The Delhi Metro Rail Corporation (DMRC) on Wednesday said before the high court that the Delhi government will not participate in the rights issue launched by DMRC to seek equity for payment of an arbitral award of Rs 3,565.64 crore to Delhi Airport Metro Express Private Ltd (DAMEPL).
“The liability for such payment of arbitral award does not rest with GNCT of Delhi,” the Delhi government told DMRC in a letter.
It also said that the shareholders cannot be held liable for payments arising out of disputes or contractual defaults.
“DMRC may raise money through the open market or via externally-aided funds or loans from the Centre to meet its liabilities,” the Delhi Government submitted.
On December 15, the DMRC had launched the rights issue to raise Rs 7,131 crore from existing shareholders — the Centre and the Delhi government — which own 50 per cent each in the company.
It was to put an end to DMRC’s tussle with Reliance Infrastructure (RInfra). DAMEPL is an arm of RInfra.
The decision of the rights issue was taken at a meeting of the DMRC’s board on December 13, a day after the Supreme Court cracked the whip on the urban transporter for repeatedly failing to pay DAMEPL Rs 4,500 crore as an arbitral award.
The issue will close on January 11, and DMRC has asked both its shareholders to subscribe equally (Rs 3,565.64 crore each) to the equity share capital. It had also said that if it is forced to pay the arbitral award, the operations of Delhi Metro would come to a halt.
The DMRC wrote a letter to its equity shareholders — the ministry of housing and urban affairs and the Delhi government on December 13 asking for the funds.
“This would require non-budgeted financial outflows during the financial year from the government exchequer,” it said.
The urban transporter added that this has to be done through the passing of the Appropriation Bill.
Meanwhile, the ministry of housing and urban affairs told DMRC that the matter is under examination.
The next board meeting of DMRC is scheduled on January 16.
The counsel for DAMEPL on Wednesday expressed anguish over the matter being stretched in the court.
He requested the court to fix a date by which the payment would be made.
After assurance of the attorney general and going through the affidavit of DMRC, the court held, “The appropriate authorities are hopeful the impasse will be resolved by January 16.” The matter will be heard again on January 19.
DMRC and DAMEPL have been at odds ever since the latter pulled out of the Delhi Metro Airport Line operations. It was due to safety issues arising from structural defects.
An arbitral court ruled in favour of RInfra in 2017. It asked DMRC to pay the arbitral award, which was later upheld by the Supreme Court.
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