance to be heard, despite his role as a practising advocate.

NCLAT's Directive and Singh's Challenge

The NCLAT stated that if Singh files his application within the given timeframe, the NCLT must address it according to legal procedures, ensuring all parties are heard. The tribunal noted that Singh could submit objections or seek to vacate the interim order within two days, considering all grounds previously presented.

On May 28, 2025, the Ahmedabad bench of the NCLT ordered an investigation into individuals associated with Gensol Engineering. This included current and former directors, key managerial personnel, and other officials. Singh challenged this order before the NCLAT, arguing it was unjust without his input.

Investigation Orders and Insolvency Proceedings

The NCLT's order also led to insolvency proceedings against Gensol Engineering and Gensol EV Lease. The Indian Renewable Energy Development Agency (IREDA) filed petitions resulting in interim resolution professionals being appointed for both companies. Their boards were suspended due to financial distress.

Gensol is involved in developing projects related to renewable energy and energy efficiency. The company's financial troubles prompted these legal actions, highlighting significant challenges in managing its operations effectively.

A two-member bench of the appellate tribunal acknowledged the case's importance but decided not to interfere with the NCLT's interim order. They emphasized that Singh had already appeared before the tribunal and could file objections or applications regarding the stay within a short period.

The tribunal reiterated that any application filed by Singh would be considered by the NCLT, which would then issue a reasoned order after hearing all concerned parties. This ensures that due process is followed in addressing Singh's objections and applications related to the investigation.

This legal development underscores ongoing scrutiny of corporate governance practices within Gensol Engineering. It also highlights regulatory efforts to ensure accountability among company officials amid financial challenges faced by firms in India's renewable energy sector.

With inputs from PTI