Righting a grave wrong: SC rules in favour of Delhi Metro corporation

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SETTING aside its own 2021 judgment, the Supreme Court has ruled that the Delhi Metro Rail Corporation (DMRC) is not obliged to pay Rs 8,000 crore to the Delhi Airport Metro Express Private Ltd (DAMEPL), a Reliance Infrastructure firm, in pursuance of a 2017 arbitral award. The court observed that its previous verdict had caused ‘grave miscarriage of justice’ to a public utility, which was saddled with an exorbitant liability. Stating that the award had ‘suffered from the vice of perversity and patent illegality’, the court has ordered that the amount already paid, if any, by the petitioner (DMRC) as a result of coercive action should be returned to it.

Commendably, the apex court has admitted that it had erred in interfering with the 2019 decision of a Division Bench of the Delhi High Court. The case has had its fair share of twists and turns. The arbitral award had been upheld by a single-judge Bench of the HC in 2018, only to be struck down by the Division Bench. The Anil Ambani-owned Reliance Infrastructure then approached the SC against the Division Bench’s order. A two-judge Bench of the top court restored the award. The DMRC’s plea seeking a review of the 2021 judgment was dismissed, forcing it to file a curative petition.

In 2008, the DAMEPL had entered into a contract with the DMRC for running the airport Metro line till 2038. However, the private entity stopped operating the Metro on the airport line, presumably over safety concerns; it invoked an arbitration clause, alleging violation of the contract, and sought the termination fee. The DMRC bore the brunt of the DAMEPL’s ‘illegal’ decision to terminate the concessionaire agreement. The apex court has finally righted a huge wrong and also demonstrated its ability to do self-correction. This augurs well for India’s justice delivery system. The judiciary at all levels should treat this judgment as a benchmark, especially in commercial matters where corporates browbeat public utilities.