Delhi HC Bars Gensol, BluSmart from Transferring 220 Leased EVs, Appoints Receivers

The Delhi High Court on Wednesday restrained Gensol Engineering and BluSmart Mobility from selling or transferring 220 additional electric vehicles leased from Smas Auto Leasing India Pvt Ltd and Shefastaq OPC Pvt Ltd, appointing receivers to ensure their upkeep.

The court declined to permit the lessors to repossess the vehicles, as such relief exceeds the scope of Section 9 of the Arbitration and Conciliation Act 1996, which allows only interim measures to preserve assets pending arbitration.

Justice Jyoti Singh issued a ruling appointing court receivers to take control of the automobiles. However, the court denied the lessors’ request for repossession, stating that such relief is not permissible under Section 9 of the Arbitration and Conciliation Act 1996, under which the petitions were filed.

The court also directed Gensol to submit a status report on the leased electric vehicles within two days, following concerns raised by the lessors about their whereabouts. Additionally, Gensol and BluSmart were ordered to provide a detailed disclosure of their assets and liabilities.

During the hearings, senior advocate Rajshekhar Rao, representing Smas, argued that the parties signed lease agreements in 2021 and 2022 for the lease of automobiles. He requested that the lessor take custody of the cars, as the receivers may lack the resources to maintain them. He stated that if electric vehicles (EVs) are not properly maintained, their lifespan will be limited. Rao also claimed there are news reports indicating the vehicles are being subleased to third parties.

BluSmart Cabs Lease Dispute

The Delhi High Court previously appointed a receiver to take custody of 95 electric vehicles leased to BluSmart Cabs by Clime Finance Pvt Ltd. The receiver is tasked with ensuring the maintenance of these EVs, particularly their battery upkeep. The court also prohibited Gensol Engineering, which is facing financial difficulties, from creating third-party rights over the fleet.

“This court deems it appropriate to appoint a receiver, who shall take charge of the vehicles and ensure that they are properly charged to avoid drainage of the batteries,” Justice Jyoti Singh stated while issuing the order in court today.

She further clarified that the court-appointed receiver will not relocate the vehicles from their current parking locations and will only assume deemed custody, as reported by Bar & Bench.