HC grants time to DMRC to make outstanding payment of arbitral award to DAMEPL


PTI | New Delhi | Updated: 20-06-2022 20:36 IST | Created: 20-06-2022 20:36 IST
HC grants time to DMRC to make outstanding payment of arbitral award to DAMEPL
  • Country:
  • India

The Delhi High Court Monday granted time till August 5 to Delhi Metro Rail Corporation (DMRC) to make outstanding payment concerning an arbitral award passed in favour of Delhi Airport Metro Express Private Limited (DAMEPL).

Justice V Kameswar Rao asked DMRC to file an affidavit, giving the break-up of the payments made to satisfy the award within one week thereafter, and listed the matter for further hearing on August 16.

The high court was hearing an application of DAMEPL which said that DMRC has paid it only Rs 166.44 crore on March 14 and sought direction to DMRC for payment of Rs 4427.41 crore by attachment of its bank accounts and fixed deposit. DAMEPL said the interest continues to apply till the date of actual payment by DMRC.

DMRC told the court that the Central Government has not granted sanction for diversion of funds in terms of their communications of April 13 and April 27, 2022, and that in terms of the liberty granted for raising loans, it has called for quotations /proposals for raising Capex loan from various banks for payment of the amount due and payable to DAMEPL.

DMRC said it expects to process the bids of the banks by July 10 and the signing of loan documents by August 15.

Noting the submissions made by the counsel for DAMEPL and DMRC, the court said it was of the view that as the challenge to the March 10 order was decided on May 5 and action has been initiated by the DMRC, time should be granted to DMRC to ensure payment of the outstanding amount to the applicant/decree holder (DAMEPL) on or before August 5, 2022.

On March 10, the high court had directed DMRC to pay over Rs 4,600 crore of the arbitral award along with interest to DAMEPL in two equal installments within two months. The first and second installments were to be paid on or before April 30, 2022, and May 31, 2022, respectively.

The March 10 judgement had come on DAMEPL’s execution petition filed against DMRC concerning an arbitral award of over Rs 4,600 crore passed in its favour on May 11, 2017.

The counsel for DAMEPL urged the court that DMRC shall not be granted any further time and be directed to immediately make a full payment towards the balance amount, that is, Rs 4451.63 crore as on May 31, 2022, along with further interest up to the date of actual payment.

He said the bank accounts and amounts lying in the credit of DMRC’s accounts along with fixed deposits, other financial investments, and daily revenue be attached towards satisfaction of the decretal amount.

The high court had earlier noted that during the pendency of these proceedings, the judgment debtor (DMRC) had made a payment of Rs 1678.42 crores.

An arbitral tribunal in its May 2017 award had ruled in favour of DAMEPL, which had pulled out from running the Airport Express metro line over safety issues, and accepted its claim that the running of operations on the line was not viable due to structural defects in the viaduct through which the train would run.

The arbitral award pertained to a concession agreement between the two entities, which was signed on August 25, 2008.

Under the agreement, DMRC was to carry out the civil works, excluding at the depot, and the balance, including the project system works, was to be executed by DAMEPL, a joint venture of Rinfra and a Spanish construction company -- Construcciones Y Auxiliar De Ferrocarriles -- with a shareholding of 95 and five per cent respectively.

DAMEPL had borrowed from 11 banks -- Axis Bank, UCO Bank, Punjab, and Sind Bank, Andhra Bank, Central Bank of India, Dena Bank, Allahabad Bank, Canara Bank, Bank of India, IIFC UK, and Canara Bank London -- to carry out operations on the line.

The Airport Express line was commissioned on February 23, 2011, after an investment of over Rs 2,885 crore, funded by the DAMEPL's promoters' fund, banks, and financial institutions.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Give Feedback