It's amazing DMRC, formed by two govts, has no money: Delhi High Court

The Delhi High Court on Thursday pulled up the Union government and the Delhi government after they claimed that they cannot be made liable for the dues that Delhi Metro Rail Corporation (DMRC) owes to an arm of Anil Ambani-owned Reliance Infrastructure.

“It is amazing that there are two elected governments who have formed this corporation and now we’re being told that this corporation has no money. Imagine what message you are conveying to the outside world — a government corporation which is refusing to deal with an award,” Justice Yashwant Varma said. “Let’s not distance ourselves so far that it becomes untenable.” 

DMRC has been ordered to furnish details of funds available with it so that the court can take a holistic view. The next hearing is on Friday.

In a previous hearing, the court had noted that the total amount of the award with interest till February 14, 2022, was Rs 8009 crore. Out of this, a sum of Rs 1678 crore has been paid so far by the DMRC and dues stand at Rs 6330 crore.

The Ministry of Housing and Urban Affairs, which owns 50 per cent of DMRC has stated that under provisions of the Companies Act, 2003, it cannot be held liable for the entire amount.

The court had also asked the Centre to take a call on granting sanction to attach DMRC’s assets in the case, under a provision of Metro Railways Act. The Centre said that it cannot permit such an action “since that would result in closure of DMRC and bring the city of Delhi to a halt. Such a situation will cause significant inconvenience to the public and impact law and order in the city.”

This is a reiteration of DMRC’s earlier stand in the case where it expressed its inability to attach its assets in the case.

In January, DMRC had told the court it had requested the Centre and the Delhi government to lend over Rs 3,500 crore each as interest-free subordinate debt for repayment of the unpaid arbitral award. The Centre informed the court that this request is under consideration and the decision will be conveyed to DMRC. 

DMRC and DAMEPL have been at odds ever since the latter pulled out of the Delhi Metro Airport Line operations due to safety issues arising from structural defects. An arbitral court ruled in favour of the RInfra firm in 2017, asking DMRC to pay the arbitral award, which was later upheld by the Supreme Court.