Dredging Corporation of India Ltd told the Delhi High Court it has severe cash-flow constraints, making it difficult to pay an award of over Rs 51 crore to Mercator Ltd. Two attempts to auction its dredger to raise funds have failed.
Dredging Corporation of India Ltd, which has a market capitalisation of around Rs 2,900 crore, has told the Delhi High Court that it is facing severe cash-flow constraints and finding it extremely difficult to arrange funds to satisfy the award payable to Mercator Ltd, even as two attempts to sell its Dredger-XI failed. The disclosure came in an additional affidavit filed by the Corporation in execution proceedings before Justice Om Prakash Shukla.
According to Mercator, around Rs 51 crore plus interest remains outstanding. During the hearing on September 10, 2026, counsel for the Corporation told the Court that around Rs 12-15 crore would be paid before December 2026. The Court, however, noted that the comprehensive repayment proposal required under its earlier order had not been placed on record and directed the Judgment Debtor to file the proposal within eight weeks, warning that failure to do so would constrain the Court to take coercive action. The matters have been listed for November 17, 2026.
DCIL Cites Temporary Liquidity Mismatch
In its affidavit, DCIL said cash inflows from Ports were currently insufficient to meet its day-to-day operational and financial commitments. It also stated that almost all sanctioned overdraft and working-capital facilities with banks were being utilised for regular operations, including statutory and other essential payments. The Corporation attributed part of the pressure to substantial liquidated damages, penalties and other deductions imposed by various Ports, which it said had accumulated over the past five years and had become a considerable financial burden.
DCIL maintained that it continues to have a positive financial position and described the situation as a temporary liquidity mismatch rather than a reflection of its operational performance or financial viability. At the same time, it said arranging funds to pay the award, either fully or through instalments, was “extremely difficult” without affecting essential operations and other critical commitments.
Failed Attempts to Sell Dredger-XI
The Corporation’s attempts to generate funds through the sale of Dredger-XI have so far failed. In the first MSTC auction on July 14, 2026, the highest bid was Rs 9.20 crore, but it was rejected as being below the reserve value. A second auction on August 12, 2026 received a highest bid of Rs 9.30 crore, which was also rejected for the same reason.
DCIL said the auctions failed solely because the bids were below the assessed/revised reserve value and not because of any procedural irregularity, delay, omission or lack of bona fides on its part. It also said accepting a lower bid could have prejudiced Mercator by reducing the amount available towards satisfaction of the award.
The Corporation has now approached its empanelled valuer for a fresh assessment of the vessel’s current realisable market value. A revised reserve price will thereafter be fixed and the vessel re-auctioned through MSTC, with the process expected to be completed by December 2026, subject to requisite approvals. Once sold, the entire sale proceeds will be directly deposited with Mercator. DCIL said no sale proceeds are currently available as the vessel has not yet been sold.
DCIL has separately undertaken to pay Rs 1 crore on September 10 and another Rs 1 crore on or before October 10, 2026 towards the award, as stated in the affidavit.
The Corporation has also stated that Mercator’s interests remain secured as its assets stand attached to the extent of the awarded amount pursuant to the High Court’s January 23, 2020 order. It has claimed that it holds assets valued above the award amount.
On May 11, 2026, the High Court had permitted DCIL to conduct the e-auction of Dredger-XI through MSTC and directed that the entire sale proceeds be deposited directly into Mercator’s bank account. The Court had also directed DCIL to place on record a comprehensive proposal for satisfaction of the remaining award amount after such payment, failing which no further indulgence would be granted. The September 10 order noted that the proposal had not been filed.
Mercator was represented by Senior Advocate Dr Amit George and Advocate Smriti Churiwal, among others, while DCIL was represented by Senior Advocate Gautam Narayan and Advocate Mayank Bhargava, among others. (ANI)
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