The Delhi Metro Rail Corporation (DMRC) has demanded a sum of Rs 3,500 crore from the Indian government in the form of interest-free subordinated debt to comply with the instructions of the High Court in the case of Delhi Airport Metro Express Pvt. Ltd (DAMEPL).
In a letter dated September 6, 2022, Vikas Kumar, Managing Director, DMRC wrote to the Secretary, Ministry of Housing and Urban Affairs stating that the total amount owed under the award was Rs 7,010 crore and that the Government of India should award Rs 3,500 crore to DMRC to satisfy the award and that DMRC would seek an identical amount from GoNCTD.
After DMRC’s special leave application against Delhi High Court’s order dated March 10, 2022 was dismissed on September 5, 2022, DMRC changed course and now suggested that they could not bear a debt of Rs 4,500 crore to satisfy the prize and therefore had to receive funds from its shareholders, namely GoI and GoNCTD in equal proportions to satisfy the prize. The DMRC board meeting held on September 21, 2022 discussed the matter and came to the conclusion that DMRC would request funds from both shareholders.
DMRC tried to drag out the enforcement proceedings indefinitely by trying to suggest different methods to comply with the award. Initially, in December 2021, DMRC tried to imply that it was willing to take over the debt of DAMEPL as well as its promoter company (R-Infra) for an amount equivalent to that payable under the Award . When DAMEPL agreed, DMRC backed down saying it could not take over R-Infra’s debt.
DMRC wrote to MoHUA on April 24, 2022 stating that DMRC was to pay the remaining amount (of Rs 2,613 crore, as calculated by DMRC) to DAMEPL in two installments by April 30, 2022 and May 31, 2022 respectively, according to the Delhi High Court Order dated 10 March 2022. As a result, DMRC requested GoI to award a sum of Rs 1,350 crore and DMRC had requested an identical sum from GoNCTD. Strangely, the letter was withdrawn by DMRC by another letter dated April 25, 2022 for review of the numbers.
Later, in May 2022, DMRC offered to raise a bank loan of Rs 2,700 crore to meet the price, although the outstanding amount was approx. Rs 4,600 crores. DMRC also wrote to MoHUA on May 18, 2022 to request a sovereign guarantee of Rs 2,700 crore to secure the loan. DMRC did not pursue this further and only reminded MoHUA on September 1, 2022 of the Sovereign Guarantee to get an interim response from MoHUA on September 5, 2022 (the next hearing in the Delhi High Court was scheduled to take place on September 6, 2022) that it was considering the request.
DMRC’s continued non-compliance clearly shows that it is not concerned about the high interest rate of SBI PLR+2% (currently 15.45%) that DMRC is required to pay under the award, which was upheld by the Supreme Court. Ironically, DMRC said in its affidavits in the Delhi High Court that it was negotiating with banks to reduce interest from 7.50% to around 6.85%, on the Rs 2,700 crore loan it was seeking from banks. In fact, DMRC incurred an additional amount of interest amounting to Rs 453 crore, from 10.09.2021 to 04.10.2022, just because of the delay in payment to DAMEPL so far.
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