'Law Not Different For Govt': Supreme Court Directs Execution Of Arbitral Award Secured By DAMEPL Against DMRC In 3 Months

Earlier this week, the bench had instructed to the government to design a timeline for settling the dues of Rs 4,520 crore owed to DAMEPL. Refusing their request for the grant of four weeks to furnish a response, Justice Gavai had remarked, "On one hand there are public speeches on making India an international arbitration hub, but on the other, why is there no effort for enforcement of an award? The award upheld by the court has to be followed." In response, on Tuesday, one day after the top court pulled it up, the Delhi Metro Rail Corporation submitted an affidavit stating that a board meeting was held on December 13, which approved the agenda of raising equity share capital by asking its two equity shareholders, namely, the Union Ministry of Housing and Urban Affairs (MoHUA) and the government of the National Capital Territory of Delhi, to subscribe to its share capital, in order to meet the liability arising out of the arbitral award. "This procedure is necessary for the purposes of getting the equity shareholders to discharge their respective liability even though meetings have already been held in the above regard," the affidavit stated. The Attorney-General, R. Venkataramani, explained, "This is just a manner of processing things."

On behalf of the Reliance-owned company, Senior Advocate Harish Salve pointed out that the funds required to settle the dues owed to them could only be made available after the passing of appropriation bills. "Non-budgeted financial outflows during the currency of the Financial Year [would have to be sought] from the Government exchequer, both of Union and state. This has do be done through passing of Appropriation Bill in due compliance of rules of business and procedures, including requisite approval. On such passing of Appropriation Bill, funds will be available for disbursal," the metro rail corporation had submitted in the 12-page long affidavit. Taking severe objection to the proposed timeline, Salve said, "The money will be made available when the budget is passed…If the budget is passed." He added, "There is not a word in the affidavit that the governments have agreed to make the payment. What they are saying is, payable if able, not when able." "For the AAP government and the Union government, that would have been a pleasant change," the senior counsel said, caustically.

The Attorney-General remonstrated, "I do not have money or gold in some bank account that I can just give it. It has to go through a certain process. The Parliament will of course have to pass a bill to apportion funds." The top law officer assured, "It will happen." Justice Gavai asked, "The question is, when? After 10 years? After 20 years?"

Salve further said, "There is no special law that exempts DMRC from execution proceedings, only certain assets are exempted. If they are unable to commit, I will go and attach their revenue. This circus has to come to an end." The Attorney-General hotly responded, "Please do not call it a circus, it is a serious matter." Salve countered, "After a hearing in court, you pass a resolution saying you will get money from shareholders…If a private company had done this for an arbitral award, Your Lordships would have called the Managing Director here and asked him to pay in two weeks or be sent to jail!" To the bench, Salve asked, "Why should the law not take its normal course? Why can I not go after its managing director for contempt? If it happened to a private company, Your Lordships would not have, for even a moment, countenanced this kind of an approach."

Earlier in March 2022, the Delhi High court, after hearing the execution plea of DAMEPL, had passed an order directing the corporation to pay the entire amount in two equal instalments by 30 April and 31 May 2022. "The corporation is in contumacious defiance of this order…And, they have the temerity to tell this court that on December 13, they passed a resolution asking equity shareholders to pay. Are they not taking the judicial process for granted?" Salve passionately exclaimed, leading to the war of words intensifying.

Interrupting the counsel busy trading barbs, Justice Gavai said, "We are not going into all these. We will only direct the High Court to proceed further with the execution and take it to its logical end in accordance with the law." The only course of action open to the metro rail corporation was pursued, which was a bona fide course of action, Venkataramani tried explaining. "The bona fides are clear. After this court passed an order and made certain observations…Nevertheless, it may be bona fide to you. You satisfy the High Court. If the judge is not satisfied, he may take such remedies as permitted under the law, including contempt. Prima facie, the directions of the High Court have been disobeyed." Justice Gavai observed.

Justice Gavai then proceeded to dictate the order, "The arbitration award passed in favour of the present petitioner has reached finality inasmuch as the special leave petition filed against it has been dismissed in an elaborate judgement by this court in September 2021. In spite of that, the matter is only being adjourned by the Single Judge from time to time. The law with regard to execution is not different for the government or the statutory corporation. We, therefore, direct the High Court to proceed with the execution of the award expeditiously in accordance with law and take it to its logical end as early as possible, and in any case, within a period of three months from today." While pronouncing the order, Justice Gavai also noted that although ordinarily, the apex court would not entertain a petition arising from an order of adjournment, in this case, it was compelled to, since the High Court had adjourned the matter several times in spite of the fact that it had reached finality.

This case has arisen out of the non-payment of termination fees to DAMEPL, owned by Anil Ambani's Reliance Infrastructure Limited, by the Delhi Metro Rail Corporation despite terminating a contract for running the airport metro line before the expiry of the contract period. The government corporation has been utilising the project assets constructed or installed by DAMEPL as well as the project revenues since July 2013, Mint has reported.