Gensol Subsidiary Taken to Delhi High Court Over EV Lease Default: Key Highlights

Trouble is mounting for Gensol Engineering Ltd as its subsidiary, Param Renewable Energy, is dragged to the Delhi High Court by electric vehicle lessor SMAS Auto Leasing India Pvt Ltd. The petition seeks the urgent appointment of a court receiver to seize electric vehicles (EVs) leased to Param Renewable, amid rising defaults and lack of asset visibility.

The petitioner has also urged the court to restrain Param from transferring or encumbering any assets and to disclose all movable and immovable properties, including bank accounts, through an affidavit. The Delhi High Court is scheduled to hear the case on Thursday.

SMAS Auto claims that Param has defaulted on lease rentals and service charges amounting to Rs 19.22 lakh and is liable to pay Rs 3.77 crore as foreclosure value following premature lease termination. The lease agreement, signed on 22 June 2022, involved 62 EVs along with fleet management services.

The plea warns that EVs are fast-depreciating assets, and prolonged inactivity may lead to irreversible battery damage. SMAS says it is unaware of the vehicles’ condition or location, leaving it vulnerable to legal and safety liabilities.

The petition also points to a personal guarantee from Param directors Anmol Singh Jaggi and Puneet Singh Jaggi, dated 28 June 2022, covering all payment obligations.

This case follows a 7 May Delhi High Court order directing seizure of 164 EVs leased to Gensol Engineering and marks the sixth such legal action within four weeks. So far, 698 leased EVs linked to Gensol and its clients are under judicial scrutiny.

Separately, Gensol faces major regulatory and financial headwinds. On 22 May, the Debt Recovery Tribunal-III, Delhi, ordered status quo on Gensol and its subsidiary Gensol EV Lease’s assets following ₹992 crore recovery petitions by IREDA and Power Finance Corporation. Earlier, on 16 May, IREDA also filed a Rs 510 crore insolvency plea with the NCLT against Gensol, citing loan fraud and default.

As Gensol’s legal woes deepen, questions mount over the company’s financial health and governance in India’s emerging EV leasing sector.

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