The Delhi High Court has barred Gensol Engineering Ltd and BluSmart Mobility Pvt Ltd from selling, transferring, or creating third-party rights for 95 electric vehicles (EVs) leased to them by climate finance company Clime Finance Private Limited.
Justice Jyoti Singh, while issuing a notice to Gensol, BluSmart, and their promoters on Tuesday, directed said a court-appointed receiver would take custody of the EVs to ensure their upkeep, especially battery maintenance. No one appeared for Gensol at the hearing.
“This court deems it appropriate to appoint a receiver, who shall take charge of the vehicles and ensure that they are properly charged to avoid drainage of the batteries,” the court said. However, the cars will not be moved from their current locations.
The court also ordered the EV company not to obstruct the receiver’s work. “In case of any obstruction, it will be open to the receiver to take police assistance from the local police station, which shall render full cooperation,” the court said. The receiver’s fee was fixed at ₹5 lakh, with a mandate to submit periodic reports on the condition and upkeep of the vehicles.
Alleged default on lease payments
Clime Finance moved the high court under the Arbitration and Conciliation Act on Tuesday, saying it had leased 95 Tata Xpres-T electric vehicles to Gensol entities in 2022 for cab and ride-share services for three years. Clime said Gensol and BluSmart had defaulted on lease payments, due in March 2025.
It also raised concerns that BluSmart had ceased operations, putting the fleet at risk. Clime asserted that its contracts allowed it to repossess the vehicles in the event of a default. The company claimed “absolute and paramount rights” over the EVs, saying the leases stood terminated.
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“These leases have been terminated, and Sebi has also initiated an inquiry against the respondent, Mr. Puneet Jaggi. I am requesting that, until the matter is resolved, they be restricted from alienating or dealing with the vehicles,” Clime’s counsel told the court.
“These are electric vehicles, and if their batteries are not maintained, they will get drained, causing irreversible damage… I’m not requesting possession at this stage, but at least the receiver should take adequate steps to preserve the cars,” he added.
The court will hear the case next on 24 July.
Second blow in a week
This is the second legal blow in a week for Gensol and BluSmart over leased EVs. On 25 April, Justice Jyoti Singh barred the firms from creating third-party rights for 175 electric vehicles leased to them by Japanese financial services firm Orix, which alleged that Gensol breached lease terms and failed to make payments.
Founded in 2019 by Anmol Singh Jaggi, Puneet Singh Jaggi, and Punit K Goyal, BluSmart positions itself as India’s first all-electric ride-hailing platform. As of January, it claimed a fleet of more than 8,500 EVs, 5,800 charging points across 50 hubs, and more than 10,000 active drivers.
Sebi recently issued a show-cause notice to the company over alleged governance lapses, including undisclosed related-party transactions and alleged financial irregularities. The markets regulator also barred the Jaggi brothers from holding key managerial roles in any listed entity and restricted both Gensol and its promoters from accessing capital markets.
Alleged misuse of loans
Gensol is also under scrutiny for its handling of approximately ₹978 crore of loans from Power Finance Corporation (PFC) and Indian Renewable Energy Development Agency (IREDA), meant for procuring 6,400 EVs. Disclosures suggest only 4,704 vehicles were actually purchased.
PFC has filed a complaint with the Economic Offences Wing of the Delhi police, alleging submission of falsified documents. IREDA, believed to have funded 3,400 of the EVs, may be more than 1,400 vehicles short, based on regulatory filings.
Mint previously reported that PFC was exploring legal recourse, including proceedings in insolvency courts and debt recovery tribunals, to recover its dues.
Meanwhile, BluSmart has temporarily shut down its app, notifying users that bookings have been paused until 7 May. In an email to customers, the company promised refunds within 90 days if services remained suspended beyond that date.
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