Delhi HC orders Gensol, BluSmart to maintain status quo on 175 EVs

Japanese firm Orix lent these EVs to Gensol & Blusmart for ops

The Delhi High Court on Friday restrained ride-hailing firm BluSmart and its promoter Gensol Engineering from creating third-party rights on the 175 electric vehicles (EVs) leased to them by Japanese financial services group Orix. 

 

Orix’s petition was filed under Section 9 of the Arbitration and Conciliation Act, 1996. The section empowers the court to grant interim relief to parties in arbitration proceedings before, during, or even after the arbitral award is made, but before its enforcement. 

 

“Respondents are restrained from creating third-party rights with respect to 175 vehicles,” Justice Jyoti Singh said. 

 

Orix had entered into lease agreements with Gensol Engineering and BluSmart Mobility as part of a green-mobility initiative. Under the agreement, 175 EVs were leased to support BluSmart’s ride-hailing operations in India. In this, Anmol Singh Jaggi, cofounder of Gensol and BluSmart, served as guarantor.

   

Orix has now approached the Delhi High Court, alleging breaches in the agreement. They include a default in lease payment amounting to ₹4 crore. It has sought to prevent Gensol and BluSmart from disposing of leased vehicles.

 

Orix, though its petition filed through Advocate Rajesh Jangra, told the court it intended to start arbitration proceedings in accordance with the dispute resolution clause in the agreements.

 

The court will hear the matter on May 16. Orix’s petition was filed through Advocate Rajesh Jangra.  

 

BluSmart on April 16 had paused cab bookings in certain parts of the National Capital Region, Bengaluru, and Mumbai, the three jurisdictions it operates in. 

 

The rides were halted a day after the Securities and Exchange Board of India (Sebi) debarred the promoters and directors of Gensol Engineering — Anmol Singh Jaggi and Puneet Singh Jaggi — from accessing the securities markets allegedly for fraudulent practices and funds. The regulator also restricted them from holding any key positions in any listed firm.

 

In its interim order, Sebi Whole-Time Member Ashwani Bhatia said: “The promoters were running a listed public company as if it were a proprietary firm. The company’s funds were routed to related parties and used for unconnected expenses, as if the company’s funds were the promoters’ piggy bank.” 

 

According to Sebi, the promoters had diverted large sums for personal luxuries, including the purchase of an apartment at The Camellias in Gurugram, a high-end golf set, and for making personal credit card payments.

 

Gensol Engineering had taken term loans from two government-backed lenders — the Indian Renewable Energy Development Agency (Ireda) and Power Finance Corporation (PFC). Of the loan amount, the company had earmarked ₹663.89 crore for procuring 6,400 electric vehicles (EVs), which were to be deployed at BluSmart. 

 

In a reply to Sebi in February this year, Gensol Engineering admitted it had purchased only 4,704 EVs.