According to a two-member bench, Blu-Smart Mobility has defaulted on an operational obligation, giving its operational creditor the right to recoup it.
The National Company Law Tribunal (NCLT) has accepted an insolvency case against Blu-Smart Mobility Tech, a financially troubled business that operated an all-electric ride-hailing service and constructed an EV charging network across India.
In addition to suspending the company’s board, the Ahmedabad bench of the NCLT accepted Lepton Software Export and Research’s bankruptcy appeal against Blu-Smart Mobility for an outstanding balance of Rs 5.84 crore. Pawan Kumar Goyal was named as the interim resolution professional.
Blu-Smart Mobility has defaulted on an operational obligation, and its operational creditor has the right to recover it, according to a two-member bench.
It said, “Under section 9(5) of the code, the respondent/corporate debtor Blu-Smart Mobility Pvt Ltd is accepted in the Corporate Insolvency Resolution procedure.”
Additionally, in accordance with the Insolvency & Bankruptcy Code (IBC), the NCLT put Blu-Smart Mobility Tech under a moratorium and instructed the IRP to assume all responsibility for Blu-Smart Mobility’s assets and records.
Lepton Software, which distributes Google Maps Platform services under a license from Google Asia Pacific Pte, submitted a petition that resulted in the NCLT ruling. Through an arrangement, it was offering its services for the ride-sharing services offered by Blu-Smart Mobility Tech. According to the agreement, it would take effect from October 1, 2022, until September 2023.
During the one-year renewal till September 30, 2024, Blu-Smart Mobility even confirmed via email that Lepton’s services continued on an as-needed basis.
The operating creditor argued that Google’s Terms of Service applied to the rendered services and that bills for the whole fiscal year FY25 were still outstanding.
In its response, Blu-Smart Mobility, however, disputed any operating debt and said that the petition in question was ill-conceived and a misuse of the legal system.
It argued that the renewal concluded on September 30, 2024, and had since raised a bill without a certificate of acceptance or completion. Post-expiry bills are not considered operational debt, according to Blu-Smart Mobility Tech.
However, according to NCLT, Blu-Smart Mobility has admitted partial obligation and does not contest the pre-expiry bills (up to September 2024).
The NCLT said that “the accepted outstanding of Rs 30,34,764.50 is augmented by the post-expiry claims, even assuming that only pre-expiry dues are considered.”
The data on file, including emails from the corporate debtor dated April 3, April 7, and April 15 of this year, show continuous use of the services without protest, requests for bills, and admissions of obligation, notwithstanding the renewal agreement’s stated expiration date of September 30, 2024.
According to the bench, which included members Sanjeev Sharma and Shammi Khan, Blu-Smart Mobility’s actions “implicitly extend the agreement on the same conditions, similar to an implied contract under Section 70 of the Indian Contract Act, 1872, or quantum meruit for services performed and accepted….”
The Blu-Smart Group, which includes Blu-Smart Mobility Ltd. and its four subsidiaries, including the corporate debtor, is the parent company of Blu-Smart Mobility Tech. The other three are Blu-Smart Premium Fleet Pt Ltd (which owns 178 EVs), Blu-Smart Fleet Pvt Ltd, and Blu-Smart Charge Pvt Ltd (which works on charging infrastructure).
With a 99.99 percent stake in each subsidiary, Blu-Smart Mobility—which is also now facing bankruptcy proceedings—has a close relationship with all of its enterprises.
Technology, fleet, and charging infrastructure are the three main verticals that make up the Blu-Smart Group’s operational ecosystem. These verticals are connected to customers and other service stakeholders.
Following Blu-Smart Mobility’s admission to CIRP, the Resolution Professional, with the consent of the CoC, has begun action to seize control of the subsidiaries, including Blu-Smart Mobility Tech, with the goal of maximizing consolidated value above that of individual businesses.