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Delhi Govt. Not Inclined To Contribute ₹3500 Cr. Towards Equity For Paying Arbitral Award To DAMEPL: DMRC Tells Delhi HC
|4 Jan 2023 1:30 PM GMT
The Delhi Metro Rail Corporation on Wednesday informed the Delhi High Court that the state government is not inclined to provide it over Rs 3,500 crore towards equity for payment of the arbitral award which was passed in favor of Reliance Infrastructure-owned Delhi Metro Express Private Limited.
The DMRC submitted that the Delhi government has said that shareholders cannot be held liable for payments arising out of disputes or contractual defaults and that the Corporation may raise money from the open market or externally aided funds or as loan from the central government to meet this liability.
Attorney General R Venkataramani, representing the DMRC and the Centre, informed Justice Yashwant Varma that the matter is under active deliberation by the central government and hoped the issue will be resolved by January 16, when the meeting of the board of directors of the Corporation is likely to be held.
Taking note of the statement made by the law officer, the High Court listed the matter for further hearing on January 19.
The submissions were made by the DMRC in a pending application of the Delhi Airport Metro Express Private Limited (DAMEPL) which said DMRC paid it only Rs 166.44 crore on March 14, 2022, and sought a direction for payment of the remaining Rs 4427.41 crore.
The AG apprised the high court that the Delhi government has, in a December 21, 2022 letter, informed the DMRC that "it is not inclined to provide such money of Rs 3565.64 crore towards equity, the purpose of which is solely to pay the arbitral amount with interest".
"This is very unusual what is happening and these are unusual circumstances. We thought that GNCTD (Delhi government) will cooperate with us .," he said.
He said the central government was seriously considering the matter and, if the Delhi government continues to not participate in equity contribution, the Centre will take it to the logical conclusion.
"The DMRC would place the letter received from GNCTD dated December 21, 2022 before the meeting of its Board of Directors, which is likely to be held on January 16, 2023 and would seek further direction/ decision from its Board of Directors," the DMRC said in an affidavit filed in the high court.
Senior advocate Jaideep Gupta, representing DAMEPL, said no assurance for payment of arbitral award was coming from the central government.
The DMRC said it had requested both the stakeholders of Delhi Metro Union Ministry of Housing and Urban Affairs and the Delhi government- to subscribe to the equity share capital of DMRC to meet the liability arising out of the May 11, 2017 arbitral award.
On October 10, 2022, the DMRC told the court it has requested the Centre and the Delhi government for funds for payment of the balance arbitral award to DAMEPL.
The metro rail had said if any adverse orders were passed against it at this point in time, millions of commuters will be simply told they cannot use the Delhi Metro.
The attorney general had said though it was important to comply with the decree for payment of the award to DAMEPL, the concerns of Delhi Metro were equally important.
On March 10 last year, the High Court directed the DMRC to pay the over Rs 4,600 crore arbitral award along with interest to DAMEPL in two equal installments within two months.
The first and second installments were to be paid on or before April 30, 2022 and May 31, 2022, respectively.
The direction had come on DAMEPL's execution petition filed against the DMRC over the arbitral award passed in its favour on May 11, 2017.
An arbitral tribunal had ruled in favor of DAMEPL, which had pulled out of running the Airport Express metro line over safety issues, and accepted its claim that running the operations on the line was not viable due to structural defects in the viaduct through which the train would pass.
Attorney General R Venkataramani, representing the DMRC and the Centre, informed Justice Yashwant Varma that the matter is under active deliberation by the central government and hoped the issue will be resolved by January 16, when the meeting of the board of directors of the Corporation is likely to be held.
Taking note of the statement made by the law officer, the High Court listed the matter for further hearing on January 19.
The submissions were made by the DMRC in a pending application of the Delhi Airport Metro Express Private Limited (DAMEPL) which said DMRC paid it only Rs 166.44 crore on March 14, 2022, and sought a direction for payment of the remaining Rs 4427.41 crore.
The AG apprised the high court that the Delhi government has, in a December 21, 2022 letter, informed the DMRC that "it is not inclined to provide such money of Rs 3565.64 crore towards equity, the purpose of which is solely to pay the arbitral amount with interest".
"This is very unusual what is happening and these are unusual circumstances. We thought that GNCTD (Delhi government) will cooperate with us .," he said.
He said the central government was seriously considering the matter and, if the Delhi government continues to not participate in equity contribution, the Centre will take it to the logical conclusion.
"The DMRC would place the letter received from GNCTD dated December 21, 2022 before the meeting of its Board of Directors, which is likely to be held on January 16, 2023 and would seek further direction/ decision from its Board of Directors," the DMRC said in an affidavit filed in the high court.
Senior advocate Jaideep Gupta, representing DAMEPL, said no assurance for payment of arbitral award was coming from the central government.
The DMRC said it had requested both the stakeholders of Delhi Metro Union Ministry of Housing and Urban Affairs and the Delhi government- to subscribe to the equity share capital of DMRC to meet the liability arising out of the May 11, 2017 arbitral award.
On October 10, 2022, the DMRC told the court it has requested the Centre and the Delhi government for funds for payment of the balance arbitral award to DAMEPL.
The metro rail had said if any adverse orders were passed against it at this point in time, millions of commuters will be simply told they cannot use the Delhi Metro.
The attorney general had said though it was important to comply with the decree for payment of the award to DAMEPL, the concerns of Delhi Metro were equally important.
On March 10 last year, the High Court directed the DMRC to pay the over Rs 4,600 crore arbitral award along with interest to DAMEPL in two equal installments within two months.
The first and second installments were to be paid on or before April 30, 2022 and May 31, 2022, respectively.
The direction had come on DAMEPL's execution petition filed against the DMRC over the arbitral award passed in its favour on May 11, 2017.
An arbitral tribunal had ruled in favor of DAMEPL, which had pulled out of running the Airport Express metro line over safety issues, and accepted its claim that running the operations on the line was not viable due to structural defects in the viaduct through which the train would pass.
With PTI Inputs