SC asks HSVP to deposit in escrow 80 pc debt owed by Gurgaon rapid metro concessionaires

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New Delhi, Mar 26 (PTI) The Supreme Court Friday asked the Haryana Shehri Vikas Pradhikaran (HSVP) to deposit in an escrow account 80 per cent of the Rs 2,407 crore owed to lenders by two IL&FS companies, which were operating Rapid Metro lines in Gurgaon.

A bench of Justices D Y Chandrachud, M R Shah and Sanjiv Khanna directed HSVP to deposit 80 per cent of the debt due amount, as determined by the Comptroller and Auditor General (CAG), into the escrow within three months.

The debt due amount was the money owed by the two IL&FS companies to lenders, including banks, for developing and operating the two metro lines.

The direction came on the pleas by Rapid MetroRail Gurgaon Ltd (RMGL) and Rapid MetroRail Gurgaon South Ltd (RMGSL) claiming that HSVP was not complying with the orders of the Punjab and Haryana High Court to deposit in an escrow account 80 per cent of the debt due amount, while they settle their disputes via arbitration.

RMGL and RMGSL were special purpose vehicles created by IL&FS to develop and operate two metro lines connecting Sikanderpur Station on M G Road here to NH-8 and Sector 56, Gurugram.

The two companies had issued notices to HSVP, Haryana's urban planning agency, in June 2019 informing it that the agreements would be terminated from September 2019 due to alleged non-fulfilment of obligations by HSVP.

They had also demanded certain amounts as termination payments in accordance with the terms of the concession agreement.

HSVP had moved the high court against the termination notices of the two companies and the high court in September 2019 had directed the two companies to hand over operations of the metro lines to HSVP.

The high court had also asked CAG to ascertain the total debt due and directed HSVP to deposit 80 per cent of that amount in an escrow account.

It had also directed both sides to settle their disputes via arbitration.

The apex court, in its judgement, has said that its intervention in the matter was sought by RMGL and RMGSL 'having regard to the manner in which the proceedings before the High Court were being derailed'. It said that the matter was being frequently adjourned, even after filing of the CAG audit report, and 'this course of events indicates that the whole object and purpose behind setting down the timelines in the order dated September 20, 2019 stood the risk of being defeated'. 'This court has been constrained to intervene in the process in order to ensure that the sanctity of the understanding that was arrived at before the High Court on September 20, 2019 is duly maintained,' the bench said.

It also said in its 68-page judgement that RMGL and RMGSL on the one hand, and HSVP on the other, 're at liberty to pursue their rights and remedies in pursuance of the arbitration clause contained in the concession agreements on all matters falling within the ambit of the arbitration agreement, including the validity of the notices of termination, any past or future inter se claims and liabilities..' It also said that in the event of any dispute arising about the correctness of the CAG report, in regard to the determination of the debt due, any of the parties would be at liberty to raise a dispute in the course of arbitral proceedings.

It further said that on depositing of the amount in the escrow account, RMGL and RMGSL shall execute and handover to HSVP all documents which are required for effectuating the transfer of operations, maintenance and assets to HSVP or their nominees. With these directions, the apex court disposed of the plea moved by the two companies and said that the proceedings in the high court shall also stand disposed of. PTI HMP ABA MNL SA