Will deposit Rs 600 crore for now in Reliance Infra firm’s account: Delhi Metro to HC

While the Reliance Infra-led company is praying that the DMRC be asked to forthwith deposit the entire amount of Rs 6,305.40 crore into the Project Escrow Account in compliance with the arbitral award, the DMRC has disputed the number and submitted that they only owe Rs 3,305 crore after payment of Rs 1,000 crore last year. DMRC Monday told the court that it employs over 15,000 people and is the lifeblood of Delhi as far as transportation is concerned.

“Because of Covid, there is a serious shortfall of users and, therefore, there is a huge revenue implication which has hit us that is a monthly loss of Rs 150 crore. I am a government undertaking. What I am proposing is Rs 600 crore upfront,” submitted the counsel representing the DMRC, while seeking more time for payment of the rest of the money.

Terming the amount offered by DMRC peanuts, the court said it was not acceptable. “You are the central government. You are the state government but despite that you are not realising….,” Justice Suresh Kumar Kait added.

Regarding the position of funds, the DMRC had earlier told the court that it has Rs 1,478.39 crore fund available in the banks under ‘DMRC Funds’ head, Rs 2,668.81 crore under ‘Project Funds’ – earmarked for Phase III and IV – and Rs 1,561.30 crore under ‘other than DMCR funds’ head, which have been provided to it by the Maharashtra and Bihar governments for construction of metro rail there.

Section 89 of The Metro Railways Act, 2002, states that only earnings of the metro railway administration can be attached by a court in execution of a decree or order. DMRC told the court that project funds and money given to it by other state governments cannot be used to pay off the debts.

DMRC argued that contractors are aware of the legal provision, which prevents any court from attaching its properties in execution proceedings, when they enter into contracts with it. The court, however, said, “Whosoever comes in your contact is also aware that one side is central government, other side is state government and (thinks) the money is safe. It is not that he is entering in agreement with a private person who has nothing, and nothing can be recovered.”

In 2008, DMRC had signed a contract with DAMEPL, related to the design, installation, commissioning, operation and maintenance of the line. DMRC in 2012 invoked arbitration after DAMEPL terminated the concession agreement on the ground that defects pointed out in construction were not cured by DMRC within the stipulated 90 days. The Supreme Court in September upheld the 2017 arbitral award favouring DAMEPL.