The scope of appeal under the Arbitration and Conciliation Act is limited, disallowing re-evaluation of evidence unless there is manifest illegality or denial of natural justice.

JUDGMENT :

SHALINDER KAUR, J

FAO (COMM) 48/2025 &CM APPL. 9244/2025

1. The present Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, "the A&C Act") read with Section 13 of the COMMERCIAL COURTS ACT , 2015 (for short, "the CCA") has been preferred against the Order dated 28.09.2024 passed by the learned District Judge (Commercial-03), Patiala House Courts, New Delhi (Trial Court) in O.M.P. (COMM) No.212/2019 titled ‘ Union of India v. Inland World Logistics Pvt. Ltd. ’, whereby the learned Trial Court has dismissed the petition filed by the Appellant herein under Section 34 of the A&C Act challenging the Arbitral Award dated 14.08.2018.

BRIEF FACTS

2. The Respondent before us is a lease holder with the Northern Railways (represented by the Union of India, being the Appellant herein), under the Lease Agreement dated 05.08.2008 (hereinafter referred to as the “Lease”) as per the Comprehensive Leasing Policy formulated by the appellant. This Lease pertained to one Parcel Van that travelled between Delhi and Howrah on a round-trip basis being Train No.13039/40. The amount agreed for each of these round-trips by the parties was Rs.87,799/-. The carrying capacity of the Parcel Van was originally 25 tons, however, vide the FM circular No.14 of 2008 dated 24.10.2008, the same was reduced to 23 tons. Accordingly, the rate per round-trip was reduced to Rs.80,775/- with effect from 01.04.2009.

3. The Lease between the parties was valid for a period of three years, commencing from 01.12.2007 and ending on 30.11.2010.

4. As per Clause 20.1 of the Lease Agreement, the Respondent was entitled to an extension of the lease for a period of two years beyond the initial period of three years. The Respondent chose to exercise this option, and the Competent Authority of the Appellant approved such extension, subject to the Respondent furnishing an affidavit stating that if any incident of overloading in the subject Parcel Van was detected, the Respondent would be blacklisted, and the said Lease would be cancelled. Pursuant to the said condition, the Respondent furnished an affidavit dated 02.12.2010, stating that if any instance of overloading is detected in the subject Parcel Van, he would be blacklisted for a period of five years and the Lease would stand cancelled. On the basis of the said affidavit submitted by the Respondent, vide the letter dated 15.12.2010, the lease was extended for a period of two years, and the agreed round-trip rate was raised to Rs.1,09,365/- + 2% TDC.

5. Thereafter, the Appellant received a report from the Vigilance Department, Northern Railway, on 21.01.2011, wherein it was stated that an excess weight of 10120 Kilograms was found in the subject Parcel Van on 17.01.2011. In view of the excess weight, a penalty of Rs.2,41,202/- was collected from the Respondent vide MR No.300079 dated 19.01.2011. Further, in terms of the instructions issued by the Headquarters of the Appellant vide the letter dated 11.10.2011, the subject Lease of the Respondent was terminated vide the letter dated 27.10.2011, and the registration of the Respondent was also cancelled.

6. The Respondent herein filed an O.M.P. No. 967 of 2011 titled Inland Road Transport Pvt Ltd v. Union of India & Anr. before this Court, challenging the aforementioned termination Order dated 27.10.2011. This Court, vide its Order dated 18.01.2012, disposed of the petition by directing the Appellant to conduct a proper inquiry with regard to the incident dated 17.01.2011 and ordered a re- weig