Delhi HC orders seizure of another 129 EVs tied to Gensol and BluSmart loan

Delhi HC restrains Gensol and BluSmart from selling or transferring 129 hypothecated EVs after STCI Finance alleges ₹15 crore loan default and risk of asset dissipation

The Delhi High Court on Thursday ordered the seizure and relocation of 129 electric vehicles (EVs) hypothecated by Gensol Engineering and ride-hailing startup BluSmart to lender STCI Finance. 

 

Hypothecation refers to using an asset, like a car or stock, as collateral for a loan without transferring ownership or possession to the lender.

 

STCI alleged Gensol and BluSmart had defaulted on a ₹15 crore loan and were seeking to unlawfully dispose of the vehicles. The application, filed by STCI, under Section 12A of the Commercial Courts Act, 2015, sought exemption from instituting preinstitution mediation. 

 

Justice Manmeet Pritam Singh Arora, in her order dated May 8, barred Gensol and BluSmart from creating any third-party rights over the vehicles. Citing an urgent risk of asset dissipation, the court-appointed receivers took custody of the vehicles and authorised them to arrange for their maintenance and charging.

 

“Further the balance of convenience also lies in favour of the plaintiff (STCI) considering that the plaintiff may suffer loss if the possession of the vehicles is not secured and the defendant no.1(Gensol) goes on to dispose of the said vehicles in favour of third parties,” the order said. 

 

Gensol had obtained a ₹15 crore equipment term loan from STCI under a loan facility agreement on October 19, 2023 to acquire the 129 vehicles. 

 

The loan was secured through a hypothecation deed and personal guarantees from promoter brothers Puneet and Anmol Singh Jaggi. 

 

This is the fifth such petition in under two weeks seeking to restrain Gensol and BluSmart from creating third-party rights over its EVs. As of now, the court has restricted them from creating third-party rights over 619 EVs.