— Rahul Varman
[We regret the long delay in publishing this note, due to an oversight. It was received on May 1. – Editor.]
On 10th April 2024, in a very unusual development, the Supreme Court overturned its own order of 2021, in which it had awarded hefty compensation to the Reliance Infrastructure[1] subsidiary Delhi Airport Metro Express Private Limited (DAMEPL). The original award, including accumulated interest, was supposed to be around Rs 5,000 crores; this has inflated to Rs 8,000 crores at present. The award was supposedly a penalty against the Delhi Metro Rail Corporation (DMRC) for failing to keep its commitments in the Public Private Partnership (PPP) that was expected to run the Airport Express Line from New Delhi Railway Station to the International Airport and Dwarka in New Delhi. While the Line was constructed by DMRC, the rolling stock and related investments were to be made by DAMEPL. DAMEPL was then to operate the Line and share the revenues with DMRC, in recompense for their almost 50 per cent investment in the Rs 5,700 crore project.
After the 2021 Supreme Court judgment in favour of Reliance Infrastructure and its subsidiary DAMEPL, we had done an analysis of the entire journey of the PPP project (see https://rupeindia.wordpress.com/2022/01/03/public-private-partnerships-subsidy-and-impunity-for-private-corporations/). The story begins with the concession agreement in 2008 between the two parties; proceeds through Reliance’s walking out of it in 2013 soon after the operations began, when they could not make money out of it; and then travels through the different stages of the dispute in the Tribunal, High Court and finally the Supreme Court.
We observed how brazen had been the overall conduct of Reliance and its subsidiary, and hence how the Supreme Court award in its favour belied any commonsense notion of justice. Now that the judgment has been overturned in response to a curative petition filed by the Delhi Metro against the award in the Supreme Court, with the Court observing that its earlier bench had done “a grave miscarriage of justice by interfering with a Division Bench decision of the Delhi High Court”[2], one may like to believe that finally “justice has been delivered”[3]. This is how most of the media have presented the case, though unsurprisingly they were uncritical of the earlier Supreme Court judgment too.
However, we would take the opportunity of this new Supreme Court judgment to make a few brief observations on the whole matter:
- The most striking feature is the fickleness of the idea of justice in the existing judicial system. At every step, from the arbitral award to this final judgment, the rulings have been overturned at the successive stages, twice in the High Court and now twice in the Supreme Court. Note that this is a high-profile case – one of the most important PPP agreements, between two high profile corporate parties, with the project being right in the nation’s capital amidst the glare of the media. It is essentially the same set of facts that has been under discussion throughout. Note also that these five stages of ‘justice’ have proceeded from a high-profile tribunal to the High Court and then the Supreme Court. And yet each successive step meant a reversal of the previous judgment. Both sides have been armed with lawyers who would have charged a fortune in fees; and the whole matter has been in the courts for 11 years. One can see once again that common folk cannot even dream of getting justice from within this kind of maze.
- One also needs to be mindful that the Rs 8,000 crore that has been under contention is a large amount; for instance, more than what the Central Government has allocated for its flagship health insurance programme Pradhan Mantri Jan Arogya Yojana (PMJAY) to cover 120 million families[4] in the year 2024-25.
- One may wonder at the reasons for the decidedly unusual and sharp comments by the three-judge Supreme Court bench on its own previous bench. One can only speculate which of several factors might have tipped the scale against the Anil Ambani group in this case. On the one hand, it is striking that the DMRC has been running the Line successfully, and without any untoward incident, for more than ten years since Reliance walked out. So, it is very difficult to uphold Reliance’s justification for walking out, namely that the structures built by DMRC were unsafe. But the reason for the change in the court’s stance might be different. Could the change be related to the younger Ambani’s loss of clout in the corridors of power after the dramatic collapse of his financial fortune?
- And yet one must not lose sight of the fact that neither the new Supreme Court judgment, nor whatever has appeared in the media since then on the case, has anything to say about the larger issues that we had raised in our earlier commentary on the case – the efficacy of PPPs and privatisation, and most importantly, the lack of any accountability of big capital in India. In spite of the judgment coming at the time of parliamentary elections, there is no debate anywhere on these issues, including by any of the political parties. Which implies that this at best would be treated as a case of a ‘bad apple’, while the policy of incentivising big capital more and more continues unabated across the political spectrum. These are the real issues that this case reveals, and which need to be debated and discussed for a better understanding of India’s political economy.
The previous analysis of the case is available here:
Public Private Partnerships – Subsidy and Impunity for Private Corporations: Delhi Airport Metro as a Case Study
[1] A company belonging to the Anil Ambani group.
[2] The three-judge Bench, headed by the Chief Justice of India D.Y. Chandrachud, added that the judgment was “perverse and patently illegal”. See: Bhavini Mishra, “DMRC not required to pay Rs 8,000 crore to Reliance Infra arm, says SC,” Business Standard, April 11, 2024. https://www.business-standard.com/companies/news/dmrc-not-required-to-pay-rs-8-000-crore-to-reliance-infra-arm-says-sc-124041001101_1.html accessed on 30/04/2024.
[3] Though concerns have been voiced that such interventions by the Supreme Court, getting into the merits of the case, are not good for foreign investments!
[4] Jomy Jos Pullokaran, “FM allocates ₹7,500 crore to Ayushman Bharat PM-JAY,” CNBC TV18, Feb. 1, 2024. https://www.cnbctv18.com/economy/budget-2024-highlights-pradhan-mantri-jan-arogya-yojana-allocation-18941041.htm, accessed on 01/05/2024.
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