The Delhi High Court on Tuesday appointed a receiver to take deemed custody of 95 electric vehicles leased to BluSmart Cabs by Clime Finance Private Limited, while restraining Gensol 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 ordered, while clarifying that the receiver shall not remove the cars from where they are parked and shall only take deemed custody..The order was passed in a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996. Clime Finance, the petitioner, submitted that it had leased 95 Tata electric vehicles to Gensol entities for cab and ride-share services for a period of three years in 2022 and claimed "absolute and paramount rights" over the EVs. The petitioner alleged that Gensol and Blu Smart defaulted in remitting lease rentals due in March 2025, prompting it to issue legal notices. It was further averred that the respondents had ceased operations, raising concerns over the protection of the leased fleet. Clime Finance asserted that it had contractual rights to repossess the vehicles in the event of default..After hearing arguments, the Court issued the following interim directions:Restraint on alienation: "Respondents are restrained from selling, alienating or creating third-party rights with regard to 95 Tata electrical vehicles," the Court directed.Powers of the receiver: The Court specified that "the Receiver will not take physical possession of the vehicles or remove them," but will have the authority to maintain them, including ensuring periodic charging.Non-interference by respondents: "Respondents will not in any manner hinder the Receiver from taking deemed possession. If they do so, the Receiver is entitled to seek assistance of the police," the Court held.Receiver’s fee and reporting: The Court fixed the receiver’s fee at ₹5 lakh, with a direction to submit periodic reports regarding the condition and maintenance of the vehicles.The case will now be taken up for further proceedings in July..Clime Finance was represented by Advocates Abhimanyu Mahajan, Shantanu Agrawal, Saurabh Seth, Manas Arora, Abhinav Tyagi, Ananya Garg, Tapojit Sarker, Dheeraj P Deo, Neelam Deol and Anubha Goyal from Lexster Law LLP..On April 25, the Court restrained Gensol Engineering Limited and BluSmart Mobility from alienating or creating third-party rights over 175 electric vehicles leased to them by Japanese financial services giant Orix.BluSmart Mobility operates India’s first all-electric ride-hailing service. Distinct from the typical aggregator model where drivers own or finance their vehicles, BluSmart leases its fleet from financiers like Orix. Drivers are employed on a salaried basis and BluSmart manages the fleet, charging infrastructure and maintenance.This litigation comes amid mounting regulatory scrutiny on Gensol Engineering. Earlier this month, the Securities and Exchange Board of India (SEBI) issued a show-cause notice to Gensol over alleged violations of corporate governance norms, including failure to disclose related-party transactions, particularly with BluSmart and other group companies.SEBI is also probing discrepancies in Gensol’s financial statements, including questions over revenue recognition practices and inadequate disclosures regarding contingent liabilities. Sources indicate that SEBI has flagged concerns about Gensol’s dealings in several inter-company transactions, which may have contributed to an inflated financial position.Additionally, SEBI has reportedly barred certain Gensol officials from accessing the securities market pending conclusion of the investigation. The regulatory action has weighed on investor sentiment, with Gensol’s stock witnessing significant volatility..Clime was represented by Advocates Abhimanyu Mahajan, Saurabh Seth, Shantanu Agarwal, Abhinav Tyagi, Manas Arora, Ananya Garg, Neelam Deol, Abhiroop Rathore, Tapojit Sarkar, Anubha Goel and Mayank Joshi.
