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2019 (9) TMI 1584 - HC - Companies LawValidity of termination order/notice - handing over the Metro link from the Delhi Metro Sikanderpur Station on MG Road to NH-8 to HSVP on account of termination of concession contract - challenge on the grounds that the period of 90 days shall start from the date of permission which has not been granted by Hon'ble Mr. Justice D.K. Jain (Retd.) - HELD THAT - RMGSL is permitted to handover the possession and control of Metro link from Delhi Metro Sikanderpur Station on MG Road to Sector 56, Gurugram to HSVP, pursuant to the termination of the Concession Agreement dated January 3, 2013. It goes without saying that this permission is without prejudice to the rights and contentions of the contesting parties to take recourse to appropriate legal proceedings to assail the validity and consequences of termination of the Concession Agreement by both of them. It is, however, clarified that HSVP, shall still be free to engage the services of RMGSL, albeit at the mutually discussed/negotiated terms and charges to run the subject Metro link till, such time, appropriate/alternative arrangements are made by HSPV to run the same. Petition disposed off.
Issues Involved:
1. Validity of termination notices. 2. Obligation to hand over Metro link. 3. Operation and management during the transition period. 4. Determination and payment of "debt due". Detailed Analysis: 1. Validity of Termination Notices: The petitions challenged the termination notices dated 07.06.2019 issued by RMGL and RMGSL, arguing that the 90-day notice period should commence from the date of permission by Hon'ble Mr. Justice D.K. Jain (Retd.). The court noted that the termination notice takes effect on the expiry of the 90 days from the date of notice, i.e., September 8, 2019. The court held that the validity of the termination notices would be decided at an appropriate forum, not by the present court. 2. Obligation to Hand Over Metro Link: Clause 24.6 of Article 24 of the concession contracts stipulates that upon termination, HUDA (now HSVP) shall take possession and control of the Metro link forthwith. The court observed that HSVP was obliged to take possession immediately upon termination by either party. The court permitted RMGL and RMGSL to hand over the Metro link to HSVP by September 9, 2019, without prejudice to the rights of the parties to seek appropriate remedies regarding the validity and consequences of the termination. 3. Operation and Management During the Transition Period: The court issued several interim orders to ensure the continued operation of the Metro link during the transition period. Initially, the court directed that the respondent (RMGL/RMGSL) continue operations until September 9, 2019, and subsequently extended this period multiple times. The court facilitated negotiations between the parties for a smooth transition and eventually directed that RMGL and RMGSL continue operations as agents of HSVP until October 16, 2019. The court also appointed two retired High Court judges to supervise the transfer process. 4. Determination and Payment of "Debt Due": The court directed the Comptroller and Auditor General of India (CAG) to appoint auditors to determine the "debt due" as per the concession contracts. The audit was to be completed within 30 days. HSVP was ordered to deposit 80% of the "debt due" in an escrow account within 30 days after receiving the audit report, subject to any orders by NCLAT or other competent authorities. The court also directed that any disputes arising from the audit report be resolved through arbitration as provided in the concession contracts. Conclusion: The court disposed of the petitions with the following key directions: - RMGL and RMGSL to continue operations for 30 days from September 16, 2019, under the supervision of appointed retired judges. - CAG to audit the "debt due" and HSVP to deposit 80% of the determined amount in an escrow account. - Disputes arising from the audit to be resolved through arbitration. - RMGL and RMGSL to provide necessary documents for the final transfer of operations and assets to HSVP after the payment of "debt due".
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