Supreme Court Directs DMRC And Reliance Infra's DAMEPL To Appear Before Delhi HC On January 31

The Supreme Court today asked the Delhi Metro Rail Corporation (DMRC) and the Reliance Infrastructure's subsidiary, Delhi Airport Metro Express Pvt Ltd (DAMEPL) to appear before the Delhi High Court on January 31 and request it to hear the dispute relating to the execution of the over Rs 4,600 crore arbitral award to DAMEPL at the earliest.

A Bench of Justice L Nageswara Rao and Justice B R Gavai said the hearing on the execution application does not brook any further delay as it is detrimental to the interest of both parties.

The Apex Court on September 9, 2021 had upheld the 2017 arbitration award of around Rs 4,600 crore in favour of DAMEPL, enforceable against the DMRC.

Senior Advocate Mukul Rohatgi, appearing for DAMEPL, submitted that there is a flurry of actions against the company.

"There is no defence after the apex court has upheld the order. Let them deposit the money. The court can give them a few months but the execution cannot be stalled for no reason," he submitted.

Senior Advocate Parag Tripathi, representing DMRC, submitted that it was ready to take over DAMEPL's liabilities to the extent of the award money as it would be in a better position to negotiate with the lender banks.

He submitted that in their communication, they were agreeable to the proposal.

Rohatgi, however, said, "I will deal with my creditors myself. Who is he to deal with my creditors?"

Tripathi informed the Apex Court about a December 30, 2021 letter written by DAMEPL to DMRC asking if it was ready to take over its debt which was to be paid by DAMEPL and Reliance Infrastructure to their lenders.

The Bench then asked, "What is this? There is an award in their favour, which is confirmed by this court. Now you are saying we will negotiate with your bankers."

Tripathi submitted that undertaking a sudden liability would impact public interest and the result would be that whole metro operations would come to a close not only here but in five other cities.

"I am not running away. I have deposited Rs 1,000 crore after the order. All I am saying is permit me to negotiate. We asked what the total dues were." Tripathi said.

The Apex Court, however, said, "Where is the question of negotiation, when he is saying pay me my money."

Tripathi replied that because he has himself said so and quoted letters to support his contention.

"I have money for Nagpur, Patna and cities. These are special grants from various authorities including multilateral loan agencies. If these are attached it will create a very serious problem. I am not running away. I am not a fly by night operator," Tripathi submitted.

The Court then asked Rohatgi," If they are willing to pay the money, what objection do you have?"

Rohatgi replied that he was not anymore interested in talking to them.

The Apex Court then asked the parties to appear before the high court on January 31 and request the high court to dispose of the execution application without any further delay.

"The execution application filed by the petitioner was adjourned to March 29, 2022. The High Court recorded the finding that there were efforts to settle the dispute relating to the manner of payments with the banks and financial institutions, which did not yield any results. Without commenting on submissions made on either side, we are of the opinion that hearing on execution application does not brook any further delay", the Court said.

"The parties are directed to appear before the high court on January 31 and request the high court to take up the qmatter at the earliest. We request the high court to dispose of the execution application without any further delay as consequences of pendency of this application is to the detriment of the petitioner and respondent." the Bench said in its order while disposing of the appeal filed by DAMEPL.

The Delhi High Court had earlier pulled up DAMEPL for playing hide and seek with the court and holding out-of-court communications with DMRC to settle the dispute relating to execution of the over Rs 4,600 crore arbitral award passed against the PSU.

The arbitral tribunal in its May 2017 award had accepted DAMEPL's claim that the running of operations on the line was not viable due to structural defects in the viaduct through which the train would run.

The decision by a Division Bench had come on DMRC appeal against a single judge order of March 6 last year upholding the arbitral award in DAMEPL's favour.

The concession agreement between the two was signed on August 25, 2008. Under the agreement, DMRC was to carry out the civil works, excluding at the depot, and the balance, including the project system works, were to be executed by DAMEPL, a joint venture of Rinfra and a Spanish construction company, Construcciones Y Auxiliar De Ferrocarriles, with a shareholding of 95 and five per cent respectively.

The Airport Express line was commissioned on February 23, 2011 after an investment of over Rs 2,885 crore, funded by the DAMEPL promoters' fund, banks and financial institutions.

With PTI inputs