NCLT Rejects Bankruptcy Plea Against Mumbai Metro One, Relief for Reliance Infrastructure. In a significant development for Reliance Infrastructure (RInfra), the National Company Law Tribunal (NCLT) has dismissed bankruptcy petitions filed by State Bank of India (SBI) and IDBI Bank against its subsidiary Mumbai Metro One Pvt Ltd (MMOPL). This comes as a major sigh of relief for RInfra, which has been seeking an exit from the Mumbai Metro One project for several years.

The dismissal stems from a One-Time Settlement (OTS) agreement reached between MMOPL and all its lenders, including SBI, IDBI Bank, and Indian Bank, which had also filed an insolvency plea against MMOPL in January 2024. The details of the OTS agreement haven't been disclosed publicly, but it signifies an amicable resolution between the involved parties.

The bankruptcy petitions stemmed from outstanding dues owed to the lenders by MMOPL. The lender consortium, which financed the Mumbai Metro project, had a total debt claim of Rs 1,711 crore on MMOPL. SBI had initiated insolvency proceedings in August 2023, followed by IDBI Bank.

This development comes on the heels of another setback for RInfra earlier this month. The Supreme Court overturned its previous ruling that mandated the Delhi Metro Rail Corporation (DMRC) to pay an arbitration award of around Rs 8,000 crore to RInfra's subsidiary Delhi Airport Metro Express Pvt Ltd (DAMEPL).

However, the dismissal of the bankruptcy plea against MMOPL offers a glimmer of hope for RInfra. The company has been keen to exit the Mumbai Metro One project and the Maharashtra government has expressed interest in acquiring RInfra's 74% stake in MMOPL. The stake acquisition, valued at Rs 4,000 crore, was approved by the state cabinet in April 2024.

The dismissal of the bankruptcy petition paves the way for a smoother exit for RInfra and facilitates the potential acquisition by the Maharashtra government. This would allow RInfra to focus on other ventures and reduce its debt burden.

For MMOPL, the OTS agreement ensures its continued operations without the looming threat of bankruptcy. This stability is crucial for the ongoing maintenance and future expansion of the Mumbai Metro One line, a vital component of Mumbai's public transportation network.

The NCLT's decision has significant implications for the infrastructure sector in India. It highlights the importance of exploring amicable solutions like OTS agreements to resolve debt issues and prevent companies from falling into bankruptcy. Additionally, the case underscores the challenges faced by Public-Private Partnership (PPP) projects in India, where financing and debt repayment can become major hurdles.

Looking ahead, it will be interesting to see how the OTS agreement between MMOPL and its lenders is structured and how it impacts the future financial health of the company. The potential acquisition by the Maharashtra government also raises questions about the long-term ownership and management of the Mumbai Metro One line.

One thing remains clear: The NCLT's decision offers a reprieve for Reliance Infrastructure and ensures the continued operation of the crucial Mumbai Metro One line.