2018 Supreme(Del) 1531

IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
INDIAN RAILWAY CATERING AND TOURISM CORPORATION LIMITED (IRCTC) - Petitioner
Versus
MAYURI BEN M. CHOTAI - Respondent
O.M.P. 305 of 2015
Decided On : 05-07-2018

The respondent, as a legal heir of the licensee, upon being substituted for her deceased husband for the unexpired period of the license, would take the license for the unexpired initial period of five years and also be entitled to be considered for the renewal of the license upon the expiry of the initial period of five years of the license.

Headnote:

Arbitration and Conciliation Act - Licenses for Catering Services on Trains - 34 of the Arbitration and Conciliation Act, 1996 - 14.6 Tenure: 14.6.1 The tenure of license for major units will be five (5) years. There should not be an automatic renewal. However, railways reserve the right for renewal of licence only once for a second term of five (5) years, in the case of satisfactory performance. 14.6.2 The monitoring of performance of the licensees should be strengthened. Finance and outside consultants should be involved. Opinion of passengers should be taken by distributing standard forms and results should be computerised. Complaints, should be analysed for their genuineness and corrective action should also be taken. Grievance, cells should be strengthened on Zonal Railways. Licensees should have accountability and loyalty to railways. The monitoring of performance will also include performance as reported through an Annual Confidential Reports (enclosed as Annexure I &II) during the term of licence as circulated vide Commercial Circular no. 55 of 2000. Prompt payment of all railway dues, complaints of serious nature against licensee regarding quality of food and services, reasonable increase in sales turnover during the period of licence, public opinion, conducted from time to time and inspection reports of senior railway officers. Railway should maintain a performance report of major Licenses. The licence should be renewed by the committee equivalent to the committee, which originally awarded the licence with the acceptance of the accepting authority. 14.6.3 The railways will give no, extension after expiry of the licence (second term in case of renewal) and fresh tenders be called well in time. 14.6.4 The enhancement of licence fee at the time of renewal should be based on actual sales turnover, subject to a minimum of 10% increase of the prevailing licence fee at the time of renewal.

Fact of the Case:

The petitioner challenged the Arbitral Award dated 30.01.2015 passed by the Sole Arbitrator adjudicating the disputes that have arisen between the parties in relation to the licenses for Catering Services on trains granted by the petitioner to the respondent. The licenses were awarded for the initial period of 5 years at Concession Fee (C.F.) of Rs. 3.70 crores, taking all the offers together. These licenses were to be renewed for a further period of 5 years subject to the ‘satisfactory services’ being provided by the respondent.

Finding of the Court:

The Arbitrator rejected the stand of the petitioner relying upon the terms of the Bid Document, License Agreement and the Catering Policy. The Arbitrator held that the respondent, as a legal heir of the licensee, upon being substituted for her deceased husband for the unexpired period of the license, would take the license for the unexpired initial period of five years and also be entitled to be considered for the renewal of the license upon the expiry of the initial period of five years of the license. The interpretation to the Catering Policy put forward by the Railway Board was patently incorrect and has been rightly rejected by the Arbitrator in his Impugned Award.

Issues: The main dispute between the parties is whether the respondent has a right to be considered for the renewal of license in her favour.

Ratio Decidendi: The respondent, as a legal heir of the licensee, upon being substituted for her deceased husband for the unexpired period of the license, would take the license for the unexpired initial period of five years and also be entitled to be considered for the renewal of the license upon the expiry of the initial period of five years of the license.

Final Decision: The petition was dismissed with no order as to cost.