Flawless Mobile Connectivity Necessary To Run Metro: Delhi High Court Rejects Appeal Against DMRC Discharging Contractor Over Failed Services

A division bench of Chief Justice DK Upadhyaya and Justice Tushar Rao Gedela upheld the single judge's finding that the Appellant-company's failure to roll out 5G services affected both commuters and the metro network itself, and was thus a ground to withdraw the contract from it.

The Court observed,

“It is to be noticed that poor services relating to Mobile connectivity not only causes inconvenience to the commuters but it also results in deficiency in meeting the commitment of the respondent no.1 for the reason that poor connectivity ultimately affects the ticketing facility and even operation of the Metro network itself.”

Briefly put, the work pertaining to the provisioning of InBuilding Solutions was awarded to the Appellant-Crest Digitel Private Limited back in 2019, requiring it ensure uninterrupted mobile network coverage for the passengers using metro train services.

As per DMRC, the Appellant “grossly failed” at this and the body had been receiving various complaints from commuters and users of the metro facility, particularly in relation to the underground sections of the metro line.

It submitted that service blackouts and interruptions in mobile network coverage pose a serious risk to passenger safety. To obviate these gaps, DMRC said it was compelled to engage Indus Towers (respondent no.2).

DMRC had invoked Rule 194 of General Financial Rules, 2017 to nominate the Respondent.

The Appellant argued that a public authority like DMRC is under obligation to grant any work for its execution only by way of resorting to the process of tender.

Rejecting the appeal, the High Court held,

“the situation which had occurred on account of consistent failure on the part of the appellant in execution of its work pursuant to the license agreement dated 03.01.2019, and also considering the objective of providing the services which is to provide better connectivity according to the needs of the commuters in the wake of frequent complaints about poor Mobile coverage affecting the operations of the respondent no.1 and overall commuters services, there exists sufficient reason to resort to the process of nomination as permissible under Rule 194 of the GFR.”

Rule 194 of the GFR permits single-source selection by nomination under certain conditions, according to which selection by direct negotiation/nomination is considered appropriate under certain circumstances.

The Court said that allocation of work through nomination was necessitated as “The appellant has consistently been found to have failed in discharging its contractual obligations…especially considering the interest of respondent no.1, which is to provide flawless Metro services and smooth running of its own operations.”

Reliance was placed on Nagar Nigam, Meerut v. Al Faheem Meat Exports (P) Ltd. & Ors. (2006) where the Supreme Court recognised grant of contract by private negotiation in exceptional cases, having regard to the nature of trade and largesse or for some other good reason.

As such, the appeal was dismissed.

Appearance: Mr.Mukul Rohtagi, Sr. Adv. and Mr.Dayan Krishnan, Sr. Adv. with Mr.Sahil Naran, Mr.Madhavam Sharma, Mr.Vidush Sinha, Mr. Sukrit Seth and Mr.Keshav Sehgal, Advs for Appellant; Mr.Srinivasan Ramaswamy, Adv for R-1. Mr.Rajshekhar Rao, Sr. Adv. with Mr.Mehul Parti, Mr.Ashwani Malhotra, Ms.Shivangi Bajpai, Advs for R-2.

Case title: Crest Digitel Private Limited v. DMRC & Anr.

Citation: 2025 LiveLaw (Del) 1530

Case no.: LPA 588/2025

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