The Punjab and Haryana High Court passed an interim order to the Transportation Network arm of IL&FS to operate Gurgaon Rapid Metro Rail till September 17 midnight as a licensee. The court directed the Haryana Urban Development Authority (HUDA) to bear its operational cost while IL&FS would operate Gurgaon Rapid Metro.
The next date of the hearing of the case is fixed on September 17 to decide the matter related to the termination of the service contract between HUDA and Rapid Metro Rail Gurgaon Limited (RMGL) & Rapid Metro Rail Gurgaon South Limited (RMGSL), the two special purpose vehicles (SPVs) formed by the IL&FS.
The Gurgaon Rapid Metro is the country’s first fully privately-developed project which was built by the IL&FS and the company is now facing bankruptcy proceedings in the National Company Law Appellate Tribunal (NCLT), putting the rail service at risk of closure.
In its order issued on September 9, the high court said, “Rapid Metro Gurgaon Limited (RMGL) would not act as a concessionaire and would rather act as an agent,” even as the counsel for Haryana Government submitted that the respondent can act as a licensee.
All parties have also agreed to a termination of contract on payment of at least 80 percent amount to RMGL/RMGSL by the Haryana Government. This would amount to nearly Rs 1,800 crore in payment to IL&FS.
In order it has been said that the court has found that the dispute between the parties may be resolved by negotiation for which they would require some time and, accordingly, it deferred the hearing of the to September 17.
The parties also agreed to a time-bound handover of the project by IL&FS to HUDA, with the court seeking detailed modalities of how the transfer would work out between them. The new development came after the expiry of the 90-day termination notice served by RMGL & RMGSL to HUDA on June 7, which came to end on September 7.
HUDA had moved a petition before the high court on September 6 challenging the validity of the termination notice and sought courts directions on continuity of the Gurgaon Rapid Metro by these two operators. RMGL and RMGSL to oversee IL&FS resolution process, to transfer the Gurgaon Rapid Metro to HUDA.