The Delhi High Court on Thursday directed the seizure and relocation of 129 electric vehicles (EVs) financed by STCI Finance Ltd, after the lender alleged that Gensol and BluSmart had defaulted on a ₹15 crore equipment loan and were attempting to unlawfully dispose of the hypothecated assets.

The vehicles were leased by Gensol to a related group entity that has since ceased operations. Justice Manmeet Pritam Singh Arora observed an urgent risk of asset dissipation and appointed court receivers to take possession of the vehicles, citing the plaintiff’s potential for significant loss.

"The Plaintiff may suffer loss if the possession of the Vehicles is not secured and the Defendant No.1 goes on to dispose of the said Vehicles,” the Court noted, while referring to STCI's plea.

STCI had granted Gensol the ₹15 crore loan under a facility agreement dated October 19, 2023, for the acquisition of 129 EVs for commercial leasing. The loan was backed by a hypothecation deed and personal guarantees from promoters Puneet Singh Jaggi and Anmol Singh Jaggi. Funds were disbursed directly to vendors, following which the vehicles were leased to BluSmart—a related entity which is now non-operational.

The lender recalled the loan on April 29, 2025, citing defaults and credit downgrades, and claimed outstanding dues of ₹11.25 crore. STCI also relied on SEBI’s interim order dated April 15, which found that Gensol’s promoters had misused and diverted company funds in violation of corporate governance norms. The Court noted SEBI's finding that Gensol’s promoters treated company funds like a "proprietary firm" and rerouted institutional borrowings for unrelated uses.

Taking these findings into account, the Court allowed STCI to bypass the mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, due to the “imminent risk of dissipation” of the assets.

Key Directions Issued by the Court:

• Receivers Appointed: Tarang Gupta, Mansi, and Pavitra Kaur were appointed to take over the 129 vehicles, inventory them, and relocate them to secure locations.

• Operational Support: STCI representatives were authorised to assist in Delhi, Gurugram, and Bengaluru, with local police help permitted if needed.

• Vehicle Preservation: Receivers were empowered to ensure maintenance and charging to prevent asset deterioration.

• Asset Restraint: Gensol and the leasing entity were restrained from selling, transferring, or creating third-party rights over the vehicles.

• FD Status Quo: ICICI Bank was directed to maintain status quo on a fixed deposit of ₹40.62 lakh separately hypothecated by Gensol.

The depreciated value of the vehicles as of March 31, 2025, was estimated at ₹11.19 crore.

STCI Finance was represented by advocates Tanmay Mehta, Atul Sharma, Abhinav Mukhi, Abhishek Srivastav, Manisha Arora, Shantanu Tomar, and Vasu Vats.

Background and Related Proceedings:

This is not the first such action involving Gensol. On May 7, the High Court restrained Gensol and BluSmart from alienating 220 vehicles belonging to lessors Smas Auto Leasing and Shefastaq OPC. In another case last week, the Court appointed a receiver for 95 EVs leased to BluSmart by Clime Finance and restrained Gensol from creating third-party interests.

Similarly, on April 25, the Court barred Gensol and BluSmart from disposing of or encumbering 175 vehicles leased by Japanese financial firm Orix.

SEBI has also issued a show-cause notice to Gensol for alleged corporate governance violations, including non-disclosure of related-party transactions with BluSmart and other group entities.