The Supreme Court on Monday restrained banks from declaring the debts of Reliance Infrastructure’s subsidiary Delhi Airport Metro Express (DAMEPL) as non-performing assets until further orders.
A bench headed by Justice SA Bobde said the loan, in principle, should be serviced by whoever is running the project as of now. Since April 10 last year, Delhi Metro Rail Corporation (DMRC) has been servicing the Reliance firm’s debt taken from a consortium of lenders for execution of the project.
The court will now hear the case in July.
DMRC has been running the Airport Express line since 2013 after DAMEPL pulled out from running the Airport Express Metro line over safety issues. The Airport Express line was commissioned on February 23, 2011.
The relief came on an application by DAMEPL seeking a direction to Delhi Metro Rail Corporation (DMRC) to pay/service its dues to its consortium of lenders led by Axis Bank. DAMEPL, which had stopped servicing debt after the single judge of the Delhi HC had ruled in its favour, said the total outstanding as on January 1, 2019, is `1,524.96 crore, which includes external commercial borrowing of $44.28 (`316 crore). The company had invested `2,802 crore in the project.
According to the application, DAMEPL and its promoter company are in financial stress and the latter’s loan accounts with several banks are on the verge of being declared NPAs. DMRC argued that it was running the Airport Express line only because Reliance Infrastructure’s arm “abandoned” the project midway.
Earlier, the SC had sought response from DMRC on an appeal filed by DAMEPL against the Delhi High Court’s division bench’s order that set aside an arbitration award of around `4,500 crore, including interest, in favour of the company. The division bench had on January 15 reversed the single judge’s decision. The single-judge Bench on March 6 last year had upheld the arbitration award and directed DMRC to pay the money to DAMEPL.
The arbitral tribunal in its May 2017 award had accepted DAMEPL’s 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.
Soon after launching a joint public private partnership to build, operate and run the Airport Express line on August 25, 2008, DMRC and DAMEPL’s pact fell apart over some defects in the line identified by the private concessionaire, which were allegedly not cured by DMRC. Citing the inability of DMRC to cure the defects, the Reliance arm terminated the contract and “abandoned” the project, saying that the CMRS certificate was granted with the conditions that the trains have to be run at reduced speed and frequency which would make the operations commercially unviable for it.
However, DMRC said it has been running the airport line since June 2013 when DAMEPL abandoned the project despite repairs of structural defects in November 2012. When all attempts at resolving the dispute failed, DMRC took the case to arbitration and an award was given in favour of DAMEPL. The award asked DMRC to pay nearly `3,000 crore, along with interest.