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TMI Blog2019 (9) TMI 1584X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, the facts are being extracted from the 1st Petition i.e. CWP No. 24949 of 2019. Shorn of unnecessary details, the concession contracts were entered into between petitioner No.2-Haryana Shehri Vikas Pradhikaran ['for short 'the HSVP'](formerly known as Haryana Urban Development Authority) with Rapid MetroRail Gurgaon Ltd. [for short 'the RMGL'] and with Rapid MetroRail Gurgaon South Ltd. [for short 'the RMGSL'] on 09.12.2009 and 03.01.2013 respectively for the development of Metro rail link from Delhi Metro Sikanderpur Station on MG Road to NH-8 and from Delhi Metro Sikanderpur Station on MG Road to Sector 56, Gurugram. Both the contracts were terminated by RMGL & RMGSL on 07.06.2019, to take effect w.e.f. 08.09.2019 after the expiry of 90 days, whereas, HSVP terminated both the contracts on 26.08.2019 forthwith. RMGL & RMGSL are the subsidiary companies of Infrastructure Leasing and Finance Limited [for short 'IL&FS'] which is before the National Company Law Appellate Tribunal [NCLAT] in the proceedings initiated under the provisions of the Companies Act, 2013. On 08.08.2019, NCLAT directed the Red Entities to seek the approval of Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion and control of the Metro link forthwith. There is no explanation as why HSVP did not take any steps to ensure smooth handing and taking over of the project by RMGL to HSVP, all this while. In so far as the question of validity of the termination notice issued by RMGL to HSVP is concerned, the issue is to be decided at an appropriate forum and not by the undersigned in terms of the afore-extracted direction by the Hon'ble NCLAT. 21. Accordingly, RMGL is permitted to hand over the possession and control of Metro link from Delhi Metro Sikanderpur Station on MG Road to NH-8 to HSVP, pursuant to the termination of the Concession Contract dated December 9, 2009, on or before, September 9, 2019. Needless to add that the said permission is without prejudice to the rights and contentions of the contesting parties to seek appropriate remedies in law to assail the validity and consequences of termination of the Concession Contract by both of them. It is, however, clarified that HSVP, shall be free to engage the service of RMGL, at the mutually discussed/negotiated charges to run the Metro link till, such time, appropriate/alternative arrangements are made to run the same." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced on the file of connected case." Order dated 09.09.2019 "We propose to pass this order in both the cases i.e. CWP Nos.24949 and 24951 of 2019. Although both the contracts dated 03.01.2009 and 03.01.2013 executed for both the lines of the Rapid Metro Rail at Gurgaon have been terminated by both the parties i.e. HSVP (previously known as HUDA") on 26.08.2019 (forthwith) and the RMGSL by giving 90 days notice with effect from 07.06.2019 which comes to an end on 09.09.2019. But the operations are still continuing under the orders of this Court dated 06.09.2019 till the midnight of 09.09.2019. After lengthy arguments addressed by counsel for the parties, the Court has found that 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 17.09.2019 and the order of stay granted on 06.09.2019 is also extended till 17.09.2019 till midnight. During the course of hearing, learned senior counsel appearing on behalf of the respondent has submitted that with the termination of the contract with effect from 09.09.2019, the respondent would not act as a concessionaire rather would a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 days (i.e. until October 16, 2019) during which (a) the 'debt due' as per financing documents in terms of the concession agreement may be determined by an auditor appointed by the Hon'ble Court; and (b) the process for transfer of the Metro Links may be undertaken under the supervision of two Hon'ble (retired) High Court Judges, one being nominated by RMGL/RMGSL and one being nominated by HSVP; ii) During this extended period since 9 September 2019 RMGL/RMGSL will act as agents of HSVP, RMGL and RMGSL will be responsible for all liabilities arising on account of their gross negligence and fraud during this time; iii) The conditions set forth in (i) and (ii) above are subject to an undertaking from HSVP that once the debt due is determined by the auditor appointed by the Hon'ble Court at least 80% of the 'debt due' so determined shall be deposited in the escrow account inter alia in terms of the Concession Agreement Escrow Agreement and Substitution Agreement. iv) The above proposal is made to safeguard immediate interest of the public sector lenders of the project and is without prejudice to the rights and remedies of RMGL/RMGSL under contract or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other information pertaining to the 'debt due' may be provided to CAG or the auditor so appointed with a copy to HMRTC and HSVP. (iii) Thirdly, during the transition period i.e the period during which O&M of the said Metro lines shall be transferred from RMGL and RMGSL to DMRC, RMGL & RMGSL have proposed to act as an agent of the HMRTC and HSVP during the said period. In this respect it is stated that it will lead to further complications. HMRTC and HSVP have transferred the amount of insurances and the entire control will remain with the RMGL and RMGSL during this period. RMGL and RMGSL shall continue their O&M in terms of concession agreements and the HMRTC and HSVP have no objection that RMGL/RMGSL may receive all the revenues arising from O&M and incur all expenses therefrom itself and pay the same as is being done currently. In other words the RMGL and RMGSL remain responsible and liable for all their acts and deeds with are generally associated with the running of the said Metro Lines, not limited to only the Gross negligence and fraud during this time. (iv) Fourthly, the aspect of HMRTC and HSVP undertaking to deposit the 80% of the debt due in Escrow Accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of operation and maintenance of both the Metro links shall start w.e.f. 23.09.2019. The operation and maintenance by RMGL and RMGSL shall be in terms of the order dated 09.09.2019 passed by this Court. It is needless to mention that in case of any clarification/modification, the parties shall be at liberty to approach this Court by moving an appropriate application(s) in these petitions. Both the parties have requested to appoint two retired Hon'ble Judges of the High Court on payment of suitable remuneration to supervise the aforesaid transfer and in this regard petitioners have suggested the name of Hon'ble Mr. Justice Kailash Gambhir (Retd.) and the respondent(s) has suggested the name of Hon'ble Mr. Justice V.K. Gupta (Retd.). Keeping in view the magnitude of work involved, we direct that Rs. 10.00 Lakh, towards remuneration, shall be paid to Hon'ble Mr. Justice Kailash Gambhir (Retd.) by the HSVP and remuneration to the tune of Rs. 10.00 Lakhs shall be paid to Hon'ble Mr. Justice V.K. Gupta (Retd.) by the RMGL-RMGSL. II) As far as "debt due" as defined under the concession contract is concerned, direction is issued to the Comptroller and Aud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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