On March 10 last year, the high court had directed the Delhi Metro Rail Corporation (DMRC) to pay more than Rs 4,600 crore arbitral award, along with interest, to Reliance Infrastructure-owned DAMEPL in two equal instalments within two months.

The first and second instalments were to be paid on or before April 30, 2022 and May 31, 2022 respectively.

"The 'Total DMRC Funds', 'Total Project Funds' and 'Total Other Funds' as existing on March 10, 2022 thus could not have been either touched, diverted, or repatriated post the passing of that order. March 10, 2022 would thus, for all purposes, be liable to be declared to be the decisive, determinative and crucial date," Justice Yashwant Varma said in a 133-page judgement.

The Friday's verdict was passed on an execution petition filed by DAMEPL against DMRC over payment of dues of an arbitral award passed in its favour.

The high court directed the Centre and the Delhi government, the two principal shareholders of Delhi Metro, to attend to DMRC's request for extension of sovereign guarantees or subordinate debt to enable it to make payment of dues of an arbitral award to DMRC, saying the sovereign governments cannot shirk from their liability to abide by binding judgements and decrees.

The court noted that the reduction in funds appears to have occurred in light of the communications which were exchanged between DMRC, the Union Ministry of Housing and Urban Affairs and the Delhi government commencing from April 6, 2022.

"The communications which have been placed on the record establish that DMRC approached the Union after the passing of the March 10, 2022 order for permission to utilise the funds standing to its credit.

"On receipt of that request, the Union ministry directed the DMRC to repatriate all monies held by it in respect of various projects taking the position that the unspent balance had been released in the form of equity and debt to enable DMRC to undertake necessary works for the Delhi Metro Phase-IV and that those funds could not be utilised by it for any other purpose.

"DMRC acting upon those directives of the Union appears to have proceeded to repatriate the aforesaid sums back to the Union ministry," it said.

It noted that as per the affidavit of DMRC as on January 3, 2022, 'Total DMRC Funds' were stated to stand at Rs 1520.63 crores. As on February 9, 2022, it was Rs 1,478.39 crore, as on February 14, 2022 it was Rs 1,452.10 crore. However, by the time DMRC filed its additional affidavit dated May 13, 2022, ‘Total DMRC Funds’ were shown to have drastically reduced to Rs 291.80 crores.

"The reduction in the funds held by DMRC is of significance since by this time, the court by its order of March 10, 2022 had already framed directions requiring the corporation to effect payments and liquidate the liabilities flowing from the award. The reduction in funds clearly appears to have taken place post the passing of the order," the high court said.

It said "if the Union ministry or Delhi government decline the request for providing sovereign guarantees or subordinate debt, the Union ministry shall forthwith and at the end of two weeks revert and repatriate all monies received by it from DMRC post March 10, 2022… so as to ensure that the credit balance of the DMRC, total project and total other funds reflects the balance as it existed on March 10, 2022."

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

In February this year, the court had noted that the total amount of the award with interest till February 14, 2022 was Rs 8,009.38 crore. Of this, a sum of Rs 1,678.42 crore has been paid by DMRC and an amount of Rs 6,330.96 crore is still due.

DMRC took a stand that it has no funds and despite efforts, the two stakeholders -- the Centre and the Delhi government -- have been unable to arrive at a consensus on the ways and means by which the amount payable under the award may be liquidated.

-With PTI Input