HC asks DMRC to settle immediate debts owed to banks by DAMEPL

The Delhi High Court has directed the DMRC, which has to pay Rs 5,164.79 crore to Reliance Infrastructure's (Rinfra) subsidiary DAMEPL as per an arbitral award, to settle the immediate amount the private company owes the banks for the Airport metro line project, so that its accounts are not termed non-performing assets.

Justice Vibhu Bakhru asked the Delhi Metro Rail Corporation (DMRC) to ascertain what is the immediate amount that DAMEPL has to pay to the 11 banks and to make the payment before March 28.

The court said that the accounts of Delhi Airport Metro Express Private Ltd (DAMEPL) in the 11 banks cannot be allowed to become non-performing assets (NPAs) despite having an arbitral award in its favour.

The direction came on an interim plea by DAMEPL claiming it has to pay over Rs 1,882 crore to the banks to prevent its accounts with them from being categorised as NPAs.

According to DAMEPL's plea, the 11 banks to whom immediate payments have to be made are -- 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.

The interim plea was raised by the company in its petition seeking enforcement of an an arbitral award of Rs 5,164.79 crore, including interest of over Rs 2,000 crore, granted in its favour by a tribunal in connection with the Airport Express premium corridor.

The award was upheld by the high court which on March 6 had given DMRC four weeks time to pay the amount.

DMRC, on the other hand, had contended that the immediate need of the company to service the debt was only around Rs 186.76 crore and not Rs 1,882 crore as claimed by DAMEPL.

Taking note of the stand taken by DMRC, the court directed it to send its officials to all the banks to ascertain "the immediate amount required to avoid the petitioner's (DAMEPL) account with the bank concerned to be classified as a NPA and if the account has already been classified as such, the minimum amount necessary to be paid to thebank for the account to be removed from the category of the NPA".

"DMRC shall ensure that the amounts so ascertained are paid to the credit of the petitioner on or before March 28," the court added.

On March 6, while dismissing DMRC's plea against the Arbitral Tribunal's May, 2017 order asking it to make payments to DAMEPL, the court had allowed a separate plea of the Rinfra subsidiary for an early payment of 75 per cent of the arbitral award in its favour.

According to the DAMEPL's earlier plea, the concession agreement was signed by the two parties 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, were to be executed by DAMEPL.

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

DAMEPL had said it had terminated the concession agreement as DMRC had not cured certain defects in the Airport Express line within 90 days of a notice issued by it.

It had also said the agreement had come to effect from January 1, 2013 and the project was handed over to DMRC on June 30, 2013. Till the handing over of the project, DAMEPL had operated the line as a deemed agent of DMRC, it had said.

The arbitration was entered into in August, 2013 after efforts to amicably resolve the issue did not yield any result.

DAMEPL is 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.

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