The court confirmed that the interpretation of contractual obligations in arbitration is exclusive to the arbitrator, and deductions for services not stipulated in the contract, as well as GST reimbursement upon proof of payment, were upheld.

JUDGMENT

TABLE OF CONTENTS

Rajiv Shakdher, J.

Preface:

1. This is an appeal, which is directed against the judgement of the learned single judge dated 05.07.2021. The learned single judge, via the impugned judgement dated 05.07.2021 has dismissed the petition filed by the appellant i.e., Indian Railway Catering and Tourism Corporation (hereafter referred to as "IRCTC") preferred under section 34 of the Arbitration and Conciliation Act, 1996 (hereafter referred to as the "1996 Act").

1.1. Resultantly, the learned single judge has sustained the award dated 15.12.2020, rendered by the sole arbitrator.

1.2. A perusal of the award dated 15.12.2020 shows, that it is a partial/interim award, and what remains to be done, is to consider and quantify the claims based on the findings rendered in the said award.

Background:

1.3. At this juncture, it would be relevant to note, that the sole arbitrator was appointed by this Court via order dated 13.08.2019, passed in a petition moved by the respondent i.e., the claimant under section 11 of the 1996 Act.

2. Concededly, the arbitrator was called upon to consider the following four aspects.

2.1. First, whether onboard catering services provided by the respondent under a temporary license issued to it also obliged the respondent to serve a welcome drink to the passengers who boarded the subject trains.

2.2. Second, whether the respondent was entitled to claim Goods and Services Tax (GST) on production charges/supply of meals after 01.07.2017, when the Goods and Services Tax Act, 2017 ["GST Act"] came into force.

2.3. Third, whether the financial burden concerning the food which got wasted due to cancellation or the failure of the passengers to turn up was required to be borne by the respondent.

2.4. Fourth, as to whether the respondent was entitled to the relief as claimed, which included a claim for interest.

3. The record shows, that issues on the same lines were framed by the learned arbitrator on 18.11.2020. It is also an admitted position, and something that emerges from the record that on 27.10.2020, before the learned arbitrator, the respondent gave up on its claim for service tax. Admittedly, insofar as the first two aspects are concerned, the learned arbitrator ruled in favour of the respondent. Insofar as the third aspect is concerned, the learned arbitrator rendered a decision against the respondent. Since a partial/interim award has been rendered, the fourth aspect referred to above has not been dealt with as yet by the learned arbitrator.

4. It is in this background, that arguments were advanced by counsel for the parties. Mr Nikhil Majithia advanced submissions on behalf of IRCTC, while Mr Naresh Thanai advanced arguments on behalf of the respondent.

Submissions of the appellant:

5. Mr Majithia's submissions can be, broadly, paraphrased as follows--

6. On the first aspect, Mr Majithia relied upon clause 2.1 of the tender and Commercial Circular 32/2014 (hereafter referred to as "CC 32/2014") dated 06.08.2014. Based on the aforesaid documents, the argument made was that the respondent was obliged to provide a welcome drink to the passengers, who boarded the subject trains.

6.1. It was contended, that since the respondent failed to serve a welcome drink to the passengers for nearly two months, IRCTC was compelled to take the burden upon itself to provide the same.

6.2. In support of this plea, reference was also made to the policy decision, taken by IRCTC which is contained in its communication dated 07.02.2017 addressed to its Group General Managers posted in various zones. In this regard, reference was made to a specific communication dated 10.02.2017 addressed to the respondent whereby the policy decision taken by IRCTC on 07.02.2017 was brought to its notice. Attention was drawn by Mr Majithia to the letters dated 22.02.2017, 28.02