In a big setback for the Anil Ambani group, the Supreme Court on Wednesday set aside its own three-year-old judgment that awarded Delhi Airport Metro Express (DAMEPL), a Reliance Infrastructure (RInfra) subsidiary, Rs 8,000 crore in a dispute with Delhi Metro. The court asked the company to return about Rs 2,500 crore it had already received.
The apex court said that the previous verdict caused grave miscarriage of injustice to a public utility which was saddled with an exorbitant liability.
Allowing the curative plea of the Delhi Metro Rail Corporation (DMRC) against the 2021 judgment, a special bench headed by Chief Justice D Y Chandrachud said the order of the Delhi High Court division bench was a well-considered decision and there was no valid basis for the Supreme Court to interfere with it.
The interference by the apex court, in its earlier decisions, had resulted in restoring a patently illegal award, it said.
“The judgment of the two-judge bench of this Court, which interfered with the judgment of the division bench of the High Court, has resulted in a miscarriage of justice,” it said.
Now, the amount paid by the DMRC to the Reliance Infrastructure firm in pursuance of the award has to be paid back to the PSU.
As per the arbitral award, DAMEPL was entitled to Rs 2782.33 crore plus interest in terms of the concession agreement. This amount had swelled up to Rs 8,009.38 crore by February 14, 2022.
The apex court had on September 9, 2021 upheld the 2017 arbitration award enforceable against DMRC and said there was a disturbing tendency of courts setting aside such awards.
It had quashed the Delhi High Court’s division bench order that set aside the arbitration award in favour of DAMEPL which pulled out of an agreement to run the Airport Express metro line over safety issues.
Later on November 23, 2021, the top court had dismissed DMRC’s plea seeking review of its September 9, 2021 judgement saying no case for review is made out. Aggrieved by this order, DMRC filed a curative plea, the last legal recourse in SC, in 2022 against the dismissal of the review petition.
It is quite rare, especially in commercial matters, that the top court has reversed its two decisions rendered in an appeal and then in review while entertaining a curative plea.
Observing that there was no valid basis for the apex court to interfere under Article 136 of the Constitution (Special leave to appeal by the Supreme Court), the apex court said its interference resulted in restoring a patently illegal award.
The SC verdict said the amounts deposited by the DMRC till date shall be refunded and restored the parties to the position in which they were on the date of pronouncement of the Delhi High Court verdict.
Reliance Infrastructure said in a statement that no liability has been imposed on it by the Supreme Court order. “Reliance Infrastructure wishes to clarify that the Order dated April 10, 2024, passed by the Supreme Court does not impose any liability on the company and the company has not received any money from DMRC/DAMEPL under the arbitral award,” it said.
The DMRC had challenged the arbitral award on several grounds, including that the notice of October 8, 2012 issued by DAMEPL terminating the concessionaire agreement related to running the airport metro line in the national capital was illegal.
In May 2017, an arbitral tribunal ruled in favour of DAMEPL, which had pulled out of the agreement, and accepted its claim that running the operations on the line was not viable due to structural defects in the viaduct through which the trains would pass.