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The Delhi High Court Thursday directed the Delhi Metro Rail Corporation (DMRC) to pay over Rs 4,600 crore of arbitral award along with interest to Delhi Airport Metro Express Private Limited (DAMEPL) in two equal installments in two months.
The court said the first and second instalments shall be paid on or before April 30 and May 31 this year.
The court’s judgement came on DAMEPL’s execution petition filed against DMRC concerning an arbitral award of over Rs 4,600 crore in its favour.
It said the May 11, 2017 arbitral award has attained finality and cannot be allowed to remain as a paper award and added that judgment debtor DMRC is duty bound to either divert its funds after seeking permission of the central government, if necessary, or raise loans to satisfy the award.
Justice Suresh Kumar Kait noted that during pendency of these proceedings, the DMRC had made payment of Rs 1678.42 crore and even on the day order was reserved in the execution petition, DMRC’s counsel had undertaken that Rs 600 crore shall be deposited in the ESCROW account.
The high court, in its 33-page judgement, noted that according to the DMRC affidavit, as on February 14, 2022, the total funds available with it under the head Total DMRC Funds’ is Rs 1,452.10 crore; under the head Total Project Funds’ is Rs 2,681.29 crore and under the head Total Other Funds’ is Rs 1,560 crore.
However, as per details of funds in the January 10, 2022 affidavit of DMRC, Rs 514 crore is committed to the salary, medical and post retiral benefits of employees and Rs 114 crore is the portion of security deposit on smart cards, which is refundable to the commuters.
In the considered opinion of this court, the said amount, that is, Rs 514+ Rs 114 crore has to be kept aside for the aforesaid purpose, however, from the remaining amount available in different bank accounts of judgment debtor as well as under other heads, the payments towards decretal amount has to be made.
The award dated May 11, 2017 has attained finality and cannot be allowed to remain as a paper award, therefore, the judgment debtor is duty bound to either divert its funds shown to be available in different heads mentioned in the affidavit of February 14, 2022 after seeking permission of the central government, if necessary, or raise loans to satisfy the award, the court said and disposed of the execution petition.
The court directed that out of the funds available under the head Total DMRC Funds’ of Rs 1,452.10 crore, DMRC is directed to keep aside amount of Rs 628 crore towards statutory expenses and from the remaining amount, part payment of decretal amount be made within two weeks and the remaining outstanding amount be paid in two instalments within two months.
The court also dismissed an impleadment application filed by Canara Bank and Union Bank in which it was stated that they had lent huge amount of money to the decree holder, DAMEPL, and they are liable to recover the amount out of the decretal awarded amount to be paid by DMRC.
The judge said the execution petition has been filed by the decree holder against the judgment debtor for execution of May 11, 2017 arbitral award and added I find that for any outstanding dues payable by the decree holder to these applicants, separate proceedings are required to be initiated and applicants cannot be permitted to settle their scores in the present petition.
On January 24, the Supreme Court had asked DMRC and DAMEPL to request the high court to hear the dispute relating to the execution of the arbitral award, saying that any further delay is detrimental to the interest of both the parties.
Last year, DMRC had told the court that since the corporation was facing a financial crunch, undertaking a sudden liability would impact public interest and authorities were therefore working out a solution.
An arbitral tribunal in its May 2017 award had ruled in favour of DAMEPL, which had pulled out from running the Airport Express metro line over safety issues, and accepted its 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 arbitral award pertained to a concession agreement between the two entities, which 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 Reliance Infrastructure (R-infra) and a Spanish construction company — Construcciones Y Auxiliar De Ferrocarriles — with a shareholding of 95 and five per cent respectively.
DAMEPL had borrowed from 11 banks — Axis Bank, UCO Bank, Punjab, and Sind Bank, Andhra Bank, Central Bank of India, Dena Bank, Allahabad Bank, Canara Bank, Bank of India, IIFC UK, and Canara Bank London — to carry out operations on the line.
The Airport Express line was commissioned on February 23, 2011, after an investment of over Rs 2,885 crore, funded by the DAMEPL’s promoters’ fund, banks, and financial institutions.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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