SC issues contempt notice to R Infra arm, Axis Bank over DMRC refund case

A bench of the court issued the notice to the parties for disobeying the court's orders to refund the money to DMRC that it had deposited in the escrow account

The Supreme Court on Wednesday issued a contempt notice to Reliance Infrastructure subsidiary Delhi Airport Metro Express Pvt Ltd (DAMEPL), its managing director (MD), as well as Axis Bank and its MD for failing to refund Rs 4,700 crore, including interest, to the Delhi Metro Rail Corporation (DMRC), as directed by the apex court on April 10. 

 

A three-judge Bench issued the notice to the parties for disobeying the court's orders to refund the money to DMRC that it had deposited in the escrow account. The court sought a response from the parties on why contempt proceedings should not be initiated against them.

 

 

Top officials from DAMEPL and Axis Bank are not required to appear before the court for now. This contempt notice was issued in response to a plea by DMRC. 

 

The Supreme Court on April 10 criticised its judgment of 2021 upholding a Rs 4,700 crore arbitral award against DMRC in favour of DAMEPL, saying the apex court “committed a grave miscarriage of justice by interfering with a Division Bench decision of the Delhi High Court”. Reliance Infrastructure is owned by Anil Ambani. 

 

The three-judge bench had said the judgment was perverse and patently illegal and held that the Supreme Court erred in interfering with the 2019 Delhi High Court's judgment which had set aside the arbitral award passed against DMRC.

 

The bench said the Supreme Court ought not to have interfered with the Delhi High Court's judgment under Article 136(Special leave to appeal by the Supreme Court) of the Constitution as it was a well-considered judgment. 

 

"By setting aside the High Court judgment, this court restored a patently illegal award which saddled a public utility with an exorbitant liability," the court observed. 

 

This resulted in a "great miscarriage of justice" which warrants the exercise of curative jurisdiction under Article 142(empowers SC to pass any order/decree) of the Constitution.

 

The court clarified that the amounts deposited by the DMRC shall be refunded. Any amount paid by DMRC as part of coercive action has to be refunded and the execution proceedings for the award must be discontinued. 

 

DMRC and DAMEPL have been at odds ever since the latter pulled out of the Delhi Metro Airport Line operations due to safety issues arising from structural defects. An arbitral court ruled in favour of the RInfra firm in 2017, asking DMRC to pay the arbitral award. The order was later upheld by the Supreme Court.