HC orders DMRC to provide bank details in execution plea by DAMEPL

The Delhi High Court on Wednesday ordered the Delhi Metro Rail Corporation (DMRC) to file an affidavit providing details of its bank accounts as well as the amount of the balance in a Reliance Infrastructure subsidiary’s plea for execution an arbitration award of over Rs 4,600 crore against her.

Judge Suresh Kumar Kait noted that the DMRC has Rs 1,642.69 crore available in its bank accounts, and said that while the Delhi Airport Metro Express Private Limited (DAMEPL) is unwilling to accept the company’s offer to resume its debts to the extent of the sentence, the court can not force him to do so.

(DAMEPL says) if he has the money on hand, in an escrow account, at least he can negotiate with the banks for restructuring and so on. Suppose he transfers full responsibility to you, to pay the lenders, he will lose bargaining power. It is a decree holder, you (DMRC) are a judgment debtor. If your offer is accepted, no problem. But when it doesn’t accept that, this court cannot force you to accept that way, the judge said.

The judge further observed that while the seizure of DMRC properties was not permitted, there was no such embargo with respect to its bank accounts.

Here, the properties cannot be reattached under section 89 (of the Metropolitan Railways (Operation and Maintenance) Act 2002. The option left to the court is how much money is left on the property. bank account This can be settled, the court said.

DMRC is responsible for providing bank account details … in Delhi or outside Delhi. It will also be mentioned in the affidavit, the amount that is in a particular account, ordered the court.

Attorney Prateek Seksaria, representing DAMEPL, informed that his lenders have rejected the DMRC’s proposal to take over its responsibilities and argued that no special treatment can be given to the government in these enforcement proceedings.

Rather, the government should lead by example by paying the price, argued the lawyer who claimed that even after the DMRC deposited Rs 1000 crore into the escrow account, more than Rs 6000 crore was still owed.

He argued that DAMEPL is entitled to the amount awarded in the arbitration proceeding as well as the benefit of any surplus that can be used to restart its activities.

DAMEPL’s attorney further relied on the DMRC’s affidavit to state that the company had over Rs 5,800 crore in its bank accounts as of December 17, with Rs 1,642 crore being its earnings and more than Rs 2,400 crore. of Rs and Rs 1,700 crore being its project allocation fund and deposit. funds, respectively.

He prayed that at least the admitted winnings of the DMRC would be immediately allocated to the enforcement of the sentence.

Solicitor General Tushar Mehta and Senior Counsel Parag Tripathi, appearing for the DMRC, told the court they had no instructions regarding the rejection of the proposal by the banks concerned and reiterated that the company taking over the debts of DAMEPL insofar as allotment and negotiating with lenders would be in the public interest.

The government says we are in negotiations with the bank. Reliance, the winner, they come and say the banks are interested in us (DAMEPL) getting the money and they rejected the government’s proposal. If so, it is very serious. Something also needs to be looked at by the banking division, the solicitor general said.

Tripathi urged the court to give the DMRC a chance to find a solution and argued that if bank accounts were seized and metro services were shut down, no one would gain anything.

If the metro is stopped tomorrow, there will be a huge problem, I will fix it because as an instrument of the state, when I sit with the banks, the ability to obtain a rollover of the amount in the form of a bank loan will be much bigger, he said.

The DMRC had told the court that it would deposit Rs 1,000 crore in favor of DAMEPL while suggesting to assume its debt up to the reward money.

The DMRC had said that since the company was facing a financial crisis, incurring a sudden liability would have an impact on the public interest and the authorities were therefore in the process of finding a solution.

He also claimed that the amount payable was around Rs 5,000 crore, which was lower than DAMEPL’s claim.

An arbitral tribunal in its award of May 2017 ruled in favor of DAMEPL, which had withdrawn from the operation of the Airport Express metro line for safety reasons, and had accepted its claim that the operation of the line was not viable due to structural defects in the viaduct through which the train would pass.

The concession contract between the two was signed on August 25, 2008.

Under the agreement, the DMRC was to perform the civil works, excluding the depot, and the rest, including the project system work, was to be performed by DAMEPL, a joint venture of Rinfra and a company Spanish construction company – Construcciones Y Auxiliar De Ferrocarriles – with a respective holding of 95 and 5%.

The Airport Express line was put into service on February 23, 2011, after an investment of more than 2,885 crore rupees, financed by the DAMEPL promoters’ fund, banks and financial institutions.

In November, the Supreme Court rejected the DMRC’s appeal for a review of its judgment which upheld the 2017 arbitration award in favor of DAMEPL, enforceable against it.

The next hearing on the matter would take place in January.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)


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