Airport metro award: HC tells Centre, Delhi govt to clarify stance on unpaid dues to Reliance Infrastructure
Justice Yashwant Varma notes that the gross decretal amount up to February 14 stood at Rs 8,009.38 crore, out of which the DMRC has paid Rs 1,678.42 crore.
The Centre and the Government of National Capital Territory of Delhi are the two equity partners in the DMRC and they were not parties to the court proceedings. (File Pic) The Delhi High Court asked the Centre and the Delhi government on Friday to place their stance in a case related to unpaid dues to be paid by Delhi Metro Rail Corporation (DMRC) to Reliance Infrastructure’s Delhi Airport Metro Express Pvt Ltd (DAMEPL) under the May 2017 arbitral award.
A single-judge bench of Justice Yashwant Varma said, “Undisputedly, the two essential stakeholders in the DMRC are the Ministry of Housing and Urban Affairs and the GNCTD. The ends of justice would thus warrant that the said stakeholders being placed formally on notice and being invited to address submissions before this court on the ways and means in which the amounts payable under the award are proposed to be made over to the execution petitioner”.
“The newly impleaded respondents shall address submissions…The court hopes and trusts that the shareholders shall bear in mind that the impasse which exists need to be resolved expeditiously bearing in minding the peremptory directions of the Supreme Court as well as the need to protect and preserve the DMRC which not only represents a project of immense public importance but also constitutes the lifeline for the residents of the NCT,” Justice Varma ordered.
The Centre and the Government of National Capital Territory of Delhi are the two equity partners in the DMRC and they were not parties to the court proceedings.
The court then impleaded the Centre through the housing and urban affairs ministry and the Delhi government through the chief secretary. The matter is listed for February 20.
Appearing for the DMRC, Attorney-General R Venkataramani said that as per his client’s last affidavit, its endeavour to request both the Delhi government and the Centre to make respective payments as equity partners had not materialised.
“One way of going about it is to have the presence of both and ask how they would like to proceed in the matter. Instead of doing shadowboxing, I think it’s better if parties are before the court,” he submitted.
Senior advocate Kapil Sibal, appearing for the DAMEPL, drew the court’s attention to judgments of the Bombay High Court and the Supreme Court to argue that “the court would be justified in lifting the corporate veil and proceeding further against the stakeholders for the purpose of the execution of the award, which has undisputedly attained finality”.
Sibal also pointed out that the Supreme Court on December 14, 2022, asked the high court to expeditiously decide the enforcement of the arbitral award within three months.
On the issue of lifting the DMRC’s corporate veil to make its partners responsible, Sibal said, “There is an order of the SC that the payment will be completed by March 13.”
The attorney-general responded, “That is true but it is on the understanding that the DMRC would be in a position to get it done. On an every day basis we are running in losses.”
And Sibal said, “That is why the Delhi government must be asked to pay because the DMRC are running in losses.”
The court said it was not the job of an execution court to find ways and means to pay the unpaid amount. “It places the entire burden on us to get the parties on a common platform and a common solution,” the court observed, adding that if the DMRC comes and says it is unable to pay, the court will see how it can be done. “In any case, inviting the Union [government] and the GNCTD itself amounts to some extent of lifting the corporate veil,” the court observed.
The court said various additional affidavits of the DMRC indicated that “despite requisite efforts, the two principal shareholders have been unable to arrive at a consensus on the ways and means in which debt due and payable under the Award is proposed to be liquidated”.
Justice Varma noted that the gross decretal amount up to February 14 stood at Rs 8,009.38 crore, out of which Rs 1,678.42 crore had been paid by the DMRC.
The DAMEPL contended that the amount along with interest would further swell to Rs 6,330.96 crore.
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