DMRC vs DAMEPL: Court directs Delhi Metro to deposit dues on receipt of funds from govt

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IANS | 17 Mar, 2023
The Delhi High Court on Friday directed the Delhi Metro Rail Corporation (DMRC) to deposit all funds payable as per an arbitral award to Reliance Infrastructure-owned Delhi Airport Metro Express Private Limited (DAMEPL), on receipt of funds from the Central and Delhi governments.

A single-judge bench of Justice Yashwant Varma directed the two governments to tend to the DMRC's request for extension of the sovereign guarantee subordinate debt, enabling it to liquidate its liabilities under the award.

"If permission be accorded to the DMRC, it shall proceed to deposit the entire amount payable under the award along with interest within one month. If the Union Ministry or GNTCD declines the request, the Union shall at the end of two weeks, revert and repatriate all moneys received by it from DMRC post March 10, 2022," the bench said.

The DMRC was directed to send the whole sum due to DAMEPL, plus interest, to the escrow account upon receipt of the funds.

Justice Varma added: "In case DMRC fails to clear all outstanding amounts despite the directions above, the Court reserves the right to frame further appropriate directions against the Union Ministry and GNTCD consequent to the corporate veil having been duly lifted."

The High Court on March 2 was informed by the Centre that it cannot give sanction for attachment of properties of the DMRC for repaying unpaid arbitral award to the DAMEPL as it would bring the city to a halt.

It had said that giving sanction will cause significant inconvenience to the public and impact law and order in the national capital.

"It is submitted that sanction for attachment of the properties of the DMRC cannot be accorded by the answering respondent since that would result in closure of the DMRC and bring the city of Delhi to a halt. Such a situation will cause significant inconvenience to the public and impact law and order in the city. The answering respondent, being the custodian of the public good, cannot permit such circumstances to ensue," the affidavit had stated.

An amount of Rs 1,678.42 crore of the arbitral award has already been paid and Rs 6,330.96 crore is yet to be paid by DMRC.

Attorney General R. Venkataramani had on January 31 told the high court that if the Centre agrees to an interest-free subordinate debt on behalf of the DMRC to pay Reliance Infra, the Delhi government will follow suit.

Earlier in January this year, the DMRC had informed the court that it has requested the Centre and Delhi government for interest-free subordinate debt of Rs 3,565.64 crore from each for repaying the DAMEPL.

Each of the Central and Delhi governments owns 50 per cent of the shares in DMRC, but neither of them accepted to pay.

The award under consideration resulted from a contract that the DMRC and DAMEPL signed in 2008 to build and run the Delhi Metro's orange line, which runs from the New Delhi Railway Station to Terminal 3 at Indira Gandhi International Airport to Dwarka Sector-21.