Delhi HC directs DMRC to pay Rs 306 cr to Reliance Infrastructure subsidiary - DAMEPL

Reliance Infrastructure announced that in a major immediate relief to Delhi Airport Metro Express (DAMEPL), a subsidiary of Reliance Infrastructure, Hon'ble Delhi High Court has directed Delhi Metro Rail Corporation (DMRC) to pay Rs. 306 crore to a consortium of banks to ensure that no account of DAMEPL turns NPA by 31 March 2018.

The Court passed an order to this effect on 23 March 2018 in response to an execution petition filed by DAMEPL under Section 36 of the Arbitration and Conciliation Act, 1996 seeking to enforce the arbitral award dated 11 May 2017. DAMEPL had filed the petition after an earlier petition by DMRC challenging the Arbitral Award was dismissed by the Hon'ble Delhi HC on 06 March 2018. Following Hon'ble HC order, the banks are expected to get Rs. 306 crore from DMRC.

The Hon'ble HC held that a party successful in arbitration and Section 34 cannot be allowed to become NPA for want of enforcement of the Award. The Hon'ble Court directed that it is just and necessary that the amount sufficient to avert the declaration of the accounts of the Petitioner as NPA should be paid by DMRC to the 11 banks before 28 March 2018. In case where the accounts have already become NPA, the court has ordered that such minimum amount shall be paid by DMRC for the said accounts to be upgraded and excluded from the purview of being NPA.

There is urgency for payments to be made since four banks have already declared the loan account of DAMEPL as NPA and Allahabad Bank has recalled the entire loan of DAMEPL. In its petition, DAMEPL had submitted that its entire loan portfolio was on the verge of being declared NPA, which would lead to recall of loan amounts, and which entails a payment of Rs. 1,882crore after 31 March 2018.

The Hon'ble Court directed that DMRC would authorize one of its officials to approach the lead bank - Axis Bank - and would ascertain the minimum amount required to be paid to ensure that DAMEPL's account does not become NPA.

The Hon'ble Court also recorded that the payments being made were without prejudice to all rights and contentions of the parties.

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