The Supreme Court of India has warned of taking action against Reliance Infrastructure subsidiary Delhi Airport Metro Express Private Limited (DAMEPL), Axis Bank, and Delhi Metro Rail Corporation (DMRC) over a refund issue. The dispute revolves around a refund of approximately Rs 2,500 crore, which DAMEPL and Axis Bank are required to pay to DMRC. The Supreme Court has given the parties one week to settle the dispute, failing which the law will take its own course.
The refund case dates back to 2012 when DAMEPL cancelled its contract with DMRC to operate the Airport Express Metro line in Delhi, citing structural defects. DAMEPL invoked an arbitration clause to seek a termination fee and associated costs, amounting to Rs 8,000 crore. The arbitral ruling of 2017 saddled DMRC with the liability of paying nearly Rs 8,000 crore to DAMEPL. However, the Supreme Court overturned this ruling on April 10, 2024, on a curative petition filed by DMRC, requiring DAMEPL to refund DMRC’s deposit from an escrow account maintained by Axis Bank.
The Supreme Court has expressed its dissatisfaction with the delay in refunding the amount and has warned of taking coercive action against the concerned officials of DAMEPL and Axis Bank. The court has also asked the Attorney General to act as a mediator to help resolve the dispute. The Axis Bank has submitted that it was not a party to the dispute for six years and is only operating the escrow account, but the Supreme Court has made it clear that it is not concerned with the claims and counterclaims of the bank.
The Supreme Court’s warning comes after it issued contempt notices to the directors of DAMEPL and Axis Bank in December last year for failing to refund the amount. The court has made it clear that it will not tolerate any further delay in settling the dispute and will take action if necessary. The matter has been posted for next hearing on May 14, and the parties have been given one week to settle the dispute. If the dispute is not settled, the Supreme Court will take coercive action against the concerned officials, which could have serious consequences for DAMEPL and Axis Bank.