Delhi High Court: Arising from a petition under Section 34, Arbitration and Conciliation Act, 1996, assailing an arbitral award passed in disputes concerning licence fee revision under onboard catering contracts, the Single Judge Bench of Mini Pushkarna, J., found a prima facie case in favour of Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) and held that the balance of convenience and irreparable injury warranted protection, and accordingly stayed the operation of the findings of the arbitral award insofar as they pertained to IRCTC’s policy for licence fee revision consequent to tariff revision.
Background
The respondent, a licensee, was awarded onboard catering contracts pursuant to a standard bid document. Letters of award and corresponding Master Licence Agreements were executed for specified trains. Subsequently, in terms of the Catering Policy dated 27 February, 2017, the authority to manage catering services and reassess licence fees was vested in the IRCTC, following which tripartite agreements were entered into among the concerned parties.
Thereafter, on 14 November 2019, the Railway Administration issued a commercial circular, revising catering tariffs. The implementation of the revised tariffs was, however, deferred owing to the COVID-19 Pandemic and the consequent suspension of catering services. Upon resumption of services in 2022, IRCTC undertook a reassessment of sales and, in 2023, raised demand notices seeking enhanced licence fees based on the revised tariffs.
The respondent challenged the said demand notices, contending that they were arbitrary, unilateral, and unsupported by the contractual framework. The dispute was referred to arbitration. By the impugned award, the arbitrator held the demand notices to be invalid and unenforceable, inter alia observing that the revision of licence fees operated retrospectively and was unsustainable.
Aggrieved by the impugned award, IRCTC instituted a petition under Section 34, Arbitration and Conciliation Act, 1996, seeking its setting aside.
Parties’ Submissions
On behalf of IRCTC, it was contended that Clause 8.3 of the Master Licence Agreement expressly permitted revision of licence fees upon revision of catering tariffs, including reassessment of sales from the date of such revision. It was submitted that although the tariff revision was effected in 2019, its implementation was delayed due to the pandemic, and upon resumption of services in 2022, IRCTC validly reassessed sales and raised corresponding demands.
It was further argued that the arbitrator erred in holding that the revision amounted to a retrospective imposition, despite acknowledging IRCTC’s authority to reassess sales. The findings invalidating the demand notices and characterising the reassessment process as arbitrary and violative of principles of natural justice were also assailed as contradictory and unsustainable. It was additionally contended that the impugned award adversely impacted IRCTC’s policy framework.
Per contra, the respondent-licensee submitted that the reassessment process lacked transparency and was not based on a reasonable or disclosed methodology. It was contended that the absence of stakeholder consultation rendered the process arbitrary, and therefore, the conclusions reached by the learned arbitrator were justified and did not warrant interference.
Analysis and Decision
The Court noted that a prima facie case had been established in favour of the petitioner, IRCTC. The Court further observed that denial of interim relief would result in irreparable harm to the petitioner, and that the balance of convenience also lay in its favour.
In view thereof, the Court granted interim protection and directed that, pending further consideration, the findings in the impugned award insofar as they pertained to IRCTC’s policy regarding revision of licence fees pursuant to tariff revision shall remain stayed until the next date of hearing.
[IRCTC v. Standard Platter Catering and Hospitality (P) Ltd., OMP (COMM) No. 206 of 2026, decided on 27-4-2026]
Advocates who appeared in this case:
For the Petitioner: Saurav Agarwal, Manisha Singh, Kiran Devrani, Anshuman Chowdhury, Parmeet Singh, Samayra Adlakha, Anadi Mishra, Kanav Khatana, Jyoti Singh, Advocates.
For the Respondent: Jitender Mehta, Lalit Kumar, Advocates
Buy Arbitration and Conciliation Act, 1996 HERE
