Delhi High Court Refuses Interim Relief To Commercial Space Licensee Against Delhi Metro Rail Corporation

The Delhi High Court has refused interim relief to QC One Solutions Pvt. Ltd. against Delhi Metro Rail Corporation's termination of a licence agreement for commercial spaces at three metro stations. The court prima facie found that the company had repeatedly defaulted on payment of licence fees and electricity dues despite multiple opportunities to cure the breaches.

Justice Vikas Mahajan, in an order passed on May 20, held that QC One Solutions had failed to establish a prima facie case for protection pending arbitration.

“In the absence of any contractual provision invalidating prior notices due to the mere passage of time, the alleged procedural infirmity cannot serve as a valid ground to grant equitable relief under Section 9 of the Act, rather it is borne out from the record that while the respondent repeatedly afforded the petitioner opportunities to cure their defaults, these opportunities appear to have been met with delayed and partial payments, thereby prima facie establishing a consistent pattern of breach regarding fundamental contractual obligations.," the court observed.

The dispute arose from a licence agreement executed on August 14, 2024. Under the agreement, QC One Solutions was granted rights to commercially use bare spaces at Lajpat Nagar, Shahdara and Govindpuri Metro Stations.

The agreement was for nine years and extendable by another six years. QC One was required to pay quarterly licence fees in advance and furnish an interest-free security deposit of ₹1.84 crore.

After taking possession of the spaces on an “as is where is” basis, QC One developed the premises for commercial use. It also entered into sub-licensing arrangements with third parties.

DMRC issued multiple cure and termination notices through 2024 and 2025 over unpaid dues before terminating the licence on March 2, 2026.

QC One moved the High Court, arguing that fresh notices should have preceded the termination and that the dues could have been adjusted against the security deposit held by DMRC.

QC One further argued that DMRC, being a public authority, had acted arbitrarily in a manner that disrupted its commercial arrangements.

DMRC opposed the plea. It relied on QC One's own letters dated December 29, 2025, March 3, 2026 and March 16, 2026, in which the company acknowledged outstanding dues and sought adjustment against the security deposit.

Rejecting the challenge, the court held that the earlier cure and termination notices had not lost legal force merely because time had passed, particularly when the dues remained unpaid.

"A plain reading of the aforementioned clause makes it evident that the right to deduct dues from the IFSD is a discretionary power reserved exclusively with the DMRC to recover penalties, damages, or its any other outstanding dues/claims. It does not grant the Licensee, i.e. the petitioner herein, any corresponding contractual right to demand that routine pending dues be adjusted against the IFSD in order to cure a payment default or to ward off an impending termination, nor the mere existence of a security deposit absolve the petitioner of its contractual obligation to make timely payments,” the court said.

Holding that QC One failed to satisfy the requirements for interim protection, the court dismissed the petition. It clarified that its observations were only prima facie and would not influence the arbitral tribunal.

For Petitioner (QC One Solutions Pvt. Ltd.): Advocates Rajat Wadhwa, Honey Jain, Ashish Batra, Devansh Khatter, Abeer Shandilya, Anshika Juneja.

For Respondent (Delhi Metro Rail Corporation): Advocate Srinivasan Ramaswamy.