The Delhi High Court has ordered the seizure and relocation of 129 electric vehicles (EVs) leased by Gensol Engineering and its affiliated ride-hailing startup, BluSmart. This action follows allegations by STCI Finance that the companies defaulted on a ₹15 crore equipment loan and attempted to unlawfully dispose of the financed assets.
The latest court directive (issued on May 8) mandates the immediate seizure of the EVs and their relocation outside the National Capital Territory (NCT) of Delhi. This measure aims to prevent further unauthorized use of the vehicles within the city. The court highlighted that any breach of this order could lead to contempt proceedings.
The Delhi HC also appointed receivers to take custody of the vehicles and authorized them to arrange for their maintenance and charging to prevent deterioration. Additionally, the court barred Gensol and BluSmart from creating any third-party rights over the vehicles. ICICI Bank was also directed to maintain the status quo on a fixed deposit of ₹40.62 lakh, which was pledged as security for the loan.
Previously, between 25 April and 7 May, the court issued multiple orders barring Gensol, BluSmart, and their promoters from transferring or creating third-party rights over a total of 622 leased EVs from various financiers, placing all under judicial protection.
These legal actions are part of a larger financial scandal involving Gensol Engineering and BluSmart. The Securities and Exchange Board of India (SEBI) recently barred Gensol’s promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from holding directorships and accessing public markets. Notably, central to the controversy is the alleged misuse of about ₹977 crore loan taken by Gensol Engineering to procure 6,400 electric vehicles.
The company admitted to buying only 4,704 EVs worth around ₹567 crore, leaving a shortfall of 1,696 vehicles. With an expected price (including an additional 20% equity contribution) of about ₹829 crore, nearly ₹262 crore remains unaccounted for, triggering major financial concerns.
SEBI alleges that BluSmart co-founder Anmol Singh Jaggi redirected around ₹25 crore from Gensol to personal accounts and related entities, including a transfer to Third Unicorn (a startup founded by Ashneer Grover). Recently, the Ministry of Corporate Affairs reportedly launched a direct investigation into Gensol and BluSmart under Section 210 of the Companies Act, skipping preliminary inspection due to serious governance concerns.
Last month, the Institute of Chartered Accountants of India began independently reviewing the financial statements and auditor reports of Gensol and BluSmart for FY 2023-24 through its Financial Reporting Review Board, citing suspected irregularities. In fact, the Enforcement Directorate also launched a separate probe into potential violations of the Foreign Exchange Management Act, with a focus on suspicious cross-border financial transactions.
Meanwhile, in response to the controversy, two independent directors – Harsh Singh and Kuljit Singh Popli – resigned from Gensol’s board, citing concerns over the company’s governance issues. Also, BluSmart (which operates an all-electric fleet of over 8,000 taxis across major cities) suspended its operations following SEBI’s investigation.
