On Thursday, the Delhi High Court ordered that 129 electric vehicles (EVs) used by Gensol Engineering and ride-hailing startup BluSmart be taken and handed over to the lender STCI Finance.
Hypothecation means using something like a car or stock as security for a loan without giving the lender ownership or control of it.
STCI claimed that Gensol and BluSmart had failed to repay a loan of ₹15 crore and were trying to get rid of the vehicles illegally.
STCI applied to Section 12A of the Commercial Courts Act, 2015, asking to skip the usual step of mediation before going to court.
In her order on May 8, Justice Manmeet Pritam Singh Arora stopped Gensol and BluSmart from giving the vehicles to anyone else.
Because there was a risk the vehicles could be moved or lost, the court-appointed officials took control of them and allowed them to handle their maintenance and charging.
“Further, the balance of convenience also lies in favor of the plaintiff (STCI) considering that the plaintiff may suffer loss if the possession of the vehicles is not secured and defendant no.1(Gensol) goes on to dispose of the said vehicles in favor of third parties,” the order said.
On October 19, 2023, Gensol took a ₹15 crore loan from STCI to buy the 129 vehicles under a loan agreement.
The loan was backed by a hypothecation agreement and personal guarantees from the company’s promoter brothers, Puneet and Anmol Singh Jaggi.
This is the fifth case in less than two weeks asking the court to stop Gensol and BluSmart from giving others any rights over their EVs. So far, the court has blocked them from doing this for a total of 619 electric vehicles.
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