The Delhi High Court on Friday directed the Centre and the Delhi Government to attend to the request of the Delhi Metro Corporation (DMRC) for an extension of sovereign guarantees and subordinate debt so that it can liquidate its liabilities under the award passed in favour of Reliance Infrastructure-owned Delhi Airport Metro Express Private Limited (DAMEPL).
“The aforesaid decision be taken within a period of two weeks from today. If permission be accorded to the DMRC in respect of either of the two modes as suggested, it shall proceed to deposit the entire amount payable under the award along with up-to-date interest in terms thereof within a period of one month therefrom,” said Justice Yashwant Varma.
DMRC operates the Airport Metro in Delhi after DAMEPL stopped operation in 2013. An arbitral tribunal had, in May 2017, ruled in favour of DAMEPL after accepting its claim that running the operations on the line was not viable due to structural defects in the viaduct. DMRC took the stand that it has no funds, and despite efforts, the two stakeholders—the Centre and the Delhi government—have been unable to arrive at a consensus on the ways and means by which the amount payable under the award may be liquidated.
The bench said that if permission be accorded to the DMRC, it shall proceed to deposit the entire amount payable under the award along with up-to-date interest in terms thereof within a period of one month therefrom. Further, if the Union Ministry or Delhi government decline the request for providing a sovereign guarantee or subordinate debt, “the Union Ministry shall forthwith and at the end of a period of two weeks revert and repatriate all monies received by it from DMRC post March 10, 2022 pursuant to its directives so as to ensure that the credit balance in total DMRC, total project, and total other funds reflects the balance as it existed on March 10, 2022.”
The court said that in case of a failure on their part to proceed in terms of the above directions, the entire amount standing to the credit of total DMRC, total project, and total other funds as of today shall stand attached forthwith.
“In case DMRC fails to clear all outstanding amounts payable in terms of the Award, despite the directions set forth above, the Court reserves the right to frame further appropriate directions against the Union Ministry and GNCTD consequent to the corporate veil having been duly lifted,” the bench concluded.
Based upon these rulings, if the Centre and Delhi government decide to give sovereign guarantees to DMRC by March 31, 2023, DMRC will be required to pay the entire amount to DAMEPL by April 30, 2023. In case both governments decide not to give sovereign guarantees to DMRC by March 31, then the Centre will return to DMRC the amounts received by it after March 10, 2022. Then, DMRC will transfer the entire balance amount to DAMEPL forthwith.
HC’s warning
In the event that neither of these two scenarios plays out, then all amounts standing in DMRC’s accounts as of March 17, 2023, will be attached after March 31, 2023. If amounts remain unpaid (as they will), then the court will frame further directions against two governments to enforce the award.