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Informist, Tuesday, Apr. 29, 2025

 

--HC bars Gensol Engg, BluSmart from creating 3rd-party rights in 95 EVs 

--CONTEXT: HC hearing Clime Finance plea against Gensol Engg, BluSmart 

--CONTEXT: Clime Finance against Gensol Engg, BluSmart defaulting lease pay 

--HC appoints receiver to secure, inspect 95 EVs leased by Clime Finance 

 

NEW DELHI - The Delhi High Court on Tuesday restrained Gensol Engineering Ltd., Blu-Smart Fleet Pvt. Ltd. and Blu-Smart Mobility Pvt. Ltd. from creating third-party rights in respect of 95 Tata Xpres Electric Vehicles leased by Clime Finance Ltd. The court appointed a receiver to secure, preserve, inspect, and take immediate possession of the 95 electric vehicles. The receiver will, however, only take "deemed" charge of the electric vehicles and not move them from their existing spot, said the court. Receiver is now responsible for the upkeep of the vehicles, the court added.

 

The case has its genesis from a lease agreement, where the 95 electric vehicles were leased to the respondent in 2022 by Clime Finance for use in cab and rideshare services for a period of 36 months, which was to expire in May 2025. The respondents defaulted in remitting the lease rentals for the 95 vehicles from March, the petitioner said. This default, along with a downgrade in Gensol Engineering's credit rating, media reports of financial distress, and breaches of lease agreement, prompted the petitioner to issue notices in March and April, also went unanswered, Clime Finance alleged.  

 

Earlier this month, the Securities and Exchange Board of India said it was probing Gensol Engineering and its promoters for diverting loans taken from Power Finance Corp. Ltd. and Indian Renewable Energy Development Agency Ltd. The regulator also issued an interim order against the company and its two promoter-directors, Anmol Jaggi and Puneet Singh Jaggi, barring them from any securities market-related activity and from holding the post of director or any key managerial position in the company till further orders. Gensol and Blu-Smart companies share the same co-founders Anmol Jaggi and Puneet Singh Jaggi. 

 

The petitioner discovered that the respondents were attempting to not only siphon its funds but also transfer their ride-sharing business, including the leased electric vehicles, to third parties without its consent. In view of the above, the petitioner was compelled to issue a notice to the respondents terminating the lease agreement due to the several non-compliances and material defaults of the terms and conditions.

 

Further, the petitioner sought pre-termination value, penal charges and tax deducted at source due for FY2024-2025 after adjustment of security deposit of INR 10.07 million. In terms of the lease agreement, the respondents are obliged to surrender the electric vehicles to them, said the petitioner.

 

SEBI said it had found prima facie that a loan of INR 967 million from PFC taken by Gensol Engineering "was diverted to promoter and promoter-linked entities, bypassing the stated end-use of the PFC loan". The regulator also found that INR 375 million out of a total loan of INR 1.71 billion taken by Gensol Engineering's subsidiary, Gensol EV Lease, from IREDA was transferred to Anmol Jaggi. "This aspect needs further examination," it said in the interim order. As a result, BluSmart halted operations, and the company could also not pay lease rentals to Gensol Engineering.

 

Last week, the Enforcement Directorate conducted searches at Gensol Engineering's premises in Delhi, Gurugram in Haryana, and Ahmedabad in Gujarat and detained Puneet Jaggi from a hotel in Delhi. The raids were conducted under provisions of the Foreign Exchange Management Act.

 

At 1205 IST, shares of Gensol Engineering were down 5.0% at INR 81.36 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Vandana Hingorani

 

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