The court upheld the arbitrator's decision on breach of contract, illegality of termination, and grant of damages, while denying the claim for interest.

JUDGMENT

Neena Bansal Krishna, J.

1. The present Petition has been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `A&C Act') for setting aside the Award dated 08.03.2019 passed by the Sole Arbitrator vide which the claim of the respondent for damages has been allowed.

2. The facts in brief are that the petitioner, a Public Sector Undertaking working under the aegis of the Ministry of Railways, (which was the respondent before the Arbitrator) issued a Tender Notice dated 11.09.2006for allocating license to operate Food Plazas at the CST (Main and Sub-urban) Station in Mumbai. The Respondent herein (who was the claimant before the ld. Arbitrator) being the highest bidder, was awarded the license for the Food Plazas for a license fee of Rs.31,31,313/- and Rs.44,00,000/-,which was operational for a period of 9 years as provided in the General Conditions of License, vide letter of Award dated 23.11.2006 and 24.11.2006 respectively. Following the same, the parties entered into an Agreement dated 20.03.2008 which came into effect on the commencement of operation in the respective units on 01.10.2008 and 28.02.2009.

3. The respondent vide its letter dated 27.10.2012 sought permission of the petitioner to sub-license 75% the designated premises i.e. the Food Plaza, to M/s Kishore H Caterers which was duly countenanced by the petitioner vide letter dated 07.11.2012.

4. The respondent vide letters dated 30.12.2012 followed by letter dated 30.01.2013informed the petitioner that M/s B. Rajasaheb, an unauthorized third party, had forcibly taken possession of the remaining 25% of the Food Plaza at CST (Sub-Main) and sought the aid of the petitioner to obviate such unauthorized occupation. Pursuant thereto, the petitioner promptly took action by filing a complaint to the Railway Police Force (RPF) vide letter dated 30.12.2012 and to GRP vide letter dated 01.04.2013.

5. However, M/s B. Rajasaheb filed a Civil Suit No. 4 of 2013 on 05.01.2013 in the Small Causes Court of Bombay against the petitioner and the respondent herein, claiming that vide an MoU dated 04.01.2012 signed by two partners of the respondent Firm, it had been granted a sub- lease for a period of 7 years to operate and manage the remaining 25% of the premises for which it deposited a sum of Rs. 43,00,000/-in the respondent's current account in ICICI Bank. It sought a declaration that the MoU dated 04.01.2012 was legal, valid, and binding and that it may be declared as the licensee in respect of disputed premises.

6. The petitioner on becoming au courant about the subletting of the premises by the respondent without its permission vide Agreement dated 04.01.2012 through the suit filed before the Small Causes Court, issued a Show Cause Notice dated 23.04.2013 with respect to the alleged breach of Clauses 6.3 and 12.5 of the General Conditions of License and to take necessary action as per the Conditions of Tender, within 15 days. Respondent gave its Reply dated 03.05.2013 stating that the Agreement dated 04.01.2012 is a forged document and the entry and use of the premises by B. Rajasaheb in December, 2012 was forced against which action was taken by filing a complaint with the Government Railway Police (hereinafter referred to as `GRP') and also sought the help of the petitioner was sought to take action against the illegal occupant.

7. The petitioner then sent a letter dated 02.05.2014 requiring the respondent to file an affidavit declaring that the Firm or its partners did not enter into the Sub-License Agreement without the approval of the petitioner and submit details in regard to the action taken by the respondent against the illegal occupant.

8. Based on the personal hearing granted to the respondent on 16.07.2014 as well as the information on record, the Contract dated 20.03.2008 was terminated vide Termination Order dated 04.08.2014 under Clause 8.1 of the General Conditions of License, by the pet