GNCTD refuses to help in paying arbitral amount to Reliance infra: DMRC informs Delhi HC

New Delhi [India], January 4 : The Delhi Metro Rail Corporation (DMRC) on Wednesday told the Delhi High Court that the government of NCT Delhi (GNCTD) had informed DMRC that "it is not inclined to provide money for payments arising out of disputes or contractual defaults to the Reliance Infrastructure subsidiary's Delhi Airport Metro Express Private Limited (DAMEPL).
DMRC in its fresh affidavit filed in Delhi High Court stated that "GNCTD in its letter dated December 21, 2022, have informed that it is not inclined to provide such money of
Rs. 3565.64 Crore towards equity, the purpose of which is solely to pay the Arbitral amount with interest."
It is further stated in an affidavit that GNCTD said that "Shareholders cannot be held liable for payments arising out of disputes or contractual defaults. It is further submitted that DMRC may raise money from Open Market or through externally aided Funds or loan from the Government of India to meet this liability."
The Ministry of Housing and Urban Affairs (MoHUA) in its letter dated January 3, 023, have informed DMRC, that the matter is currently under examination in MoHUA.The DMRC would place the aforesaid letter received from GNCTD dated December 21, 2022, before the meeting of its Board of Directors, which is likely to be held on January 16, 2023, and would seek further direction/decision from its Board of Directors, stated the DMRC affidavit.
The DMRC earlier, in its short affidavit informed the court that it has written to the Union Ministry of Housing and Urban Affairs and to the Government of NCT Delhi, requested an infusion of funds as Grant/Equity/Interest-free Subordinate Debt to DMRC, for payment of balance Arbitral Award amount.
The Court earlier made clear that if the amount is not paid within time, the Court shall be constrained to call the appearance of the Managing Director of the DMRC before this Court.
In March months this year the Delhi HC had passed a Judgement and said, "out of the funds available under the head Total DMRC Funds of Rs 1,452.10 cores, the judgment debtor is directed to keep aside an amount of Rs 628 crores (Rs 514+ Rs.114 crores) towards statutory expenses as mentioned herein above and from the remaining amount, part payment of decreetal amount be made within two weeks."
"For the remaining outstanding amount, the judgment debtor is directed to make the payments in two equal instalments within two months. The first instalment shall be paid on or before April 30, 2022, and the second instalment shall be made on or before May 31, 2022," said the judgement.
Court further added that "the award dated 11.05.2017 has attained finality and cannot be allowed to remain as a paper award, therefore, the judgment debtor is duty bound to either divert its finds shown to be available in different heads mentioned in the affidavit of 14.02.2022 after seeking permission of the Central Government, if necessary or raise loans to satisfy the award."
The Delhi High Court earlier had directed DMRC to provide details of funds in its bank account in connection with a Reliance Infrastructure subsidiary's (DAMEPL) plea for the execution of an arbitral award against it.
The Reliance Infrastructure subsidiary Delhi Airport Metro Express Pvt Ltd (DAMEPL) had filed an application requesting Delhi High Court to direct Delhi Metro Rail Corporation Limited (DMRC) to deposit Rs 6,208 crores available in its various bank accounts into the project escrow account without any delay.
DAMEPL, in its application, had rejected any out-of-court negotiations/ settlement or assignment of debt to the DMRC. DAMEPL plea states, "The Decree Holder is not agreeable to settling the matter out of the Court. Accordingly, no alternate proposal by DMRC is acceptable to Decree Holder and that it presses for the execution on merits at the earliest."
The plea further stated that the delay in payment by DMRC is causing immense prejudice to DAMEPL and its Promoter, Reliance Infrastructure Limited. In case the reliefs as sought for are not granted, the Decree Holder shall suffer irreparable loss and injury.
Earlier, DAMEPL had filed an execution petition in the Delhi HC on September 12, 2021, seeking court's directions to DMRC for honouring the SC order and pay Rs 7,200 crores to the company. DMRC, out of Rs 7200 crores, has so far paid only Rs 1000 crores.
The Supreme Court (SC), on 7 September 2021, had upheld the arbitration award of Rs 7,200 crores in favour of DAMEPL.
In 2008, DAMEPL had entered into a contract with DMRC for running the airport metro line till 2038. As disputes arose between the parties, DAMEPL stopped operating the metro on the airport line and invoked the arbitration clause against DMRC alleging violation of contract, and sought a termination fee.