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2021 Supreme(SC) 1126
SUPREME COURT OF INDIA
ARUN MISHRA, DEEPAK GUPTA, JJ.
M.C. Mehta – Appellant
Versus
Union Of India & Ors. - Respondent
Writ Petition(s)(Civil) No(s). 13029 of 1985, Civil Appeal Nos. 4908-4909 of 2019
Decided on : 06-09-2021
Advocate Appeared:
Mr. Harish N. Salve, Sr. ADVOCATE (A.C.)[NOT PRESENT], MS. APARAJITA SINGH, SR. ADVOCATE (A.C.), MR. A.D.N. RAO, ADVOCATE (A.C.), MR. SIDDHARTHA CHOWDHURY, ADVOCATE (A.C.), Mr. A. N. S. Nadkarni, ASG, Mr. Wasim A. Qadri, Sr. Adv., Mr. Rajesh K. Singh, Adv., Ms. Ruchira Gupta, Adv., Ms. Archana Pathak Dave, Mr. D. L. Chidananda, Ms. Suhasini Sen, Mr. S. S. Rebello, Mr. M. Samantaraj, Mr. Raj Bahadur, Mr. Anil Katiyar, Mr. G.S. MAKKER, Ms. Snidha Mehra, Mr. B.K. PRASAD, Mr. B. V. Balramdas, Mr. Merusagar Samantray, Ms. Smita Chaudhury, Mr. K. Luikang Micheal, Mr. Dhruv Mehta, Sr. MR. CHIRAG M. SHROFF, Ms. Mahima C. Shroff, Ms. Yashika Verma, Mr. Anil Grover, Mr. Yoginder Handoo, Ms. Puja Kalra, Mr. Virendra Singh, Mr. SANJAY KR. VISEN, Ms. Ritu Rastogi, Ms. Sasmita Tripathy, Ms. Sangeeta Joshi, Mr. ABHISHEK, Ms. RUCHI KOHLI, Mr. B.V. BALRAMDAS, Ms. ANIL KATIYAR, Ms. GARIMA PRASHAD, Mr. G. S. Oberoi, Mr. Mohit Kumar Bansal, Mr. Praveen Swarup, Ms. Puja Kalra, Mr. B. C. Santosh Kumar, Mr. Karmendra Pratap Singh, Mr. Virendra Singh, adv
The responsibility for operational loss, loan repayment support, and land cost sharing for Delhi Metro Phase IV.
Headnote:
EPCA - Delhi Metro Phase IV Disputes - [Issue 1: Bearing the operational loss, Issue 2: Repayment of JICA loan in case of default or currency fluctuation cost on JICA loan, Issue 3: Sharing of land cost] - The court considered the disputes raised by the Government of NCT of Delhi regarding the operational loss, repayment of JICA loan, and sharing of land cost for Delhi Metro Phase IV. The court analyzed the positions of the Government of India and the Government of NCT of Delhi, along with the EPCA's examination of the issues. The court concluded that the operational loss, if any, should be borne by the State Government, the responsibility to provide support for loan repayment lies with the Government of NCT of Delhi, and the land cost should be shared between the Government of NCT of Delhi and the Union of India.
Fact of the Case:
The court considered the disputes raised by the Government of NCT of Delhi regarding the operational loss, repayment of JICA loan, and sharing of land cost for Delhi Metro Phase IV.
Finding of the Court:
The court found that the operational loss, if any, should be borne by the State Government, the responsibility to provide support for loan repayment lies with the Government of NCT of Delhi, and the land cost should be shared between the Government of NCT of Delhi and the Union of India.
Issues: Disputes raised by the Government of NCT of Delhi regarding the operational loss, repayment of JICA loan, and sharing of land cost for Delhi Metro Phase IV.
Ratio Decidendi: The operational loss, if any, should be borne by the State Government, the responsibility to provide support for loan repayment lies with the Government of NCT of Delhi, and the land cost should be shared between the Government of NCT of Delhi and the Union of India.
Final Decision: The objections raised by the Government of NCT of Delhi and EPCA Report 97 are disposed of. The parties are directed to act accordingly forthwith and ensure that no delay is caused in the Phase IV and the requisite amount is released timely to the acquiring authority.
ORDER :
REPORT NO. 97 SUBMITTED BY EPCA
1. Heard the learned counsel for the parties.
2. With respect to Phase IV of Delhi Metro, we have considered the EPCA Report 97 dated 01.07.2019. There are three disputes raised by the Government of NCT of Delhi which are detailed in the Report and are reproduced hereunder :
| Issue | GOI Position | GNCTD Position | EPCA’s examination of issue | |
| 1. | Bearing the operational loss | To be borne by State Government | Shared 50:50 ratio between State and Union | As per data provided by DMRC there is no operational loss in the past 5 years. Also the DPR for Phase 4 of the project/projects the financial internal rate of return (FIRR) at 6.63 to 8.03% based on income accruals. |
| 2. | Repayment of JICA loan in case of default or currency fluctuation cost on JICA loan | As per 2017 policy, the State Government will provide support to ensure financial sustainability during operations. | GOI must bear 100% of this liability | DMRC has provided EPCA statement showing the projected year-wise JICA loan principle and interest payment from 2019-20 to 2048-49 for the loan already received. This repayment schedule has been factored into the financial management and projected income and expenditure of DMRC. Furthermore, DMRC has never defaulted on the loan repayment and there is no reason to believe that with the additional phase, this situation will change. The loan for phase 4 has still not been secured as matter of financial approval requires resolution between Delhi and Union Government. EPCA is of the view that this issue, however important in terms of the principle for the Delhi Government is notional as there is no reason to believe that there will be a default in payment of the loans. |
| 3. | Sharing of land cost | To be borne by state government. 2017 policy states that Central Government will provide support to metro projects in the form of equity and subordinate debt subject to an overall limit of 20% of the cost of the project. | To be shared in 50:50 ratio as Delhi metro ownership is 50% with Central Government | According to DMRC estimates the cost implication is 3 priority corridors is Rs. 1223.60 crore. |
3. With respect to bearing of the operational loss, as per the stand of the Government of India, it is to be borne by the State Government i.e. Govt. of NCT of Delhi. The Govt. of NCT of Delhi has taken a stand that the operational loss, if any, incurred be shared in 50:50 ratio between the State and the Union. The EPCA has examined the issue and has opined that as the DMRC has not suffered any operational loss for the last 5 years, it is not likely to suffer loss in future also. We find nothing objectionable that in case the Metro suffers any loss, that is to be borne by the State Government, as the Metro is the local conveyance within the State and considering the nature of the facilities, the loss, if any, should be borne by the State Government. However, the State Government has to ensure, at the same time, that its policies are such which do not cause any operational loss or otherwise due to the running of the Metro trains. Hence, we do not find any substance in the objection raised by the Government of NCT of Delhi.
4. With respect to the repayment of JICA loan in case of default or currency fluctuation cost on JICA loan, a policy has been framed by the Central Government considering the various Metro projects covering 6 States, excluding Rajasthan, which is bearing its own expenditure. For other six States, the policy has been framed, according to which, the State Government has to provide support to ensure financial sustainability during operations. So far, the DMRC has not made any default in repayment of loan. We do not find anything objectionable in case the Government of NCT of
