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2026 Supreme(Online)(Del) 2620
IN THE HIGH COURT OF DELHI AT NEW DELHI
Sachin Datta, J
S L Enterprises – Appellant
Versus
Union Of India – Respondent
W.P.(C) 13267/2019
For the Appellants/Petitioners: Manjit Kumar Pathak
For the Respondents: Om Prakash, Nitish Pande, Sarthak Udaipuria, Sanhita Pandey, Amish, Manuj Gautam
Where a specific arbitration clause exists in a policy for dispute resolution between parties, judicial intervention in contractual disputes is precluded, requiring the party to exhaust the internal arbitration remedy.
Headnote:The petitioner challenged an order of termination of leasing contracts, forfeiture of security deposits, and a five-year debarment issued by the railway authorities. The court noted the existence of a specific dispute resolution mechanism under the Comprehensive Parcel Leasing Policy. The primary issue was whether the dispute regarding contract termination and forfeiture should be decided by the court or through the prescribed arbitration mechanism. The court held that since a clear arbitration clause exists for disputes concerning the implementation of the policy and agreement, the party must be relegated to that remedy. The petition is disposed of by relegated the petitioner to invoke arbitration for the grievances related to the contract termination and forfeiture, while the court retains consideration regarding the ongoing debarment.
| Table of Content |
|---|
| 1. petitioner challenges administrative order of contract termination and debarment. (Para 1 , 2 , 3) |
| 2. existence of a mandatory arbitration clause necessitates redirection for contractual disputes. (Para 4 , 5 , 6) |
| 3. ongoing debarment action remains subject to judicial scrutiny while arbitration proceeds. (Para 7 , 8 , 9) |
O R D E R
1. The present petition impugns a letter dated 07.10.2019 issued by the Assistant Commercial Manager/FR, New Delhi. By way of the said letter, the following actions have been taken against the petitioner :-
i. Cancellation of registration No. 00DLIB00087 and forfeiture of registration fee.
ii. Termination of running leasing contracts with immediate effect and forfeiture of their security deposit under registration no.00DLIB00087 mentioned as under: -
| S. No. | Train No. | Comptt. | From- TO | Contractual period |
|---|---|---|---|---|
| 1. | 12274 | F-1 | NDLS - HWH | 10/07/2019 – 09/07/2014 |
| 2. | 12502 | F-1 | NDLS - GHY | 10/07/2019 – 09/07/2024 |
(iii) Debarring you from fresh registration for a period of five (05) years over all zonal railway/division.”
2. A perusal of the letter reveals that the same is purportedly based on repeated defaults on the part of the petitioner in completing the necessary formalities pursuant to the petitioner emerging as a successful bidder in respect of certain tenders.
3. During the course of hearing, it transpires that vide order dated 17.12.2019 passed by this court, the operation of the impugned communication dated 07.10.2019 has been stayed.
4. During the course of hearing, it is emphasized by the respondent that in terms of Clause 37.0 of the Comprehensive Parcel Leasing Policy (CPLP) issued by the Railway Board vide FM Circular No.06 of 2014 dated 15.04.2014, there exists a dispute resolution clause which is applicable to the disputes sought to be raised by the petitioner regarding termination and forfeiture of security deposit. The said dispute resolution clause reads as under:
“37.0 Dispute Resolution
37.1 Notwithstanding any provisions in this policy, stipulations of Railway Act, 1989 will prevail. In case of any dispute in interpretation of policy, the decision of Railway Administration shall be final and binding.
37.2All disputes in regard to implementation of the policy/agreement with the Zonal Railway, under this Scheme, will be referred to an Arbitrator nominated by General Manager of the Zonal Railway”
5. In light of the aforesaid, after some hearing, learned counsel for the petitioner accedes that the controversy/dispute as regards termination of the contracts of the petitioner and forfeiture of the security deposit shall be agitated by way of invoking arbitration in terms of the aforesaid arbitration clause.
6. In the circumstances, insofar as the relief concerning termination of the contracts and forfeiture of the security deposit is concerned, the petitioner is relegated to avail the remedy of arbitration in accordance with the aforesaid stipulation.
7. As regards the debarment of the petitioner vide the impugned letter dated 07.10.2019, it is noticed that, by virtue of the interim order dated 17.12.2019, the said debarment action has remained stayed.
8. In the above backdrop, learned counsel for the respondents has been queried as to whether any purpose would be served by giving effect to the debarment at this stage, on the basis of a cause of action that arose as far back as 2019. Learned counsel for the respondents seeks time to take instructions in this regard.
9. List on 18.05.2026.
