**Gensol Engineering and BluSmart Face Legal Challenges Over EV Leases**
In a significant legal development, Gensol Engineering Ltd and electric ride-hailing startup BluSmart have encountered another setback as the Delhi High Court has prohibited them from establishing third-party rights over 220 additional electric vehicles (EVs) leased from two different lessors. Justice Jyoti Singh issued this ruling while appointing court receivers to take possession of the vehicles. However, the court declined the lessors’ request for repossession, indicating that such relief does not fall under Section 9 of the Arbitration and Conciliation Act, 1996, which governs the petitions filed.
The court has also instructed Gensol to provide a status report on the leased EVs within two days, following concerns raised by the lessors regarding the vehicles’ locations. Furthermore, both Gensol and BluSmart are required to submit a detailed statement of their assets and liabilities.
This order comes in response to petitions filed by SMAS Auto Leasing India Pvt. Ltd and Shefasteq OPC Pvt. Ltd, which have accused Gensol, BluSmart, and their promoters of violating lease agreements and failing to meet payment obligations. According to court documents, SMAS Auto leased 164 EVs to Gensol and 46 to BluSmart under separate master lease agreements, while Shefasteq claimed to have leased an additional 10 EVs. Both lessors allege that the companies have not made timely payments for lease rentals and fleet management charges, despite receiving monthly invoices and having binding contractual obligations.
The SMAS petition highlighted the unlawful possession of the EVs by the respondents, prompting the need for immediate appointment of a Receiver to take custody of the vehicles. The petition emphasized the sensitivity of EV batteries, which require regular monitoring and operational use to prevent irreversible damage, particularly in extreme heat conditions.
This ruling marks the third decision from the same bench in less than two weeks. On April 25, Justice Singh had already restrained the companies from creating third-party rights over 175 EVs leased from Japanese financial services firm Orix. Subsequently, on April 29, the court prohibited BluSmart from selling or transferring 95 EVs leased from Clime Finance Pvt Ltd. With this latest order, a total of 493 leased electric vehicles are now under judicial protection, preventing Gensol and BluSmart from selling, transferring, or assigning third-party rights over them.
The court’s order aims to protect the interests of fleet leasing companies by mandating Gensol to disclose the current locations and operational status of the leased electric vehicles. This ruling underscores the critical importance of maintaining battery conditions for the operational viability of the fleet.
**FAQ**
**What are the implications of the Delhi High Court’s ruling for Gensol and BluSmart?**
The ruling restricts Gensol and BluSmart from transferring or selling the leased electric vehicles, ensuring that the lessors can maintain oversight and protect their assets while addressing concerns about unpaid dues and lease violations.
