Rs 4,500 crore refund to DMRC: Supreme Court issues notices to Reliance Infra Co, Axis Bank

New Delhi: The Supreme Court on Wednesday sought response from Reliance Infrastructure-owned Delhi Airport Metro Express Pvt Ltd (DAMEPL), Axis Bank and their managing directors as to why contempt proceedings should not be initiated against them for failing to comply with an order to return more than ₹4,500 crore, including interest, to Delhi Metro Rail Corporation (DMRC).

DMRC had filed a contempt-of-court petition against DAMEPL and Axis Bank, accusing them of "wilfully disobeying" the court's order to refund the amount that the corporation had deposited in an escrow account against an arbitration award. The apex court had in April set aside the 2017 arbitration award.

A bench led by Justice Surya Kant, however, exempted the top brass of DAMEPL and Axis Bank from personal appearance before it.

While scrapping the arbitration award of about ₹8,000 crore that DAMEPL had won against DMRC, the top court had also ordered a refund of the amount that the state-run corporation had deposited in an Axis Bank escrow account as per a Delhi High Court direction.

The refund that DMRC has sought includes ₹2,599.17 crore that it deposited and ₹1,935 crore in interest. It is also seeking a 2% interest on ₹2,599 crore till the actual date of refund, according to the contempt petition.

DMRC in its plea told the SC that pursuant to the April judgement, it had written to Axis Bank and DAMPEL for the refund of the amount. In May, DAMPEL said it had sent a letter to its lenders who had withdrawn or received the amount deposited in the escrow account. Axis Bank said it was examining relevant documents and sought time to respond. However, no amount has been refunded so far, DMRC said.

DAMEPL and its promoter company have been in financial stress and this arbitration award would have helped the group repay debts.

DAMEPL in a press statement on Wednesday said "DMRC has on various occasions paid approximately ₹2,600 crore into the escrow account maintained with Axis Bank" and that payments from it were made to its lenders, including 10 state-run banks including Canara Bank, UCO Bank and Bank of Baroda.

DMRC is in possession of the Airport Express Metro Line for the last 11 years and all profits and revenue accrue solely to DMRC, the statement said, adding: "...the money is with the lenders and the refund has to be made by the banks to DMRC.

DAMEPL operated the national capital's airport metro service under a contract with DMRC. In 2013, the company cancelled the contract with DMRC citing safety issues and invoked arbitration. The arbitral tribunal in its May 2017 award accepted DAMEPL's claim that the running of operations on the line was not viable due to structural defects in the viaduct through which the train would run. DAMEPL then moved the high court to recover about ₹3,000 crore toward enforcement of an arbitration award.

While the top court initially upheld the arbitration order, it later scrapped it after DMRC filed a curative petition.