Delhi HC Restrains BluSmart From Alienating 175+ EVs Leased From Orix

The Delhi High Court has reportedly restrained BluSmart and Gensol Engineering from alienating or creating third-party rights on 175+ EVs leased to them by Japanese financial services company Orix’s India arm.

As per a report by Bar and Bench, the HC was hearing a petition filed by Orix under Section 9 of the Arbitration and Conciliation Act, 1996. 

“Having heard the learned counsel for the petitioner, respondents are restrained from creating third-party rights with respect to 175 vehicles,” the report quoted Justice Jyoti Singh as saying. 

The Japanese company’s India arm provides flexible financing solutions to corporates for leasing cars. While much isn’t known about the transaction with BluSmart, Orix had entered into lease agreements with Gensol and the EV ride-hailing startup as part of a green mobility initiative. 

The report added that the company moved the HC against the Anmol Singh Jaggi and Puneet Singh Jaggi-led companies alleging breach of contractual terms, including default in lease payments. Besides, Orix is also firming up plans to initiate arbitration proceedings against the defaulting companies. 

The Delhi HC’s interim order adds to the troubles of BluSmart and Gensol, which have been hit by allegations of financial misconduct by the Jaggi brothers. The heat on the two companies seems to be intensifying on a daily basis. For instance, just late last night it was reported that BluSmart cofounder Puneet was detained by the Enforcement Directorate (ED) from a hotel in New Delhi. His brother Anmol is said to be in Dubai as of now.

The troubles began after SEBI, in an interim order earlier this month, said that the brothers misutilised and diverted the listed company’s funds. The markets regulator barred the Jaggi brothers from holding the position of director or key managerial personnel of the troubled Gensol. 

The departures weren’t restricted to the Jaggi brothers, as independent directors Harsh Singh, Kuljit Singh Popli, and Arun Menon also resigned from their roles shortly after SEBI issued its order. 

Gensol availed loans from the Power Finance Corporation and Indian Renewable Energy Development Agency (IREDA) to procure EVs for BluSmart and EPC contracts. However, the funds were alleged to have been diverted to pay up for a flat in DLF’s ‘The Camellias’, invest in Ashneer Grover’s ‘Third Unicorn’, foreign trips, among other things.

Amid all these, the EPC company’s share price has plummeted about 90% over the last couple of months. From around INR 750 at the end of the month of January, Gensol’s shares ended today’s trading session at an all-time low of INR 91.05.

Meanwhile, the whole crisis has left BluSmart in shambles, with questions over its future. Days after SEBI released its interim order, BluSmart suspended its cab services in all the cities it operates in. 

Last week, Inc42 reported that PE firm Eversource was in talks to acquire the ride-hailing startup for around INR 800 Cr to INR 1,000 Cr, about 60% less than its last known private valuation.

Earlier this week, it was reported that the startup has roped in Grant Thornton to conduct a forensic audit of its books.