The five sages of appeal, in one of India's longest stretching, most crucial and bitterly fought commercial disputes worth over Rs 8000 involving the DMRC (Delhi Metro Rail Corporation) and DAMEPL (Delhi Airport Metro Express), revolved around defects in the railway line, steps taken for the ratification of the defects and a certificate from CMRS (Commissioner of Metro Railway Safety). When the Supreme Court (SC) of India recently allowed a sixth layer of appeal in the commercial matter through a Curative Petition (CP), it shocked the legal fraternity since the court not only allowed reopening of a commercial dispute that had reached its Finality (Res Judicata) after 10 years of legal battle but overturned its own division bench order in an ugly display of judicial overreach.
The SC judgement on the DMRC CP went against its own set precedents in "Ssangyong Engineering & Construction Co. v. National Highways Authority of India" and "Associate Builders v. Delhi Development Authority" that had well defined the "Scope of Intervention of Courts in Arbitration Awards." As per these judgements the SC was clearly not supposed to intervene and interpret the 'technicalities' in a commercial dispute as were already adjudged by the Arbitration. Yet the SC ventured into this unchartered waters mainly on the basis of interpretation of the CMRS certificate.
So what is the CMRS certificate that proved to be so clinching and forced the SC on deciding an unprecedented Curative Petition in a commercial dispute and overturn its own order? Let's check the merits of the CMRS certificate and if it was actually worth the high voltage legal spectacle.
But before we go into the story, the conclusion of which you will read at the end, it is important to point out that SC's judgement has become a tool in the hands of every railway official in India to simply claim "there were no defects in the civil work or the railway line, in case of any mishaps" if the CRMS had certified it. Simply put, even if a misshape had happened due to defects, the CRMS certificate would be an effective alibi in the hands of unscrupulous officials, who would comfortably quote the SC judgement on DMRC CP.
But in the view of the railway engineers, a mere permission to operate a railway line, albite with a controlled speed that was less than originally envisaged on the papers, does not mean that no defects existed. It is purely this, that happed in the DMRC v/s DAMEPL matter, where the CRMS allowed "opening" of the railway line with a reduced speed of trains at 50 km/ per hour versus the agreed speed of 120 kmph. Does it mean that the defects highlighted by DAMEPL to DMRC did not exist?
Especially in the light that 22 apparent errors have been found in the judgement, some of which related to erroneous quoting of CMRS. What was not DMRC’s case before the Arbitration Tribunal has been used by the Curative Judgement to conclude that CMRS certificate meant that the defects had been cured or that at least effective steps have been taken to cure the defects in the cure period. The CMRS certificate never implied so, otherwise, DMRC would have to simply present the CMRS certificate and assert before the Tribunal that here was the proof that the defects had been cured.
Meticulous investigations and study of documents by experts has revealed apparent errors in the recent SC judgement on the Curative Petition brought by DMRC to overturn SC's own final order.
DMRC Case: The 22 Errors Apparent
https://businessworld.in/article/dmrc-case-the-22-errors-apparent-523924
The famed Delhi Airport Express Line
In 2008, DAMEPL led consortium was awarded a contract (concession agreement) for the design, construction, commissioning, operation, and maintenance of what is known as the Airport Metro Express Line Project (Project) in New Delhi. The Concession Agreement (CA) was for providing metro rail connectivity between New Delhi Railway Station and the Indira Gandhi International Airport where DAMEPL would run the trains at a speed of 120 kmph that would allow it to ferry more passengers and that would give it good revenues. DMRC was responsible for government clearances, civil works and land acquisition. DAMEPL had to take care of tech and design that mainly included installation, testing, and commissioning of various systems like rolling stock, power supply, overhead equipment, signalling, track system, platform, screen doors, ventilation, and other architectural aspects. Already, DMRC had failed to handover the metro line to DAMEPL in time and it had missed more than a couple of deadlines over completion of the civil work.
In May 2012, DAMEPL complained about issues relating to the installation of viaduct bearings and alleged that there were noticeable deformities and cracks at several locations. In its response, DMRC informed DAMEPL in June 2012 that, pursuant to its inspections, no bearings were found to be damaged but it admitted grouting material filled above or below the bearings was damaged/loosened. Due to this, DMRC advised DAMEPL to enforce speed restrictions for the safety of public. In October 2012, DAMEPL formally terminated the CA citing DMRC’s failure to rectify defects within the stipulated 90-day period. Citing persistent safety concerns and ongoing disputes, DAMEPL handed over the project to DMRC in June 2013 and since then onwards DMRC has been running the operations as the cost of investments put in by DAMEPL.
Role of CMRS And Its Crucial Certificate
As the name suggests, the commissioner of metro rail safety is supposed to inspect the entire rail line including the entire civil work and technicities and issue a certificate of how safe was the line and grant permission to open it.
The question that the SC judgement answered was whether any or all defects were deemed as cured if the CRMS granted permission for resumption of operations? The questions takes us first to the mandate of CMRS and under the Metro Railways (Operation and Maintenance) Act 2002, which authorises the CMRS to do the following:
CMRS Mandate
1. Duties of Commissioner
The law says that the Commissioner shall:
(a) inspect the metro railway with a view to determine whether it is fit to be opened for the public carriage of passengers and report thereon to the Central Government as required by or under this Act;
(b) make such periodical or other inspections of metro railway, its rolling stock used thereon and its other installations as the Central Government may direct;
(c) make an inquiry under the provisions of this Act into the cause of any accident on the metro railway; and
(d) discharge such other duties as are conferred on him by or under this Act.
2. Section 15 of the said Act says:
Formalities to be complied with before giving sanction to the opening of metro railway.-
(1) The Central Government shall, before giving its sanction to the opening of the metro railway under section 14, obtain a report from the Commissioner that-
(a) he has made a careful inspection of the metro railway and the rolling stock that may be used thereon;
(b) the moving and fixed dimensions as laid down by the Central Government have not been infringed;
(c) the track structure, strength of bridges, standards of signalling system, traction system, general structural character of civil works and the size of, and maximum gross load upon, the axles of any rolling stock, comply with the requirements laid down by the Central Government; and
(d) in his opinion, metro railway can be opened for the public carriage of passengers without any danger to the public using it.
(2) If the Commissioner is of the opinion that the metro railway cannot be opened without any danger to the public using it, he shall, in his report, state the grounds therefor, as also the requirements which, in his opinion, are to be complied with before sanction is given by the Central Government.
(3) The Central Government, after considering the report of the Commissioner, may sanction the opening of the metro railway under section 14 as such or subject to such conditions as may be considered necessary by it for the safety of the public.
The other relevant provisions in the said Act are as follows:
Sec 18. Power to close metro railway opened for public carriage of passengers.-Where, after the inspection of the metro railway opened and used for the public carriage of passengers or any rolling stock used thereon, the Commissioner is of the opinion that the use of the metro railway or of any rolling stock will be attended with danger to the public using it, the Commissioner shall send a report to the Central Government who may thereupon direct that-
(i) the metro railway be closed for the public carriage of passengers; or
(ii) the use of the rolling stock be discontinued; or
(iii) the metro railway or the rolling stock may be used for the public carriage of passengers subject to such conditions as it may consider necessary for the safety of the public.
Sec. 19. Re-opening of closed metro railway.-When the Central Government has, under section 18 directed the closure of the metro railway or the discontinuance of the use of any rolling stock-
(a) the metro railway shall not be re-opened for the public carriage of passengers until it has been inspected by the Commissioner and its re-opening is sanctioned in accordance with the provisions of this Chapter; and
(b) ….
Rules contained in the Opening of Metro Railways for Public Carriage of Passenger Rules, 2013 are also relevant to refer in this context.
The purpose of CMRS is to “inspect the metro railway with a view to determine whether it is fit to be opened for the public carriage of passengers”. As per section 8 of the Metro Railways (O&M) Act, 2002, CMRS is duty-bound to act in consonance with the requirements of the Central Government under the law, and not get into the issue whether the metro-railway could be operated as per the requirements of an agreement between any two parties.
Under the Act, it is reasonable for the CMRS to permit commencement of operation of a metro-railway so long as it does not conflict with the requirements of public safety, as assessed at the time of granting sanction. The assessment itself, on which basis the sanction is granted, is in the nature of a snapshot at a given time, as the sanction also generally indicates that it would expire if the metro-railway does not commence operations within a specified period after the date thereof.
Section 15 of the Act specifies that the CMRS gives his opinion as whether the “metro railway can be opened for the public carriage of passengers without any danger to the public using it”.
Thus, the inference that, as the CMRS has granted sanction for re-opening of the metro-railway, all or any defects in the same have been fully cured, was not borne out of a correct appreciation of the legal position.
The key word to be noted is “opened” and not “operated”. Notably, the word “operate” or any grammatical variation thereof is particularly missing in the sections (of the Act) relating to the powers/duties of CMRS, because the sanction only enables opening of the metro-railway, which could then continue operations till either the metro-rail administration itself finds it unsafe to operate or till the CMRS takes cognisance (on his own or on account of any such information reaching the CMRS) of any safety risk which has arisen for the metro-railway.
It is perfectly possible for a metro-railway to be permitted to operate (after being opened), being a public utility, even if the operations are degraded, as total stoppage of services may imply great inconvenience to the public intending to use it.
Section 15(2, 3) and 18(iii) of the Act indicate a situation whereby even commencement/ continuation of operations could be permitted despite attendant risks, which could however be taken care of by following certain precautions (which could adversely impact the contractual rights of at least one of the parties involved in the case of a concession agreement). Merely because there is a permission to commence/continue operations, it cannot be said that there are no defects existing in the metro-railway.
The nature of CMRS inspection and arriving at the decision to grant sanction to open the metro-railway does not involve a 100% check or verification of various components of the metro-railway. In practice, the CMRS takes the certificates/ undertakings, submitted to him by the concerned officials of the metro-railway, on face value and along with his team of officials makes a sample check of things which have a bearing on safety, although nothing prevents him from going deeper.
As per Rule 13/Rule 14, the sampling rate is also defined under the Rules i.e. he shall examine at least one bridge or viaduct of each different pattern or type and satisfy himself about the adequacy with reference to the safety of bridge/viaduct design. In CMRS sanction, there is invariably mention of ‘substantially complied’ while according sanction and therefore CMRS sanction is never a certification for ‘100% completion of works.’
In practice, design documents are not submitted to the CMRS (the Rules do not specifically mandate so) and the design of structural elements of the metro-railway is also not gone into by the CMRS (although nothing prevents him from doing so) to come to the decision that the metro-railway administration could be granted sanction to commence operations.
The CMRS goes by the reports and inspection records of the independent engineer submitted by the metro-railway officials, in case any defects have been repaired, and a sample check of things he considers relevant, to develop his assessment on the re-opening of the metro-railway. The CMRS is not prevented from going deeper into issues that attract his attention, though he is not required by law to do so, as his role is to grant sanction for opening of the metro-railway.
Being a statutory authority, the CMRS is not bound by what he is told. Even if it is canvassed that all defects have been cured, the CMRS is required by law to come to his independent assessment as to whether the re-opening of the metro-railway could be permitted without any risk to passenger safety.
Rule 3 (1) of the Opening of Metro Railways for Public Carriage of Passenger Rules, 2013 states that:
Opening of the metro-railway: The metro railway administration shall ensure that the metro railway or a portion thereof to be opened for public carriage of passengers is as per the approved metro railway standards and that all administrative formalities are complete.
Rule 6 of the Opening of Metro Railways for Public Carriage of Passenger Rules, 2013 states as follows:
Deviations from approved standards to be notified - (1) The Chief executive Officer shall ensure that the metro railway or a portion thereof proposed to be opened is operationally fit in every respect before inspection of Commissioner.
The Chief Executive Officer shall, while making reference under sub-rule (2) of rule 3, bring to the notice of the Commissioner any deviation in design, material and construction of the civil works, electrical, signalling and train control, and telecommunication installations, rolling stock or appliances of the metro railway, instances in which moving and fixed dimensions have not been observed, or the bridges, viaduct, tunnels that are not capable of carrying the specified or standard loading without exceeding the stresses specified in relevant Indian Codes/International Codes.
In the case of Airport Metro Express Line Project, the very fact that serious defects had been noticed in DMRC Works within about a year of commencement of operations is itself evidence of the fact that CMRS sanction is not sufficient to conclude that everything is all right with the metro-railway. When the CMRS granted the original sanction on 10.01.2011, as per his assessment the metro-railway was found fit to commence operations. That’s all. What would happen in the next few months was not the issue to be dwelt upon by CMRS. The CMRS sanction is not in the nature of a warranty.
If CMRS sanction could be treated as a certification of the quality of construction of the elements of the metro-railway, one could hope (rather be confident) that at least no serious defects would crop up in a very short time, as the design life of the civil works is several decades (about 100 years). Subsequent events in the case of Airport Metro Express Line have clearly proved that the role of CMRS is definitely not this.
DMRC’s claim that CMRS sanction dated 18.01.2023 should be considered as conclusive proof of absence of defects in civil structures is a totally misplaced narrative, since CMRS had given sanction for degraded mode i.e. restricting speed to 50 kmph initially, based on the condition of civil structures and had not certified fitness of systems for the scheduled peak speed of 120 kmph. CMRS in his prudence had not considered the assertion of curing of defects satisfactory, for permitting the scheduled peak speed. In fact, CMRS had till 12.01.2024 not considered the viaduct section fit for 120 kmph speed. Hence considering 18.01.2013 certification of CMRS as proof of cure of defects in DMRC’s Civil Works is a misinterpretation of CMRS sanction.
Hence, the Supreme Court, in its Curative jurisdiction had ventured into an arena which is not of the court. The practice in this area has been evolving over the decades as the parent institution, namely the Commissioner of Railway Safety for the Indian Railways, is known to have been called upon once in a while to deal with exigencies like natural calamities or manmade disasters (accidents) whereby the CRS is expected to permit even degraded operations, conscious of the conflicting requirements of public need and the requirement of safety of operations, when for example tracks happen to get damaged or bridges and civil structures develop major defects, which would take a long time to rectify, yet the services are required to be necessarily resumed. In such circumstance, the CRS would issue specific restrictions which are mandated to be observed while operating the line. Naturally, such restrictions would convey that all is not well. Yet, that there was no choice but to carry on with the services, even if in a degraded manner.
At a time when India wants to build its infra, the controversy has raised fears about the reliability of PPP models in big public transport projects.
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