The Gensol-BluSmart saga: Delhi HC orders seizure of 76 more electric vehicles

Gensol Engineering Ltd and ride-hailing startup BluSmart have lost control of another leased 76 electric vehicles after the Delhi High Court ordered seizure of the cars and barred the companies from transferring or selling them.

Justice Jasmeet Singh, acting on a plea by investment firm Vriksh Advisors, on Thursday restrained Gensol, BluSmart, and their promoters from selling, alienating, or creating any third-party rights over the 76 Tata Tigor electric cars. 

The High Court’s latest order is the fifth such in under three weeks, bringing the total number of Gensol and BluSmart leased EVs under judicial protection to 698.

The court also appointed a receiver to take possession of the vehicles and ensure their safety.

“Issue notice. For the reasons stated, Respondent No. 1 (Gensol Engineering Ltd), its shareholders, directors including Respondent No. 2 (Anmol Singh Jaggi) and other officers, are restrained from selling, alienating, transferring, encumbering, or creating third-party rights in the 76 Tata Tigor EVs owned by the petitioner, until the next date of hearing. The petitioner shall have the right to repossess the vehicles in case of default,” the court said.

Vriksh Advisors had leased the vehicles to Gensol under an agreement signed in August 2023. The agreement was executed by Gensol’s promoter-directors, Anmol Singh Jaggi and Puneet Singh Jaggi.

The lessor alleged that Gensol defaulted on its lease rental obligations and raised concerns over ongoing investigations and fraud allegations involving the company and its promoters. Fearing misuse or dissipation of assets, Vriksh approached the High Court seeking protection of its leased fleet.

Also read | State-run lenders for Gensol’s cars dither on what to do next

The court noted that Gensol and its promoters are under multiple investigations related to alleged fraud and financial mismanagement. Referring to Mint’s 24 April report, the court recorded: “Report in news agency Mint stated that R3 (Puneet Jaggi), a promoter-director of Gensol Engineering Ltd (R1), has been detained by the Enforcement Directorate in connection with alleged illegal foreign exchange transactions undertaken by R1 (Gensol).”

Justice Singh also observed that the petitioner had been recently made aware of allegations of fraud, mismanagement, and siphoning of funds by Gensol and its key promoters, which had also triggered credit rating downgrades. The court further took note of Gensol’s failure to pay the lease rentals for April.

According to the court, it passed the order in favour of repossession as the facts presented by the lessor created a “reasonable apprehension” that Gensol may dispose of or create third-party rights over the leased assets.

The court also sought responses from Gensol and its promoters. The matter is slated for further hearing on 29 July.

Also read | BluSmart investors look to buy promoters’ stake, revive the ride-hailing company

Previous seizure orders

• On 8 May, the Delhi High Court ordered the seizure of 129 EVs leased by Gensol and BluSmart based on a plea by STCI Finance, which accused the companies of defaulting on a ₹15 crore loan.
• On 7 May, the court barred the firms from creating third-party rights over 220 EVs leased by SMAS Auto Leasing India Pvt. Ltd and Shefasteq OPC Pvt. Ltd. Both lessors alleged lease violations and defaults in rental payments.
• On 25 April, the court restrained the sale or transfer of 175 EVs leased by Orix India, citing similar concerns of misuse and non-payment.
• On 29 April, the court passed a similar order protecting 95 EVs leased by Clime Finance Pvt. Ltd, bringing additional leased assets under judicial watch.

Gensol’s mounting financial and regulatory pressure

The Securities and Exchange Board of India (Sebi) has issued a show-cause notice to Gensol and barred its promoters Anmol Singh Jaggi and Puneet Singh Jaggi from holding key positions in any listed company or accessing capital markets, citing corporate governance violations and financial irregularities, including undisclosed related-party transactions.

Additionally, Gensol is under investigation over its use of ₹978 crore in loans disbursed by Power Finance Corporation (PFC) and Indian Renewable Energy Development Agency (Ireda) to finance 6,400 EVs. Company filings show that only 4,704 vehicles were procured.

On 14 May, Ireda announced that it had filed an insolvency plea against Gensol before the National Company Law Tribunal (NCLT), citing fraud and default.

Earlier, PFC filed a complaint with the Economic Offences Wing of Delhi Police, alleging that Gensol used forged documents to secure loans. Ireda, which funded 3,400 EVs, may be short over 1,400 vehicles based on current disclosures.

Also read | Gensol won many PSU contracts. Here's what happens to them