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Mahindra & Mahindra Financial Services Wins Partial Relief: Orders Return of 10 Leased EVs
The ) on partly allowed an application by seeking possession of 17 electric vehicles (EVs) allegedly retained by after its admission into . A division bench comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma directed the Resolution Professional (RP) to hand over 10 of the vehicles to MMFSL, holding that the under does not shield assets that do not belong to the corporate debtor.
A Lease Terminated Before Insolvency
The dispute traces back to three lease agreements executed between MMFSL and the Gensol group between 2021 and 2023, under which 419 electric vehicles were financed and leased to and . After the lessees defaulted, MMFSL issued on —nearly three months before Gensol was admitted into CIRP on .
By the time CIRP commenced, MMFSL had already repossessed 291 of the 419 vehicles. However, 128 vehicles remained unrecovered, including 17 that MMFSL claimed were still in Gensol’s possession. The applicant approached the under read with Rule 11 of the Rules, 2016 , seeking disclosure of the vehicles’ location and restoration of possession.
The Allegation
The RP, Keshav Khaneja , initially resisted the claim, citing a competing assertion by . IREDA contended that the 17 vehicles formed part of Project No. 2583, financed under a Facility Agreement and Deed of dated , and that it held a prior and valid over them. IREDA also argued that during the was impermissible under Section 14(1)(d) of the , which bars recovery of property in the possession of the corporate debtor.
MMFSL, in response, produced a detailed documentary chain: purchase orders, tax invoices, proof of payment, insurance policies, delivery gate passes, and registration certificates from the Vahan portal—all showing MMFSL as the owner or financier. The dealer, , confirmed that MMFSL had issued Purchase Order No. 2412 on and paid the entire consideration of ₹14.99 crore in three tranches for 112 vehicles, including the 17 in dispute.
Physical Verification Settles the Dispute for 10 Vehicles
The Tribunal ordered an independent verification through the . Physical records obtained from the for 10 of the 17 vehicles—including Forms 20 and 34, invoices, and insurance documents—consistently showed MMFSL as the . For the remaining seven vehicles, the RTO could not trace the physical records, and the vehicles themselves could not be located despite the RP’s efforts.
The bench noted that IREDA’s documents suffered from : its alleged invoices were dated and registration certificates , yet the vehicles were manufactured only in and registered in . This, the court observed, “requires caution in placing reliance upon such documents for establishing a specifically over the subject vehicles.”
Does Not Create Ownership
Addressing IREDA’s argument, the Tribunal made a critical observation:
“The is intended to preserve the legal and factual position of the Corporate Debtor and its assets during CIRP. It does not, by itself, create ownership or proprietary rights in favour of the Corporate Debtor over .”
The court further held that where an asset is found not to be part of the corporate debtor’s estate, it cannot be retained merely because it is in . Since the lease agreements had been terminated prior to CIRP , Section 14(1)(d) did not apply.
Decision: Partial Relief with Continued Tracing
The partly allowed IA/1294(AHM)/2025, declaring that the 10 traced vehicles shall not be treated as assets of Gensol during CIRP. The RP was directed to hand over within 15 days , after preparing an inventory and verifying registration and chassis numbers. The transportation costs are to be borne by MMFSL.
For the remaining seven untraced vehicles (registration numbers DL52GD3337, DL52GD3350, DL52GD3371, DL52GD3405, DL52GD3454, DL52GD3445, and DL52GD3476), the RP must continue efforts to trace them and preserve them if found, with MMFSL entitled to seek possession thereafter.
The court clarified that the order does not finally adjudicate the between MMFSL and IREDA, and IREDA’s independent claims against Gensol remain unaffected. Notably, the Tribunal also directed the registry to forward a copy of the order to the and IREDA for possible action regarding the alleged and fund diversion, referencing a pending company petition (No. 33 of 2025) filed by the under .
Implications for CIRP and Asset Ownership
The ruling reinforces that under Section 14 is not a for assets belonging to third parties. Lessors who terminate agreements before CIRP may reclaim their assets, provided they can establish ownership through verifiable documentary evidence. The decision also underscores the duty of the resolution professional to diligently trace and verify assets—and to hand over those that clearly do not belong to the corporate debtor, even in the face of competing claims.
With the government’s investigation into Gensol’s fund diversion still pending, this partial victory for MMFSL may be only one chapter in a larger forensic saga.
