A financial creditor must demonstrate an actual default in compliance with the Insolvency and Bankruptcy Code; mere allegations are insufficient if defaults have been cured.

ORDER

[PER: CORAM]

1. BACKGROUND

1.1 This C.P. (IB) No.596/MB/2025 (Application) was filed on 16.05.2025 by Vivriti Capital Limited, the Financial Creditor (FC), having PAN No.: AAFCV9757P under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 , for initiating Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) in respect of Gensol Electric Vehicles Private Limited, the Corporate Debtor (CD) having CIN No.: U34100PN2022PTC212856.

1.2 As per Part IV of the Application, the amount claimed to be in default as on 28.04.2025 is Rs.3,87,87,657/- (Three Crores Eighty-Seven Lakh Eighty- Seven Thousand Six Hundred Fifty-Seven Rupees), which includes principal outstanding of Rs.3,84,09,247/-, interest accrued of Rs.3,66,522/- and penal amount of Rs.11,888/-. The date of default is stated to be 05.03.2025 in Part IV.

1.3 The Applicant has proposed Mr. Gajesh Labhchand Jain, having Registration No. IBBI/IPA-001/IP-P-01697/2019-2020/12588, to act as the Interim Resolution Professional (IRP).

2. CONTENTIONS OF APPLICANT (FC)

2.1 The Applicant is engaged in the business of credit granting, including financial intermediation activities primarily involving the provision of loans and long-term finance to industries. The CD is a manufacturer and provides electric vehicle (EV) solutions.

2.2 The Applicant, vide a Sanction Letter bearing no. GEVPTL/TL082024/T1 dated 03.08.2024 granted a non-revolving rupee term loan of Rs.5,00,00,000/- @ 15% p.a. interest to the CD, which was to be repaid in 36 monthly instalments. It was also expressly stipulated that in the event of breach of any covenant, undertaking, or representation, or upon the occurrence of an event of default, the CD would be liable to pay penal charges on the outstanding amounts at the rate of 3% per annum. The term loan extended to the CD was to be secured through multiple layers of protection. Firstly, the loan was to be secured by way of hypothecation over all current assets and movable assets of the CD. Secondly, the facility required a cash collateral equivalent to 8.5% of the facility amount, to be maintained as an interest-free security. Thirdly, an additional cash collateral was to be provided in the event of a rating downgrade. Fourthly, further cash collateral was required in the event of any breach of security terms. Fifthly, the CD was required to execute a Demand Promissory Note. Furthermore, as per the terms of the Sanction Letter, the facility was also to be secured by an unconditional and irrevocable personal guarantee from Mr. Anmol Jaggi, along with a corporate guarantee from Gensol Engineering Limited.

2.3 Pursuant to the aforesaid Sanction Letter dated 03.08.2024, the CD, along with its promoters, namely Mr. Anmol Jaggi and Gensol Engineering Limited, executed the following documents in favour of the Petitioner:

a. “Master General Terms Agreement dated 03^rd August 2024:

A Master General Terms Agreement (“MGTA”) was executed between the parties for the purpose of recording the general terms and conditions governing the sanction, disbursement, and administration of the various credit facilities. The MGTA, inter alia, sets out provisions pertaining to:

(a) the creation of security in favour of the Petitioner;

(b) the applicable fees, interest, and other charges; and

(c) the repayment terms for each facility. Each facility granted pursuant to the MGTA was to be extended following a credit appraisal process and would be governed by the terms of a corresponding sanction letter, facility agreement, and other related facility documents to be executed in relation to the specific facility.

b. Facility Agreement dated 03^rd August 2024: In accordance with the Sanction Letter and the MGTA, the parties herein entered into a Facility Agreement dated 03rd August 2024 (“Facility Agreement”), setting out the specific terms and conditions applicable to the Facility.