The NCLAT has dismissed an appeal by two suspended directors of Log 9 Mobility, upholding an order to help recover 100 electric vehicles leased from Gensol EV Lease Ltd. The ruling reaffirms the power of insolvency tribunals to compel suspended management to assist in asset recovery during resolution proceedings.
The National Company Law Appellate Tribunal (NCLAT) has officially dismissed an appeal filed by two suspended directors of Log 9 Mobility. This decision reinforces an earlier directive from the National Company Law Tribunal (NCLT) Ahmedabad, which had ordered the directors to cooperate with the resolution professional to recover 100 electric vehicles leased from Gensol EV Lease Ltd.
Both companies are currently undergoing the Corporate Insolvency Resolution Process (CIRP). Log 9 Mobility entered insolvency proceedings on September 15, 2025. The legal dispute centered on the recovery of the leased vehicles from the company's facility in Faridabad, which the resolution professional needed to secure as part of the asset resolution process.
Tribunal Upholds Insolvency Powers
The suspended directors had argued that they should not be held responsible for the recovery of the vehicles because they claimed to have no direct contractual relationship with Gensol EV Lease Ltd. They also questioned the authority of the NCLT to force them to participate in the resolution process of another company. However, the three-member NCLAT bench rejected these arguments.
The tribunal cited Section 60(5) of the Insolvency and Bankruptcy Code (IBC), which grants broad powers to the NCLT. The NCLAT clarified that directors, even when suspended, maintain a duty to assist the resolution professional in identifying and handing over company assets. The court noted that these responsibilities are essential to ensure the insolvency process functions correctly and that assets are not lost or improperly managed during the transition.
Importance of Management Cooperation
The NCLAT also pointed to conflicting statements made by the directors earlier in the proceedings. Records showed that on July 4, 2026, the directors had informed the NCLT that they had already provided the necessary inventory and location details regarding the leased vehicles to the resolution professional. This earlier submission weakened their later argument that they were not involved or unable to provide assistance.
This case highlights the legal risks and operational complexities involved when multiple entities go through simultaneous insolvency. For stakeholders, the ruling serves as a reminder that management personnel cannot evade their obligations to support the resolution professional during an active CIRP. The focus now remains on the successful identification and transfer of the vehicles to ensure the resolution of the assets involved in the case.