The Delhi High Court has stopped Gensol and BluSmart from creating third-party rights over 175 EVs leased by Orix. This comes amid lease payment defaults and rising regulatory scrutiny on Gensol.
New Delhi: In a recent legal development, the Delhi High Court has stopped Gensol Engineering Limited and BluSmart Mobility from selling, transferring, or giving rights to others over 175 electric vehicles. These vehicles were given to them by Orix Corporation, a well-known Japanese financial services and leasing company.
This decision was made by Justice Jyoti Singh after hearing a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996. The petition was filed by Orix Corporation asking for urgent protection regarding the vehicles.
The Judge clearly said during the hearing,
“Having heard the learned counsel for the petitioner, respondents are restrained from creating third-party rights with respect to 175 vehicles.”
As of now, the official written order from the Court is still awaited.
Orix had earlier signed lease agreements with both Gensol Engineering and BluSmart Mobility. The aim was to support clean and green transportation in India. Under this agreement, Orix leased 175 electric vehicles to BluSmart, which runs India’s first all-electric taxi service.
These EVs were used for their ride-hailing business, which is different from regular taxi companies. In BluSmart’s model, drivers don’t own the cars. Instead, BluSmart leases the vehicles, pays the drivers a salary, and manages everything, including charging stations and car maintenance.
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The co-founder of both Gensol and BluSmart, Anmol Singh Jaggi, was also made a guarantor under the lease agreements.
But now, Orix says that Gensol and BluSmart have not followed the terms of the lease. They say there have been defaults in lease payments and other violations of contract rules. Because of this, Orix went to the Delhi High Court asking for help to make sure Gensol and BluSmart do not sell or transfer the vehicles to someone else. Orix also told the Court that it plans to start arbitration based on the dispute resolution terms mentioned in the lease agreement.
While this legal matter is going on, Gensol Engineering is also facing problems with SEBI – India’s top market regulator. SEBI has sent a show-cause notice to Gensol for breaking corporate governance rules.
These include not reporting business deals with BluSmart and other related companies, which they were supposed to share.
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SEBI is also checking if Gensol gave the right financial details in its reports. There are doubts about how they counted their revenues and about not clearly showing all their liabilities. According to sources, SEBI found several related-party transactions that were not shared properly, and these might have wrongly increased the company’s financial position.
Because of these serious concerns, SEBI has also temporarily banned some officials from Gensol from trading in the stock market until the investigation is over. This situation has affected the trust of investors, and Gensol’s stock prices have been very unstable recently.
Now, with this Court order and SEBI’s actions, Gensol and BluSmart are both under heavy pressure. Meanwhile, Orix is getting ready to start formal arbitration against both companies.
Orix Corporation is being represented by Advocates Rajesh Jangra, Shankar Sen, and Khush Gupta in this legal case.
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