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Law tweak to save Delhi Metro assets from seizure
In an office memorandum passed by the ministry of housing and urban affairs dated March 17, the central government said attaching DMRC’s assets would entail closure of DMRC, bringing the city to a halt
The Union Ministry of Housing and Urban Affairs (MoHUA) has proposed to amend section 89 of the Metro Railways (O&M) Act, 2002 to eliminate the possibility of any metro railway asset – including funds -- from being seized by court orders, days before a deadline for operator to clear ₹4,700 crore dues which, if it fails to, could lead to its assets being attached, according to a court warning.
In an office memorandum passed by the ministry of housing and urban affairs dated March 17, a copy of which HT has seen, the central government has stated that attaching DMRC’s assets in the matter would entail closure of the DMRC, bringing the city to a halt and impacting lakhs of people across NCR.
“A situation of this kind would not only cause inconvenience to lakhs of common people of Delhi-NCR, but also lead to an alarming situation where law and order in the city would be at stake. The central government being a custodian of the public good cannot allow such a lethal situation to rise.” the office memorandum said, seeking comments on the proposed legal amendments from within the ministry.
The ministry said the decision was taken because of a recent Delhi High Court order in the case of Delhi Airport Metro Express Private Ltd (DAMEPL) versus Delhi Metro Rail Corporation (DMRC), where the Court sought the view of the Central Government on whether it was willing to attach DMRC’s assets towards the satisfactory of the arbitral award in favour of DAMEPL. The Centre had refused to do the same during the proceedings.
“In view of this, the ministry is of the opinion to amend section 89 to make it absolute so that no attachment of properties or bank accounts or any asset of any metro railways can ever be carried out,” the memorandum added.
Urban development minister Hardeep Singh Puri had on March 6 described the Delhi metro as the lifeline of NCR and directed officials to revisit the act and ensure no such property could be attached in the future.
The existing section 89(2) of the law allows that the earnings of any metro railway across the country to be attached by a court in case of liabilities arising out of the project.
The proposal now asks for this subsection (2) to be deleted altogether, implying that any metro railway organisation would be beyond the purview of courts when it came to execution proceedings, unless it voluntarily gave its consent.
DMRC had signed a contract with DAMEPL in 2008 for designing, installing, commissioning, operation and maintenance of the Airport line, but it invoked arbitration in 2012 after DAMEPL pulled out of running the Airport Express metro line over safety issues.
An arbitral tribunal in May 2017 ruled in favour of DAMEPL, also accepting their claims that running the operations on the line was not viable due to structural defects in the viaduct through which the train would pass.
On March 10 last year, the Delhi high court directed DMRC to pay the over ₹4,600 crore as arbitral award, along with interest to DAMEPL in two equal instalments within two months. DMRC has however taken a stand that it has no funds and that its two stakeholders – the Centre and the Delhi government have not been able to come to a consensus as to how the amount will be paid.
The DMRC and the Delhi government did not comment on this proposed amendment (response awaited)
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