Two elected govts set up DMRC, we are told it has no money: Delhi HC

The Delhi government argued that they were not operating the DMRC and were merely shareholders and had no say except over shareholders rights. “So you don’t have representation on the board?” Justice Varma asked to which the state government said they have representation but they don’t have control over “day-to-day functioning”. The HC observed, “I cannot countenance such a submission. To say that you have absolutely no control of how the corporation is functioning…you are a stakeholder.”

The state government argued that the DMRC in its written submissions has said that they have Rs 5694.25 crore with them and that instead of pursuing other remedies available to them they “simply say since we are two shareholders, let’s invoke piercing of corporate veil”.

The Centre, represented by Additional Solicitor General Chetan Sharma, said that let DAMEPL make good the principles of law and fact which make out a “prima facie case” that “non parties to arbitration agreement, non parties to execution proceedings are essential parties of its ipse dixit (assertion) of lifting the corporate veil”. Sharma said that none of the tests laid down by the Supreme Court will apply.

The Centre in its latest affidavit filed by the Joint Secretary, Ministry of Housing and Urban Affairs, has said that attachment of DMRC’s properties cannot be “accorded” by the Centre since that would result in closure of the DMRC and bring Delhi to a halt. “Such a situation will cause significant inconvenience to the public and impact law and order in the city,” and the Centre as the “custodian of the public good, cannot permit such circumstances to ensue”. The Centre was also asked to submit a copy of the order refusing to grant sanction for attachment of the Delhi Metro’s properties. On Monday, the HC had asked the Centre to take a decision on whether it proposes to sanction the attachment of DMRC’s assets in order to pay the unpaid amount.

Asking the DMRC to bring the persons who are abreast of the facts to attend the proceedings, the HC said, “…learned counsel appearing for the DMRC is directed to place all requisite records as also direct the competent authorities of the DMRC to attend to these proceedings so that a holistic view can be taken with respect to the present funds available with the corporation.” The matter is listed on Friday.

Justice Varma on February 17 had issued notice to the Centre and Delhi government and observed that 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 (DAMEPL)”. The HC had 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. Reliance Infrastructure led DAMEPL contended that the amount along with interest would further swell to Rs 6,330.96 crore.