Reliance Infra to get Rs 595 cr from DVC by July end

Reliance Infrastructure Ltd (Reliance Infra) is set to receive a sum of Rs 595 crore from Damodar Valley Corporation (DVC) by July 31.

Pursuant to an order passed by the Supreme Court on May 31, Chairman, DVC has furnished an undertaking on June 6, 2022 stating that DVC will comply with the direction to deposit a sum of Rs 595 crore in cash and Rs 303 crore by way of Bank Guarantee within July 31.

The directions for furnishing an undertaking have been issued to safeguard the interest of Reliance Infra whilst granting extension of time to DVC. The genesis of this matter is an arbitration dispute between Reliance Infra and DVC, wherein a 3-0 Award was passed in favour of Reliance Infra and an aggregate sum of Rs 1,250 cr approx comprising cash component of approx Rs 898 cr and release of 6 Bank Guarantees of approximately Rs 353 cr was directed to be paid by DVC.

The Award carries an interest obligation of 12 pc per annum upon DVC on the sum awarded ie, Rs 898 cr. The aggregate interest burden upon the tax payers, as accumulated by DVC, as on May 31 is approximately Rs 260 cr. In terms of the order dated May 31, DVC is now bound by its Chairman’s undertaking to deposit the Award amount of Rs 898 cr, in the mode prescribed, by July 31 albeit after elapse of nearly 2.5 years. Reliance Infra had also preferred a contempt petition against officials of DVC in view of DVC’s failure to comply with the Supreme Court’s order dated April 25 requiring DVC to furnish the deposit of Rs 595 cr in cash and Rs 303 cr by way of Bank Guarantees within 4 weeks.