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This Share Fall 13% Due To A Decision Of The Supreme Court; Hit Lower Circuit

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Reliance Infrastructure Ltd (NSE: RELINFRA) Share Price: The shares of Anil Ambani’s company Reliance Infrastructure fell by 20 percent on April 10 and hit the lower circuit. Today also this share down by 12.96 percent and closed at Rs 198.10. 

The Supreme Court has given its decision in favor of DMRC on a petition related to the ongoing dispute between Reliance Infrastructure and DMRC. 

The court decided that DMRC does not have to pay the sum of Rs. 8 million in compensation to Delhi Airport Metro Express Private Limited (DAMEPL) (DAMEPL), a Reliance Infrastructure company. The order to pay this amount was given by an arbitration tribunal in the year 2017.

Reliance Infrastructure shares opened at Rs 182.10 on BSE in the morning and reached a high of Rs 208.70.

Curative Petition Allowed

On the 10th of April, a court headed by Chief Justice DY Chandrachud granted the curative petition filed by Delhi Metro Rail Corporation (DMRC) against the rejection of the revision petition filed against the arbitral court’s decision. DMRC had made a curative request against this decision.

However, DMRC’s appeal and review petitions challenging the arbitration court’s decision to pay Rs 8000 crore to Delhi Airport Metro Express Pvt Ltd were dismissed by the Supreme Court. The Supreme Court heard the curative petition and reserved the decision.

DMRC had got relief in this case from the division bench of the Delhi High Court, which had set aside the 2017 arbitration court award. After this, a two-judge bench of the Supreme Court upheld the validity of the arbitration court’s decision. DMRC had filed a curative petition against this order. 

The Supreme Court said that the court erred in judgment by interfering with the order of the Division Bench, causing a serious miscarriage of justice. The court ordered that all execution proceedings at the Delhi High Court will be put on hold.

What Caused The Controversy To Begin?

in 2008 DAMEPL signed an agreement together with Delhi Metro to run the first privately-owned city rail line until 2038. This project was part of the Airport Metro Express Line from New Delhi Railway Station to Sector 21 Dwarka.

DMRC was responsible for the construction of all civil structures, while the system work was the responsibility of DAMEPL. DAMEPL suspended operations in July 2012 after some deficiencies were found. 

After inspection of this line, approval was given to resume operation in January 2013. DAMEPL resumed operations but abandoned the project in June 2013. 

Due to the dispute that arose after this, the matter reached the arbitration court. The decision was in favor of DAMEPL. 

DMRC opposed its decision before the Delhi High Court. Later this decision also reached the Supreme Court. 

The value of the amount that DMRC was asked to pay to DAMEPL in this case by the arbitration court has now increased to Rs 8,000 crore.

Reliance Infra Did Not Receive Any Funds 

Following an order of the Supreme Court order, Reliance Infrastructure confirmed in an exchange document that the order, which was issued on April 10 2024 does not confer any liability on the company. The company hasn’t received any funds from DMRC/DAMEPL as part of the arbitration.

55% Rise In Reliance Infra In One Year

Reliance Infrastructure shares had touched its 52-week high of Rs 308 on April 4, 2024. The stock’s 52-week low of Rs 131.40 was seen on May 19, 2023. 

The market cap of Reliance Infrastructure has come down to Rs 9000 crore. The shares of the company have experienced an increase of 55 percent over the past year.

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