Delhi HC fixes Feb 13 for next hearing in DMRC-DAMEPL case, may pass order

RInfra arm says it isn't immune from insolvency, pleads for court order to DMRC to release award amount to ease pressure from banks on DAMEPL

Attorney General R Venkataramani told the Delhi High Court on Tuesday that if the Union government agrees to an interest-free subordinate debt on behalf of Delhi Metro Rail Corporation (DMRC) to pay Reliance Infra, then the government of Delhi will follow suit.

In its last affidavit, the Delhi Metro Rail Corporation (DMRC) told the court that it has requested the Centre and the state government Rs 3,565.64 crore each as interest-free subordinate debt towards payment of arbitral award in favour of Reliance Infrastructure-arm, Delhi Metro Express Private Limited (DAMEPL).

The Attorney General, representing the DMRC said the corporation appreciates the court for understanding its earnest attempt to gather funds towards the payment. He said the request for the subordinate debt might just work out.

"The DMRC, following the decision of its Board of Directors, has approached its shareholders, that is, the Government of India and Delhi government, and has written letters dated January 18, 2023, to Ministry of Housing and Urban Affairs and Delhi government that a sum of Rs 3,565.64 crore may please be provided as interest-free subordinate debt at an early date, so that the Supreme Court directions may be complied with," the DMRC said in an affidavit before the High Court.

The Attorney General pointed out that the DMRC Act restrains anyone from attaching its assets for the payment of debt and doing so would halt the workings of the trains.

Meanwhile, DAMEPL counsel charged before the court that unlike DMRC, which is half- and half-owned by the Delhi government and the Union, it is not immune to insolvency proceedings. “The banks are after us for the repayment of their loans. There has to be some finality. If, at the eleventh hour, the DMRC says that their shareholders are not ready to cough up the money, what do we do?”

DAMEPL asked the court to fix a date within a week from Tuesday so that it can argue the matter and the court can finally reach a decision.

The next hearing is on February 13.

DMRC and DAMEPL have been at odds ever since the latter pulled out of the Delhi Metro Airport Line operations. It was due to safety issues arising from structural defects.

An arbitral court ruled in favour of RInfra in 2017. It asked DMRC to pay the arbitral award, which was later upheld by the Supreme Court.