DMRC-DAMEPL dispute: Will wait for a week after which law will take its course, says SC

New Delhi: The Supreme Court on Wednesday said it will wait for a week for the settlement of the dispute over refund of nearly Rs 2,500 crore by Reliance Infrastructure subsidiary Delhi Airport Metro Express Private Limited (DAMEPL) and Axis Bank to the Delhi Metro Rail Corporation (DMRC), failing which the law will take its own course.

Senior advocate Abhishek Singhvi, appearing for Axis bank, told a bench of justices Surya Kant and N Kotiswar Singh that meetings are going on between both the parties for settling the dispute.

Singhvi said if Attorney General R Venkataramani can act as a mediator, though not in his official capacity, it will help resolve the dispute much faster.

The bench told Venkataramani to keep the details of managing directors of the private firm and the banks and other senior officials ready.

"We will wait for one week. If they settle the dispute, its fine otherwise the law will take its own course," the bench said as it posted the matter for next hearing on May 14.

On March 3, the top court said its verdict on the DMRC-DAMEPL dispute of last year needed to be followed in letter and spirit, or it will be bound to take coercive measures against the concerned officials of the private firm and Axis Bank.

It told DAMEPL and Axis Bank counsels, "What is the need to play hide and seek? When there is judgement, you need to comply with it in letter and spirit." The Axis Bank has submitted that it was not party to the dispute for six years and now suddenly it was receiving a contempt notice for payment.

It said the bank was only operating the escrow account in the dispute.

The bench also said that it was not concerned with the claims and counterclaims of the bank.

Venkataramani, appearing for the DMRC, said that all the earlier orders were passed against Axis Bank and it cannot be said that they were not aware of the proceedings.

The top court had asked Venkataramani to collate the names of the persons and their positions, saying the court will take coercive action, if the need arises.

In December last year, the top court issued contempt notices to the directors of Reliance Infrastructure subsidiary DAMEPL and Axis Bank for failing to refund nearly Rs 2,500 crore to the DMRC as per the apex court's verdict dated April last year.

The arbitral ruling of 2017 had saddled the DMRC with the liability of paying nearly Rs 8,000 crore to DAMEPL.

Subsequently, two successive challenges to the award were dismissed by the top court, in September 2021 and November 2021.

However, the two verdicts were overturned by the top court on April 10, 2024, on a curative petition filed by the DMRC.

The order required DAMEPL to refund DMRC's deposit from an escrow account maintained by Axis Bank.

The dispute pertains to the operation of the Airport Express Metro line in Delhi that was done by DAMEPL, which cancelled the contract in 2012 citing structural defects, and invoked an arbitration clause to seek a termination fee and associated costs, amounting to Rs 8,000 crore.

On April 10 last year, the top court set aside its own three-year-old judgment that awarded an Anil Ambani group firm Rs 8,000 crore in a dispute with Delhi Metro, and asked the company to return about Rs 2,500 crore it had already received, holding that the previous verdict caused "grave miscarriage of injustice" to a public utility saddled with an exorbitant liability.

Allowing the curative plea of the DMRC against the 2021 judgement, the top court said the order of the Delhi High Court's 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, resulted in restoring a patently illegal award, it said.

As per the arbitral award, DAMEPL was entitled to Rs 2,782.33 crore plus interest in terms of the concession agreement. This amount swelled to Rs 8,009.38 crore by February 14, 2022.

The apex court 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 quashed the Delhi High Court 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 dismissed DMRC's plea seeking a review of its September 9, 2021, judgement, saying no case for review was made out.

Aggrieved by this order, DMRC filed a curative plea, the last legal recourse in the Supreme Court, in 2022 against the dismissal of the review petition.

It is quite rare, especially in commercial matters, for the top court to reverse its two decisions rendered in an appeal and then in review while entertaining a curative plea.