Delhi HC Orders Seizure Of 129 BluSmart Vehicles

The Delhi High Court has ordered seizure and relocation of 129 electric vehicles leased by Gensol Engineering to ride-hailing startup BluSmart, following a petition by lender STCI Finance Ltd.

STCI Finance, one of the lenders of the EPC company, filed a suit against Gensol, seeking to recover INR 11.25 Cr and also restraining the latter from creating any third party rights or interest for the EVs mentioned above.

STCI Finance and Gensol had signed a loan facility agreement back in 2023 where the former had granted an equipment term loan to the tune of INR 15 Cr for the purchase of the 129 EVs.

A court order passed by Justice Manjeet Pritam Singh Arora yesterday says, “The plaintiff may suffer loss if the possession of the vehicles is not secured and the defendant No.1 goes on to dispose of the said vehicles in favour of third parties.”

The court has directed the lender to take custody of the vehicles to secure the amount due and payable mentioned in the agreement. The order states that the tentative value of the secured vehicles comes to about INR 11.19 Cr after accounting for depreciation as per the Income Tax Act.

As per the cited facility agreement signed, STCI Finance has the right to seize and take into custody the said EVs in discussion in case the borrower defaults on the payment of the loan. Representatives of STCI Finance namely Tarang Gupta, Mansi and Pavitra Kaur are designated as receivers of the EVs.

Along with restricting Gensol from creating third party rights, the court has also directed ICICI Bank to not allow the liquidation of a fixed deposit of INR 40.62 Lakh which was separately hypothecated by Gensol as security for the loan.

The story was first reported by Bar and Bench.

The development comes two days after the Delhi HC had barred Gensol and the ride-hailing startup BluSmart from creating third-party rights over 220 additional EVs in a separate order.

Corporate Governance Lapses At Gensol 

It was last month when the hidden truths of misappropriating company funds and gaps in corporate governance came to light at Gensol. A 29-page interim order by SEBI stated that the promoters misutilised Gensol’s funds in a fraudulent manner and treated the capital as their piggybank.

The order stated that the EPC company had taken a loan of INR 977 Cr from lenders, including PFC and IREDA, both government-led NBFC entities. The company was supposed to deploy INR 663.89 Cr to procure 6,400 EVs to be leased to BluSmart, founded by Jaggi brothers.

To be sure, the founders purchased only 4,704 EVs out of 6,400 and about INR 262.13 Cr were missing from the books of the company. The initial findings by the regulator states that these funds were diverted by the promoters to buy a luxurious property in DLF’s ‘The Camellias’, for buying expensive golf kits and also investing in Ashneer Grover’s ‘Third Unicorn’.

Currently, the Jaggi brothers have been barred from taking any key managerial position at Gensol. Reportedly, Anmol Jaggi has been on a run and is speculated to be in Dubai, while Puneet Jaggi, seeking an anticipatory bail from the Delhi HC entirely blamed his brother for the misconduct happening in Gensol and said that ‘he was merely a director for name’s sake and day-to-day operations at the EPC company were led by his brother.’

Meanwhile, BluSmart investors, namely bp Ventures and responsAbility Investments, are seeking an infusion of $30 Mn to restart operations.