IL&FS wins Gurgaon Rapid Metro case, Haryana Govt to pay Rs 1,925 crores

Anushka Khare Posted on: 2021-03-27 11:09:00 Viewer: 4,233 Comments: 0 Country: India City: Gurgaon

IL&FS wins Gurgaon Rapid Metro case, Haryana Govt to pay Rs 1,925 crores

New Delhi, India (Urban Transport News): The Supreme Court of India on 26th March 2021 passed an order directing Haryana Shehri Vikas Pradhikaran (HSVP) to deposit Rs 1,925 crores in an escrow account owed to lenders by two IL&FS companies, which were operating Gurgaon Rapid Metro in Gurgaon.

IL&FS Transportation Ltd on Friday said that the Supreme Court had passed an order in its favour in the Gurgaon Rapid Metro case. "As part of the judgment, the Apex Court directed the HSVP to deposit 80% of total ‘debt due’ (more than ₹2,400 crores), amounting to ₹1,925 crores, within three months, into the escrow account," the company said.

IL&FS was a concessioner of the Gurgaon Rapid Metro project developed through its two subsidiaries viz.  Rapid Metro Rail Gurgaon Ltd. (RMGL) and Rapid Metro Rail Gurgaon South Ltd. (RMGSL) in 2009 and 2013 respectively.

“Due to multiple unmet obligations by the authority [HSVP], IL&FS SPVs had terminated the concession agreements in September 2019 and demanded certain termination payments due to them under the agreement,” IL&FS said.

HSVP, however, refuted the contention of IL&FS subsidiaries and challenged the matter in the High Court of Punjab and Haryana. 

Auditors appointed by the Comptroller & Auditor General of India (CAG) submitted their report on the debt due and determined the same at ₹2,407 crores. Despite the CAG submitting the audit report, HSVP had refused to meet its obligations and pay the compensation as ordered by the High Court. IL&FS then moved the SC in January 2021.

“The High Court, after hearing both the parties, ruled in September 2019 that operations and maintenance of the metro link be handed over to HSVP, and directed the CAG to carry out financial audit of total debt due,” IL&FS said.

“HSVP was told to pay 80% of the debt due [as determined by CAG] in the escrow account within 30 days of submission of CAG report,” the infrastructure and the lending firm said.

"HSVP shall within a period of three months from the date of the present judgment deposit into the Escrow Account 80 per cent of the debt due as determined in the reports of the auditors dated 23 June 2020, in the case of RMGL and RMGSL respectively," said in the Order passed by Supreme Court.

"The deposit into the Escrow Account shall continue to be maintained in Escrow, subject to any order that may be passed by NCLAT or any competent statutory authority, and shall not be appropriated by the Escrow Bank without specific permission," further said in the order.

Copy of order also available with Urban Transport News and can be downloaded from the website of the Supreme Court of India.

The project was handed over to HSVP in October 2019 as per court orders.

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