HC directs Centre, Delhi govt to help pay DMRC award money it owes to DAMEPL

New Delhi: The Delhi High Court Friday directed the Centre and the city government to attend to DMRC’s request for extension of sovereign guarantees or subordinate debt to enable it to make payment of dues of an arbitral award passed in favour of Delhi Airport Metro Express Private Limited, saying the governments cannot shirk from their liability to abide by judgements and decrees.

The high court’s verdict came on an execution petition filed by Reliance Infrastructure-owned DAMEPL against the Delhi Metro Rail Corporation (DMRC) over payment of dues of an arbitral award passed in its favour.

It said the orders passed in the execution petition operate and bind both the Union Ministry and Delhi government the principal shareholders of DMRC - and the circumstances clearly mandate and warrant the corporate veil being lifted and torn apart as the two governments are in complete and total control of the affairs of the Delhi Metro.

Justice Yashwant Varma, in a 133-page judgement, said the decision on sovereign guarantees and subordinate debt has to be taken by the Union Ministry of Housing and Urban Affairs and the Delhi government within two weeks and if the permission is accorded to the DMRC, it will deposit the entire amount payable under the award along with up-to-date interest within a period of one month.

“If the Union ministry or Delhi government decline the request for providing sovereign guarantees or subordinate debt, the Union ministry shall forthwith or at the end of two weeks revert and repatriate all monies received by it from DMRC post March 10, 2022 so as to ensure that the credit balance of the DMRC, total project and total other funds reflects the balance as it existed on March 10, 2022,” the high court said.

An arbitral tribunal had in May 2017 ruled in favour 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.

In February this year, the court had noted that the total amount of the award with interest till February 14, 2022 was Rs 8,009.38 crore. Of this, a sum of Rs 1,678.42 crore has been paid by DMRC and an amount of Rs 6,330.96 crore is still due.

DMRC took a 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 high court, in its verdict, said once it receives the money from the Union ministry, the DMRC will transfer it to the escrow account equal to the total amount payable in terms of the award along with interest.

“In case of a failure on the part of the parties to proceed in terms of the above directions, the entire amount standing to the credit of DMRC, total project and total other funds as of today shall stand attached forthwith without reference to court,” the judge made clear.