The Supreme Court on Monday directed the Delhi high court not to further delay the execution of an award of over ₹7200 crore payable by the Delhi Metro Rail Corporation (DMRC) to a consortium headed by Anil Ambani-led Reliance Infrastructure Limited (RInfra) which operated the Delhi Airport Metro Express till 2012. The decree became ripe for payment after DMRC’s challenge against the award was dismissed by the Supreme Court on September 9.
The Delhi Airport Metro Express Private Limited (DAMEPL) – a consortium of Reliance Energy Limited (renamed as Reliance Infrastructure) and Construcciones y Auxiliar de Ferrocarriles SA –had subsequently approached the Delhi high court on September 12 for execution of the award but complained of delaying tactics by DMRC. On eight occasions, the petition was listed and on January 11, the high court posted the matter to March 29. The DAMEPL approached the top court challenging this order.
A bench of Justices L Nageswara Rao and BR Gavai, while disposing the petition asked the two sides to appear before the high court on January 31 and request for an early disposal of the execution proceedings. “Without commenting on the submission of either side we are of the opinion that hearing of the execution application does not brook any further delay…. We request high court to dispose of the execution application without any further delay as consequence of delay is detrimental to the petitioner and respondent (DMRC).”
Senior advocate Mukul Rohatgi who appeared for DAMEPL informed the Court that so far, only a token sum of ₹1000 crore has been paid by DMRC on December 8 in the execution proceeding and as on January 11, the sum recoverable from DMRC is ₹6268.87 crore. Rohatgi pointed out that his clients are not willing to settle the matter out of court with DMRC and urged that a deadline should be set for DMRC to make the payment.
The bench asked DMRC, “There is an award in their favour approved by this Court and now you are seeking a settlement.”
Senior advocate Parag Tripathi appearing for DMRC said, “There are several issues in execution. The whole Metro operation will come to a close, not just here in Delhi but in five other cities.” He referred to a communication addressed by DMRC to DAMEPL on January 6 making an offer to consider undertaking the outstanding liability of DAMEPL and its holding company, RInfra towards banks. Tripathi informed that in this regard talks were on as DMRC will be better placed to negotiate with banks.
Rohatgi opposed saying, “I am not interested in talking to them anymore. With over ₹6000 crore hard cash in my account, I will be better placed to talk to my lenders. Let them give a plan by when they will pay. I will deal with my debtors.”
Tripathi informed the Court that following these negotiations, the Delhi high court had directed DMRC to place on record all assets. “We have since disclosed to the Court and they are agreeable to settle,” DMRC told the Court.
The bench said, “Who is to benefit from the pendency of these proceedings. You cannot compel a party to compromise. Now that they have disagreed to settle, we will request the high court to take up the matter at the earliest.”
Before the high court, the DAMEPL had stated that the total decree amount payable by DMRC as on September 10 was ₹7045.41 crore. Further, the DAMEPL in its petition before the top court said that delay of each single day was resulting in incremental daily interest on the decreed sum. Between September 10 and January 11, this amount cumulatively stands at ₹223.46 crore, DAMEPL stated in its petition filed through advocate Mahesh Agrawala.
With the HC ordering the matter to be listed on March 29, the petition said, “The high court instead of executing the decree by attaching the funds to the tune of ₹6208.03 crore admittedly available with the DMRC and lying in its various bank accounts towards partial satisfaction of the decretal amounts payable under the Award, embarked on a journey of acting as a conciliation court.”
The DMRC had filed an affidavit before the Delhi high court on January 10 making full disclosure of its funds that stood at ₹6208.03 crore.
DMRC had entered into an agreement with DAMEPL in August 2008 for the design, installation, commissioning, operation and maintenance of the 22.7 km Airport Metro Express Line from New Delhi Railway Station to Dwarka Sector 21 via Indira Gandhi International Airport. The agreement in the nature of public-private partnership required DMRC to undertake the design and construction of a basic civil structure for the project.
In May 2012, the Anil Ambani-led company complained of defects in design and quality in the installation of viaduct bearing that was denied by DMRC. A joint inspection committee was set up that gave its report in July 2012. This was followed by another letter by DAMEPL, giving 90 days for DMRC to cure the defects. On completion of 90 days, DAMEPL issued a notice terminating the agreement on 8 October 2012, accusing DMRC of defaulting on the agreement. DMRC, however, said that it had carried out the required rectifications.
While the dispute between the parties was pending before the arbitral tribunal, DMRC restarted the line after obtaining a certificate from the commissioner of metro rail safety on 18 January 2013.
The tribunal undertook a detailed enquiry into all aspects and found as many as 1,551 cracks in 367 girders and 80 girders with twists varying between 10 to 20 mm. The tribunal was of the opinion that these defects adversely impacted the integrity of the structure. As effective steps were not taken within the cure period of 90 days, the tribunal held that DMRC was in breach of the concession agreement.
The top court’s September 9 order upheld the order of the single judge of the high court, said, “It cannot be said that the view of the tribunal is perverse. Therefore, we do not concur with the high court’s opinion that the award of the tribunal on the legality of the termination notice is vitiated due to the vice of perversity.” On November 23, the Supreme Court even dismissed the review petition filed by DMRC, making the judgment final for execution.
