Inform us of ‘modalities of payment’ of outstanding amount due to DAMEPL: Delhi High Court to DMRC

The DMRC filed an additional affidavit Monday stating that it had written to the Union Ministry of Housing and Urban Affairs and Delhi government on August 1 and had prayed for providing “consent/assurance for contributing equity in equal proportion” by both shareholders i.e., Union Ministry of Housing and Urban Affairs and Government of NCT Delhi. The affidavit states that DMRC had again written to the Centre and the Delhi government on September 6 requesting infusion of funds as “Grant/Equity/Interest free Subordinate Debt to DMRC” for payment of balance arbitral award amount.

The court was informed that the Centre through the MoHUA on October 28 had informed that a meeting will be convened on November 10 between the Centre, Delhi government and DMRC as well as leading banks to discuss the matter.

“This meeting is expected to come out with some proposals and it is, therefore, respectfully prayed that this Hon’ble Court may pass orders as deem fit after the outcome of the said meeting is placed before this Hon’ble Court,” the affidavit states.

Senior Advocate Jaideep Gupta, appearing for DAMEPL, submitted that DMRC has “not been taking the orders of the HC seriously”. He further submitted “no modalities as to payment of the balance amount has been placed before the court till now”. Singh submitted that the AG is himself appearing in the matter and “whatever is the outcome of the meeting, the court will be informed of the same”. The matter is now listed on November 18.

The Centre and Delhi government are the two equity partners of DMRC. Till now, DMRC has paid approximately Rs 2,600 crore to DAMEPL, the additional affidavit states. DMRC has now sought Rs 3,500 crore from both equity partners for payment of balance amount.

On October 10, the AG had informed the court that DMRC has written to the Centre and Delhi government for infusion of funds in the public sector undertaking which will enable it to pay the “outstanding amount” to DAMEPL as per the arbitral award. He had further submitted that the “importance of complying with the decree is well taken but equally important is the concerns of the Delhi Metro”.

An additional affidavit filed by DMRC before the previous hearing stated that if DAMEPL’s prayers are granted at this juncture, “operations of the DMRC would come to complete standstill, which would be prejudicial to public interest, considering that approximately 48 lakh journeys take place daily on the Metro system maintained by DMRC” in the NCR.

Referring to the affidavit, the AG had said in the previous hearing that the company is reeling under financial crisis and if it pursues raising of any loan, it will not be able to serve the interest & loan repayment and may fall into a financial trap.

In 2008, DMRC had signed a contract with DAMEPL related to the design, installation, commissioning, operation and maintenance of the line. DMRC in 2012 invoked arbitration after DAMEPL terminated the concession agreement on the grounds that defects pointed out in construction were not cured by DMRC within the stipulated 90 days. The Supreme Court in September upheld the 2017 arbitral award favouring DAMEPL.

DMRC had earlier told the court that it has called for proposals for raising a loan from various banks for the amount due as it does not have the money to pay the Reliance Infra subsidiary. DMRC had argued before the court that funds earmarked for construction of Metro lines cannot be attached and also rolling stock, tracks, plant, machinery, building, etc., cannot also be attached in view of the bar under section 89 of The Metro Railways Act, 2002.

The court on September 6 was informed that DMRC’s appeal against the March 10 order directing it to pay DAMEPL has been dismissed by the SC. While the counsel representing DMRC sought four weeks to pay the balance amount, senior advocate Harish Salve for DAMEPL submitted that no further time should be granted as the March 10 order was not adhered to and even further time granted till August 5 was not complied with.