High Court (India)

September 10, 2019

HC orders continuity of Gurugram Rapid Metro till Sept 17


[ by Legal Era News Network ]

gurgaon-rapid-metro

In a major relief to commuters, the Punjab and Haryana High Court on Monday ordered Rapid Metrorail Gurgaon South Limited (RMSGL) to continue to operate and manage the Rapid Metro Rail on both lines till September 17.

A bench comprising Justices Raksh Kumar Jain and Arun Kumar Tyagi said: “Till the next date of hearing September 17, the respondent shall operate and manage the Rapid Metro Rail at Gurgaon on both the lines but subject to reimbursement of the insurance and operation and maintenance cost by the petitioners in this period.” The court will further hearing into the matter on September 17.

The High Court decision is crucial in connection with the operational continuity of the Gurgaon Metro, the country’s first fully privately built rapid rail system.

This follows after the expiry of 90-day termination notice served by RMSGL and Rapid Metro Rail Gurgaon South Limited, the two Special Purpose Vehicles (SPVs) floated by Infrastructure Leasing & Financial Services (IL&FS) for the rail project. The notice was served on the Haryana Urban Development Authority (HUDA) on June 7. Gurgaon Metro is a crucial public utility carrying nearly 60,000 passengers every day and it is commonly referred as ‘Millennium City's daily commute lifeline’.

On Friday, HUDA had moved the High Court challenging the validity of termination notice. The development authority had sought courts directions in connection with the continuity of public utility by these two SPVs operating the metro link.

The court observed that after lengthy arguments addressed by counsel for the parties, in its view the dispute between the parties may be resolved by negotiation for which they both would require some time and, therefore, the hearing of this case is deferred to September 17 and the order of stay granted on September 6 is also extended till September 17 till midnight.

Chetan Mittal, counsel for Haryana Mass Rapid Transport Corporation Limited (HMRTCL) told the court that Justice D.K. Jain, appointed by National Company Law Appellate Tribunal (NCLAT) to oversee the processes, had given the nod to transfer assets, handing over the possession and to negotiate for operation and maintenance.

He said the contract between Rapid Metro Rail Gurgaon South Limited and Haryana Mass Rapid Transport Corporation Limited (HMRTCL) stood terminated from both the sides. “Some disputes relating to transfer of assets would take some time. But they are ready to go ahead, whatever be the operational costs as its continuation is in larger public interest,” he said.

The project, he said, has earned Rs 4 crore profit during three-month period. The total earnings were approximately Rs 18 crore, while the cost of operations were around Rs. 14 crore. Besides they were in touch with Delhi Metro Rail Project and other agencies.

In the last hearing on September 6, Mittal said the HMRTCL and the respondent had entered into an agreement, whereby the concessionaire was required to develop, operate and maintain metro link from Delhi Metro Sikandarpur Station on MG Road to Sector 56, Gurugram.

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