IMPORTANT POINT
Appeal against arbitral award – Once IRCTC had no independence of its own or discretion to condition or alter contracts/MLAs, question of applying principles of fair play in action and lack of arbitrariness, traceable to Article 14 of Constitution, would not even arise.

JUDGMENT :

SANJAY KUMAR, J.

1. Leave granted.

2. The scope and ambit of interference with an arbitral award under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996¹[For short, ‘The Act of 1996’.], arise for consideration once again.

3. These seventeen sets of appeals arise out of the common judgment dated 10.02.2025 passed by a Division Bench of the Delhi High Court in a batch of eighteen appeals filed under Section 37 of the Act of 1996. Indian Railways Catering and Tourism Corporation Limited²[For short, ‘IRCTC’] is the appellant in twelve sets of appeals while M/s. Brandavan Food Products³[For short, ‘BFP’], a partnership firm, filed two sets of appeals. The remaining two sets of appeals were filed by R.K. Associates and Hoteliers Pvt. Ltd. and Satyam Caterers Pvt. Ltd respectively.

4. IRCTC had filed thirteen of the eighteen appeals before the High Court while BFP had filed the remaining five appeals. All those appeals, in turn, arose out of the order dated 13.08.2024 passed by a learned Judge of the Delhi High Court in a batch of petitions filed under Section 34 of the Act of 1996 assailing the Award dated 27.04.2022 passed by a sole Arbitrator in relation to thirteen claim petitions. The claim petitions were filed by three caterers, viz., BFP, R.K. Associates and Hoteliers Pvt. Ltd. and Satyam Caterers Pvt. Ltd. Out of the thirteen claim petitions, nine were filed by BFP in relation to its contracts for the Rajdhani, Shatabdi and Duronto Express Trains, while two claim petitions each were filed by R.K. Associates and Hoteliers Pvt. Ltd. and Satyam Caterers Pvt. Ltd respectively, in relation to their contracts for Shatabdi Express Trains. As all the claimants shared a common grievance, BFP’s petition relating to its contract for the New Delhi-Dibrugarh-New Delhi Rajdhani Express was treated as the lead case. We, accordingly, deal with the factual aspects in the context of that case.

5. In terms of the Catering Policy of 2010 issued by the Railway Board, Ministry of Railways, Government of India, the Northern Railway published Tender Notice dated 27.05.2013 inviting bids for providing catering services on the train referred to above. The contract period was for 5+5 years from the date of commencement of the catering services. The tender document prescribed the food items/beverages which were to be supplied to the passengers travelling on these trains. The tariff/apportionment charges⁴[For short, ‘tariff(s)’] for each service were also prescribed. We may note, at this stage, that the tariffs are fixed on the basis of the commercial circulars issued by the Railway Board. At the time of issuance of the tender notice, the tariffs set out therein were reflective of the tariffs fixed in the year 1999, under Commercial Circular dated 27.05.1999.

6. While so, before the opening of the bids pursuant to Tender Notice dated 27.05.2013, the Railway Board issued Commercial Circular No. 63 of 2013 dated 09.10.2013 whereby, while increasing the tariffs, the concept of ‘combo meal’ was introduced as a measure to reduce wastage of food. It was proposed that, instead of providing a second regular/full meal during the course of the journey, a combo meal could be served, i.e., a smaller meal consisting of lesser number of items and quantities. The price of this combo meal for 1AC/2AC/3AC was fixed at Rs.66.50/- (Rs.75/- with service tax) as against a regular meal, which was enhanced to Rs.129.50/- (Rs.145/- with service tax) for 1AC/EC, and Rs.112.50/- (Rs.125/- with service tax) for 2AC/3AC/CC. However, upon receiving feedback of the dissatisfaction of passengers with combo meals, the Railway Board issued Commercial Circular No. 67 of 2013 dated 23.10.2013, discontinuing combo meals, by deleting Para 1.4 of the earlier Commercial Circular dated 09.10.2013, and substituting it with a regular meal, but at the price fixed for a combo meal. Therefore, at the time of opening of the tender bids and the awarding of contracts thereafter, Com