NEW DELHI: In a big relief to the Delhi Metro Rail Corporation (DMRC), the Supreme Court on Wednesday, in its verdict reversed its previous decision that mandated the PSU to pay an arbitration award of Rs 8,000 crore to Delhi Airport Metro Express Private Limited (DAMEPL), a subsidiary of Reliance Infrastructure.
While allowing the curative plea filed by the DMRC, a bench of the top court, headed by CJI DY Chandrachud, said that the arbitral award suffered from illegality and also saddled a public utility with a huge liability. The court added that the arbitral award caused a huge miscarriage of justice.
The top court effectively restored a judgment rendered by a Division Bench of the Delhi High Court which had ruled in favour of DMRC before the Supreme Court had set aside the same in September 2021.
Reliance Infra said that the court’s order does not impose any liability on the company. It has not received any money from the DMRC under arbitral award. The interference by the apex court, in its earlier decisions, had resulted in restoring a patently illegal award, it said.
“The Division Bench applied the correct test in holding that the arbitral award suffered from the vice of perversity and patent illegality. The findings of the Division Bench were borne out from the record and were not based on a misappreciation of law or fact. This Court failed, while entertaining the SLP under Article 136, to justify its interference with the well-considered decision of the Division Bench of the High Court,” it said.
The decision of this court fails to adduce any justification bearing on any flaws in the manner of exercise of jurisdiction by the high court’s division bench under the Arbitration Act, it said.
“By setting aside the judgement of the Division Bench, this Court restored a patently illegal award which saddled a public utility with an exorbitant liability,” it said, adding that this warrants the exercise of the power under Article 142 in a curative petition, said the bench which also comprised justices B R Gavai and Surya Kant.
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 crores plus interest in terms of the concession agreement. This amount had swelled up to Rs 8,009.38 crore by February 14, 2022.