Amendment to Metro Act: Assess impact, say law, finance ministries

Weeks after the Union Housing and Urban Affairs Ministry proposed an amendment to the Metro Railways (Operation and Maintenance) Act, 2002, that would prevent attachment of any property or funds of Metro rail administrations across all cities in case of a dispute, the Law and the Finance Ministries have advised that the full impact of the move may be assessed, sources said.

The draft amendment and background note was circulated for inter-ministerial feedback on March 17. The ministry had said the need to amend Section 89 of the Act was felt after a recent Delhi High Court order that asked the Centre to take a decision on whether assets of the Delhi Metro Rail Corporation can be attached to pay the pending arbitral award won by Reliance Infrastructure-owned Delhi Airport Metro Express Pvt. Ltd (DAMEPL).

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As per sources, while the Law Ministry stated in its opinion that the amendment may not “may not sustain judicial scrutiny”, the Finance Ministry’s Department of Economic Affairs said that while it had no objection to the proposal, the Urban Housing and Urban Affairs Ministry should consider its impact on the other conditions of the Act.

It also said, as per sources, that it should be ensured that the proposed amendment did not disregard rights of lenders/ concessionaires under other acts or regulations with regard to the insolvency and bankruptcy code.

The Housing and Urban Affairs Ministry spokesperson declined to comment on the matter.