Delhi High Court Upholds DMRC Decision To Grant In-Building Solutions Contract On Nomination Basis - 2025-09-04

Delhi High Court Upholds DMRC Decision To Grant In-Building Solutions Contract On Nomination Basis

The High Court of Delhi, in a significant ruling on September 4, 2025, dismissed a petition filed by Crest Digitel Private Limited challenging the Delhi Metro Rail Corporation Limited’s (DMRC) decision to award a license for In-Building Solutions (IBS) to Indus Towers Limited on a nomination basis. Justice Sachin Datta presided over the matter, underscoring the necessity of ensuring robust telecommunications infrastructure for public safety and operational efficiency.

Background of the Dispute

Crest Digitel, the petitioner, had previously secured a license agreement in 2019 to provide mobile connectivity, including IBS, for the Delhi Airport Express Line. However, the DMRC argued that the petitioner failed to meet critical performance obligations, including a failure to upgrade infrastructure to support 5G services. Consequently, the DMRC issued a Letter of Acceptance (LOA) to Indus Towers Limited in February 2025 to install and provide IBS, citing the urgency of providing seamless network coverage for commuters.

Core Arguments

Crest Digitel challenged the LOA, alleging that the DMRC acted arbitrarily by circumventing a competitive bidding process and providing preferential financial terms to Indus Towers. The petitioner claimed this threatened their business model and existing investments. Conversely, the DMRC contended that the petitioner had consistently defaulted on contractual duties, citing multiple penalties and persistent complaints from the Telecom Regulatory Authority of India regarding poor network quality. The DMRC asserted that the nomination of Indus Towers was a necessary step for "natural continuation" and urgent technological upgrades.

Legal Analysis and Judicial Reasoning

The Court’s analysis relied heavily on the Specific Relief Act, 1963 . Justice Datta noted that the Act imposes a strict statutory bar under Section 20A against granting injunctions for infrastructure projects where such intervention would impede or delay progress.

The Court further clarified that the DMRC was well within its rights under Rule 194 of the * GENERAL FINANCIAL RULES , 2017*, to opt for single-source selection during emergency situations or for critical infrastructure needs. The judge emphasized that the petitioner's own failure to roll out 5G services—despite the technology being live for over three years—justified the DMRC's intervention to protect public interest and safety.

Key Observations

• "This Court cannot lose sight of the fact that, despite the passage of more than three years since the launch of 5G services, the petitioner has neither installed nor rolled out 5G services."
• "Section 20A... imposes a complete statutory bar on the grant of injunctions qua infrastructure projects, where such injunction would impede or delay progress or completion of the project."
• "There is no reason to doubt the strenuous contention on behalf of DMRC that the impugned LOA in favor of respondent no.2, is a seamless and logical continuation of the existing License Agreement."

Decision and Implications

The High Court ultimately dismissed the petition, refusing to grant an injunction that would hinder the rollout of 5G infrastructure. To address the petitioner's grievance regarding discriminatory fee structures, the Court recorded an assurance that the license fee charged to Indus Towers would not fall below the rate currently paid by Crest Digitel (₹11,088 per square meter, per month). This ruling reinforces the judiciary's tendency to prioritize the timely completion of critical public infrastructure over private contractual disputes, provided the procurement process aligns with the * GENERAL FINANCIAL RULES *.