Indian Railways Catering And Tourism … vs M/S Brandavan Food Products on 10 February, 2025

February 11, 2025

Delhi High Court

Indian Railways Catering And Tourism … vs M/S Brandavan Food Products on 10 February, 2025

1. This set of cross appeals has been filed under Section 37 of the
Arbitration and Conciliation Act, 1996 (in short, „A&C Act‟),
challenging the Order dated 13.08.2024 (hereinafter referred to as
„Impugned Order‟) passed by the learned Single Judge of this Court in
OMP (COMM.)411/2022, OMP (COMM.)47/2023, OMP (COMM.)
517/2022, OMP (COMM.) 500/2022, OMP (COMM.) 46/2023, OMP
(COMM.) 495/2022, OMP (COMM.) 504/2022, OMP (COMM.)
447/2022, OMP (COMM.) 506/2022, OMP (COMM.) 505/2022,
OMP (COMM.) 502/2022, OMP (COMM.) 45/2023, OMP
(COMM.)446/2022, allowing, in part, the said petitions filed by the
Indian Railways Catering and Tourism Corporation Ltd. (hereinafter
referred to as, „IRCTC‟) under Section 34 of the A&C Act, by
partially setting aside the Arbitral Award dated 27.04.2022 passed by
the learned Sole Arbitrator (hereinafter referred to as the „Impugned
Award‟).

2. Both the parties to the petitions, that is, IRCTC and M/s
Brandavan Food Products Ltd., being aggrieved of the parts of the

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impugned order, have challenged the same in form of this batch of
cross-appeals.

3. In these are cross-appeals, IRCTC shall be referred to as the
„respondent‟, while M/s Brandavan Food Products Ltd. shall be
referred to as the „claimant‟.

4. There were a total of 13 claims filed by the claimant before the
learned Sole Arbitrator, with respect to 13 different trains (Rajdhani,
Shatabdi and Duranto trains). As similar background facts are
involved in the cross-appeals, for the sake of convenience and brevity,
the facts from FAO(OS)(COMM) 246/2024 are being referred to.

Brief Background of Facts:

5. The claimant had filed the Statement of Claim before the
learned Sole Arbitrator, contending therein that the respondent is a
public listed Central Public Sector Enterprise (CPSE) working under
the aegis of the Ministry of Railways, Government of India, whereas
the claimant is a private contractor providing catering services on the
trains run by the Indian Railways.

6. In terms of the Catering Policy of 2010 issued by the Railway
Board (hereinafter referred to as „2010 Policy‟), the tenders for
providing catering services on trains were called for on the basis of
bids for License Fee payable by the Contractor to the respondent,
while the Catering/Apportionment charges were to be reimbursed to
the Contractor for providing such catering services as calculated on
the basis of Catering Tariff fixed by the Railway Board. The

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Catering/Apportionment charges are fixed by way of Commercial
Circulars issued by the Ministry of Railways, through the Railway
Board, and are applicable to all existing licenses/contracts as well as
those which are to be issued in the future.

7. In pursuance of the said policies and practices, the Northern
Railways published a tender, inviting bids on 27.05.2013 for the
provision of Catering Services in, inter alia, the New Delhi-Dibrugarh
Rajdhani Express, Train No. 12423-24 for a period of 5+5 years
(hereinafter referred to as, „Subject Tender‟).

8. At the relevant time, the Catering/Apportionment Charges for
the said tender had been calculated on the basis of the Catering Tariff
fixed in the year 1999 vide Letter dated 27.05.1999 (hereinafter
referred to as, „1999 Policy‟) and was a part of the tender document
itself.

9. The claimant, on 27.06.2013, submitted its Bid qua the Subject
Tender and quoted Rs. 35,63,00,000/- as the License Fee for a period
of 5 years.

10. Prior to opening the bids for the Subject Tender, the Ministry of
Railways, through the Railway Board, issued a Commercial Circular
No. 63/2013 dated 09.10.2013 (hereinafter referred to as, „Circular
dated 09.10.2013‟), whereby a new concept of „Combo Meal‟ was
introduced by the Railway Board as a measure to reduce food wastage
for the meal being served for dinner. It provided that instead of a
second Regular Meal/full meal being served in the course of the
journey, only a Combo Meal, which was a smaller meal consisting of

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lesser items and quantity of food, shall be served. It was priced at Rs.
66.50/- for 1AC/2AC/3AC, as against the Regular Meal, which was
priced at Rs. 129.50/- for 1AC and Rs. 112.50/- for 2AC/3AC.

11. However, after a feedback from the Zonal Railway offices, the
Railway Board, vide Commercial Circular No. 67/2013 dated
23.10.2013 (hereinafter referred to as, „Circular dated 23.10.2013‟),
discontinued the Combo Meal service by deleting paragraph 1.4 of the
Circular dated 09.10.2013, by which the concept of Combo Meal was
introduced, and once again decided that a Regular Meal be served as
the Second Meal of the day.

12. The claimant asserts that, therefore, the Subject Tender was
governed by the Circular dated 09.10.2013 read with the Circular
dated 23.10.2013, and, in the course of a journey requiring two meals
to be served, the claimant was obliged to serve two Regular Meals
instead of one Regular Meal and one Combo Meal. This is not
disputed by the respondent.

13. The Northern Railways issued a Letter of Award dated
17.01.2014 (hereinafter referred to as, „LOA‟), and the claimant
started providing the catering services on the train with effect from
21.01.2014.

14. The claimant and the Northern Railways thereafter entered into
a Master License Agreement dated 21.04.2014 (hereinafter referred to
as, „MLA‟).

15. By the Commercial Circular No. 32/2014 dated 06.08.2014
(hereinafter referred to as, „Circular dated 06.08.2014‟), it was

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stipulated that henceforth a Welcome Drink will be served to all
passengers of the AC classes on the commencement of the journey.

16. The claimant asserted that the charges for the Welcome Drink
were not notified by the Railways/the respondent herein.

17. The claimant asserted that it made representations to the
Northern Railways, dated 22.06.2015, 03.08.2016, 23.08.2016 and
25.11.2016, calling upon the Railways to pay charges for the
Welcome Drink. The said issue, however, remained pending with the
Railways.

18. A Tripartite Agreement dated 10.08.2017 (hereinafter referred
to as, „Tripartite Agreement‟) was executed between the Northern
Railways, the respondent, and the claimant, whereby, the management
of catering services stood transferred to the respondent.

19. In December 2017, the claimant filed a Writ Petition being,
W.P.(C)11548/2017 titled M/S Brandavan Food Products & Anr. v.
Union of India & Ors., inter alia seeking quashing of the Circular
dated 06.08.2014. The claimant sought the following reliefs in the said
petition:

“A. Issue an appropriate writ, order or
directions quashing the impugned circular
bearing Commercial Circular No. 67 of 2013
dated 23-10-2013 and Commercial Circular
No. 32 of 2014 dated 6-08-2014 issued by the
Respondent; and
B. Issue an appropriate writ, order or
direction commanding the Respondent to
refund an amount of Rs. 7,82,49,945.00
incurred by the Petitioner for providing
regular meal at the price of combo meal from
17.10.2013 to 30.11.2017 along with 18%

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interest from the date when the amount
became due and payable; and / or
C. Issue a writ, rule, order or direction in the
nature of Mandamus directing the Respondent
to refund an amount of Rs. 1,80,57,132.42
along with 18% interest from the date when
the amount became due and payable incurred
by the Petitioner for providing Welcome Drink
from 01.08.2014 to 30.11.2017.”

20. This Court, vide its Judgment dated 23.09.2019, dismissed the
said Writ Petition, however, granted liberty to the claimant to initiate
arbitration proceedings. We may quote from the said judgment, as
under:

“17. It is for the petitioner to take up the
issues before an appropriate forum. Liberty is
granted to the petitioner to take steps for
appointment of an arbitrator to look into the
grievance of the petitioner. In case such
arbitration proceedings are initiated, the
learned arbitrator may adjudicate the disputes
raised by the petitioner uninfluenced by any
observations made by this court.”

21. Subsequently, the claimant invoked arbitration proceedings vide
Letter dated 02.02.2020, inter-alia claiming from the respondent a
sum of Rs.27,82,13,600/- for providing Regular Meals at the price of
Combo Meals from October 2013 to March 2020, and
Rs.5,34,89,753/- for providing Welcome Drinks from August 2014 to
March 2020.

Arbitral Award:

22. The learned Sole Arbitrator, vide the Arbitral Award dated
27.04.2022, allowed the claims of the claimant herein and awarded the

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claimant sums towards the differential costs for the supply of Second
Regular Meals instead of Combo Meals and for the supply of
Welcome Drinks, along with simple interest at the rate of 6% per
annum payable from January 2018 till the date of the Award and
interest at the rate of 9% per annum in case the payment is not made
within a period of 4 months.

23. In summary, the learned Sole Arbitrator held as under:-

(a) Giving the benefit of Section 14 of the Limitation Act,
1963 (in short, „Limitation Act‟) to the claimant for the
time spent in the Writ Petition, the claimant would be
entitled to seek the claim for the period commencing from
January, 2015;

(b) Only on the ground that it raised bills without claiming the
additional amounts for the Second Regular Meal or the
Welcome Drink, and accepted payment of the bills so
raised, the claimant cannot be non-suited on the ground
that it has waived or abandoned its right to seek recovery
of the amount due for the supplies made;

(c) The plea that the claimant unduly benefited due to the
increase in tariff pursuant to the Circular dated 09.10.2013,
cannot be accepted as the said Circular was issued by the
Railways on its own to fix the adequate rate of catering
services;

(d) The respondent enjoys a superior and dominant position in
the contract over the claimant;

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(e) Clause 1.3.1 of the Tender Document does not clothe the
respondent with unilateral powers to issue any directions
whatsoever which would then automatically deem to bind
the claimant. It cannot be used to say that if the respondent
directs the claimant to render a particular service which
leads to additional costs being incurred, then, even without
the express consent of the claimant, the respondent can
assume or assert that the claimant will not be reimbursed
for such additional costs incurred by it on account of the
services rendered by it on the specific instruction of the
respondent

(f) Similarly, while Clause 8 of the MLA authorises the
respondent to make revisions in the catering menu and
tariff, it cannot come to the aid of the respondent to
contend that they would not pay for the services rendered;

(g) In the facts of the case, as the respondent called upon the
claimant to serve a Second Regular Meal for dinner instead
of a Combo Meal, and as rates for both have been specified
in the Circular dated 09.10.2013, the respondent cannot
invoke Clause 8.1 of the MLA to reimburse the claimant at
the rate of the Combo Meal instead of the rate of the
Regular Meal;

(h) Similarly, Clause 8.1 of the MLA cannot be invoked to
deny the payment/reimburse the claimant for the Welcome
Drink;

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(i) Clause 1.4 of the MLA also has no application as the rates
and prices contained in the Circular dated 09.10.2013
remained unchanged;

(j) The claimant is entitled to seek recoveries of monies due
and payable to it on account of having supplied the Second
Regular Meal and the Welcome Drink;

(k) As far as the computation of the amount due is concerned,
the claimant has based its claim on the Occupancy
Certificate, and bills based thereon already submitted by it
with the respondent. It has, therefore, discharged its initial
burden of proving the computation of the amount. The
respondent, however, has not given any contrary figure of
the numbers of Second Regular Meals and Welcome
Drinks supplied, and in the absence of any contrary
evidence, the amount computed by the claimant is
accepted;

(l) Even in the absence of the bills on record, the claimant, by
producing the Chartered Accountant as a witness, has been
able to prove the quantum of its claim in terms of Section
65(g) of the Evidence Act, 1872;

(m) The plea of the respondent that in some trains, like the
morning Shatabdi, where in terms of the Circular dated
06.08.2014, Welcome Drinks were to be supplied with the
rider that whenever the serving of the Welcome Drink was
followed immediately by the serving of breakfast, then the

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Fruity/tetra-pack to be provided along with the breakfast
was not required to be served as it would neutralize the
effect of service of Welcome Drink, also cannot be
accepted as the respondent failed to prove the same and did
not raise any set-off or counter-claim in this regard;

(n) The plea of the respondent that there was a non-joinder of
parties inasmuch as the Indian Railways was not
impleaded, was also rejected;

Impugned Order:

24. The respondent filed the above mentioned petitions under
Section 34 of the A&C Act, challenging the Arbitral Award.

25. The learned Single Judge, vide the Impugned Order, has upheld
the Award of the learned Sole Arbitrator as regards the finding on
limitation, waiver/estoppel vis-à-vis the Welcome Drink, recovery of
monies vis-à-vis the Welcome Drink, computation of claims vis-à-vis
the Welcome Drink, and on the interest awarded. However, the Award
of the learned Sole Arbitrator has been set aside as far as the findings
of the learned Sole Arbitrator on waiver/estoppel vis-à-vis the Second
Regular Meal, and the recovery ordered vis-à-vis the Second Regular
Meal are concerned.

26. A summary of the findings of the learned Single Judge is as
under:-

(a) The finding of the learned Sole Arbitrator on the issue of
limitation was upheld;

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(b) In terms of Clause 8.1 and Clause 1.4 of the MLA, the
respondent had a right to modify/alter the tariff without
consultation with the claimant. Therefore, the claimant had
no right under the contract to claim the difference in rates
specified in the Circular dated 09.10.2013 and the Circular
dated 23.10.2013;

(c) Clause 21.6 of the MLA had no application to the facts of
the case as the claimant had no legitimate right to make the
claim;

(d) The finding of the learned Sole Arbitrator that the bills
were raised by the claimant under duress, coercion and
because the claimant was in a financially precarious
situation, is not supported by any evidence.

(e) The learned Sole Arbitrator has also erred in holding that
because the respondent had a dominant position in the
contract, the claimant could not have easily surrendered the
contract and had no other choice but to raise the bills and
receive payments as per the Commercial Circulars. These
were mere bald assertions of the claimant without any
evidence to support the same;

(f) The claimant cannot claim benefit under the Circular dated
09.10.2013 and in the same breath seek to resile from the
Circular dated 23.10.2013 on the ground of it being
inequitable;

(g) The doctrine of waiver was irrelevant in the present case as

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the claimant had entered into the contract with the
respondent and did not have any right to seek
reimbursement of the price difference for providing the
Second Regular Meal as per the charges stipulated in the
Circular dated 09.10.2013;

(h) The conduct of the claimant falls squarely within the
definition of „estoppel‟ as it raised bills upon the changed
tariff, accepted payments pursuant to those bills without
demur or protest, and issued a letter of protest only after
1.5 years had passed;

(i) By the Circular dated 09.10.2013, there was, in fact, a
change in the tariff from Rs.150/- (pre-bid tariff) to
Rs.178.50/-, and post the Circular dated 23.10.2013,
merely the concept of Combo Meal as the Second Meal
was substituted by a Regular Meal, however, no change
was made to the tariff pertaining to the Second Meal,
which remained at Rs.66.50/-;

(j) The learned Sole Arbitrator had erred in relying upon the
respondent‟s letter dated 05.07.2019 to the Railways and
the Railway‟s change of policy vide Letter dated
03.10.2019, as the claimant could not have claimed
amounts prior to the change of policy;

(k) As far as the Welcome Drink is concerned, it does not fall
within the ambit of Clause 8.1 or Clause 1.4 of the MLA,
as even though the respondent had the power to

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modify/alter the menu/tariff, it could not have asked the
claimant to provide an additional item without intending to
reimburse the claimant for the same;

(l) There was no infirmity in the findings of the learned Sole
Arbitrator regarding the quantification of the claim as far
as the Welcome Drink is concerned;

(m) The finding on the non-impleadment of the Indian
Railways also does not warrant an interference;

(n) As the learned Sole Arbitrator had the discretion to award
interest, therefore, the challenge to the award of interest is
not interfered with.

Submissions of the learned Solictor General appearing for the
Respondent:

27. Mr. Tushar Mehta, the learned Solicitor General, appearing for
the respondent, submits that for the catering services, the IRCTC
charges the pre-fixed tariff from the customers/passengers and passes
it on to the caterers without retaining any amount for itself pursuant to
an invoice raised by the Caterer.

28. As far as the claim of the claimant towards the Welcome Drink
is concerned, the learned Solicitor General submits that the claimant
had supplied the Welcome Drink to the passenger without any demur
or protest or objection of any nature whatsoever. It is only after a gap
of almost 11 months that a vague representation was made by an
association without any material particulars. In the later

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representations of the claimant, no claim was made for reimbursement
towards the past supply of the Welcome Drink. The bills continued to
be raised by the claimant without any claim for the Welcome Drink.

29. He submits that in terms of Clause 1.4 and Clause 8.1 of the
MLA, an unfettered right has been vested in the respondent to
modify/alter the catering tariff and menu including without addition to
the tariff. The Circular dated 06.08.2014 was issued in exercise of this
power. The claimant accepted the same and did not raise any bill
claiming any amount towards the Welcome Drink. Any objection to
the supply of Welcome Drink or for the claim of money for the same
should have been raised by the claimant immediately as it was to be
passed on to the passengers. To get over the same, the claimant raised
a vague plea of coercion, which the learned Sole Arbitrator accepted
without any evidence.

30. He submits that, on merits, since the claimant failed to provide
day-to-day or month-to-month consumption/supply of the Welcome
Drink in the monthly bills, the claimant cannot claim any amount qua
the same. He submits that the claimant has not discharged the burden
of proving the quantity of Welcome Drinks supplied, and even the
sole witness of the claimant, that is, CW-1, a Chartered Accountant,
has admitted in his cross examination that he was not aware of the
number of Welcome Drinks supplied by the claimant. Therefore, the
learned Sole Arbitrator and the learned Single Judge erred in allowing
the claim towards the supply of Welcome Drinks without any
evidence being led by the claimant.

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31. He submits that the claimant accepted the LOA and commenced
services from 21.01.2014 and, in fact, even raised an invoice on
31.01.2014. He submits that the claimant entered into the MLA,
knowing the catering tariff and menu for the different meals. The
MLA contained a detailed chart of pre-determined tariff as per the
Circular dated 23.10.2013, and the said chart is not disputed by the
claimant in its evidence before the learned Sole Arbitrator. He submits
that the learned Sole Arbitrator erred in interpreting the said
apportionment chart and Clause 1.4 of the MLA in a manner that gives
rise to a new contract between the parties.

32. He further submits that the learned Single Judge had rightly
held the finding of the learned Sole Arbitrator qua the Second Regular
Meal to be patently illegal and perverse. He submits that there was no
scope of ambiguity in the applicable rates of the Second Regular Meal
and the claimant is bound by the guidelines/policies/instructions
issued by the respondent. The learned Solicitor General submits that
the finding of the learned Sole Arbitrator that this is not a case of
change of tariff, is also erroneous, because vide the Circular dated
09.10.2013 and the Circular Dated 23.10.2013, the tariff had, in fact,
been changed from Rs.150/- (pre-bid tariff) to Rs. 178.50. Post the
Circular Dated 23.10.2013, merely the concept of the Combo Meal as
the Second Meal was substituted by a Regular Meal. No changes were
made to the tariff pertaining to the Second Meal, which remained at
Rs.66.50-. Hence, the learned Sole Arbitrator‟s view based on equity
was patently illegal, as it contravened the agreed terms between the

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parties. He submits that the plea of coercion has been rejected by the
learned Single Judge in the Impugned Order as far as the Second
Regular Meal is concerned. He submits that there was, therefore, no
reason for the learned Single Judge to have accepted the plea of
coercion as far as the claim of Welcome Drink is concerned, as they
both rested on the same facts and submission of the claimant. He
submits that in case the plea of coercion is to be rejected, the claim of
the claimant would be clearly barred by contract as also Principle of
Waiver and Estoppel.

33. He submits that the reliance of the claimant on the internal file
noting of the Railways and the Railway‟s Board letter dated
03.01.2019 is also ill-founded as the said decision taken by the
Railways would operate only prospectively. He submits that these
documents were also not relied upon by the claimant before the
learned Sole Arbitrator or before the learned Single Judge in the
petition filed under Section 34 of the A&C Act. In any case, internal
file noting cannot be construed as orders of the Government or create
binding obligations on the respondent.

34. He submits that the learned Sole Arbitrator has also erred in
allowing the claim of the claimant on the ground of equity. He
submits that under Section 28(2) of the A&C Act, the Arbitral
Tribunal can decide ex aequo et bono only if the parties have
expressly authorized it to do so. He submits that in the present case,
no such authorization was given to the learned Sole Arbitrator by the
parties.

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35. He further submits that there was no evidence led by the
claimant towards the quantification of its claim for the Welcome
Drink. He submits that the Occupancy Certificate only shows the
number of passengers travelling in the train and it is not necessary that
every passenger would have had the Welcome Drink. He submits that
the claimant did not produce any bill for purchase of Welcome Drink
or particulars of the cost incurred by it for the same. He submits that,
therefore, the claim of the claimant had been rightly denied by the
respondent. In spite of the same, the learned Sole Arbitrator and the
learned Single Judge erred in allowing the same by placing the onus to
disprove this claim on the respondent.

36. As far as the reliance of the learned Sole Arbitrator and the
learned Single Judge on the testimony of the Chartered Accountant is
concerned, he submits that the Chartered Accountant produced by the
claimant, in his cross-examination, has admitted that he was not aware
of the number of the Welcome Drinks supplied by the claimant.

37. He submits that the present case was, therefore, not of mere
incorrect appreciation of evidence by an Arbitrator but the case of an
Arbitrator rendering his Award without there being any evidence.

38. He submits that even otherwise, the claim as far as the
Welcome Drink is concerned, arose with the Commercial Circular
06.08.2014 and in terms of Article 55 of the Schedule to the
Limitation Act, the period of limitation shall end on 05.08.2017.

Every purported instance of supply will not give rise to a new cause of
action. In support, he places reliance on the Judgments of the Supreme

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Court in Raja Ram Maize Products v. Industrial Court of M.P.,
(2001) 4 SCC 492 and in BSNL v. Nortel Networks (India) Pvt. Ltd.,
(2021) 5 SCC 738.

39. He submits that the claim of the claimant qua the Circular dated
06.08.2014, mandating the claimant to serve a Welcome Drink, and
the claim of the Claimant qua the Circular dated 23.10.2013,
mandating the claimant to serve two Regular Meals instead of one
Regular Meal and one Combo Meal, are barred by estoppel and even,
in fact, by the MLA. He submits that Clause 1.4 read with Clause 8.1
of the MLA bestowed a unilateral and unfettered right upon the
respondent to modify/alter the catering tariff and the menu, including
without addition to the tariff. He submits that the Circular dated
06.08.2014 was issued by the respondent in exercise of the said
powers.

40. He submits that the claimant had not objected to any such
additions/alterations in the menu earlier. Rather, the claimant had
merely made vague representations in respect of the
additions/alterations in the menu, vide Letters dated 22.06.2015,
03.08.2016, 23.08.2016 and 25.11.2016. However, in none of these
representations did the claimant claim any amount for reimbursement
for the additions/alterations in the menu. Therefore, the claimant
cannot now seek such a claim at this belated stage.

41. He submits that the claim of the claimant qua the Welcome
Drink and the Second Regular Meal are barred by limitation as the
cause of action for the alleged breach arose with the introduction of

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the Circulars, and therefore, in terms of Article 55 of the Schedule to
the Limitation Act, the period of limitation for the claim of the Second
Regular Meal began to run from the date of the Circular dated
23.10.2013, or at best, from the date of commencement of service by
claimant, that is, 21.01.2014, or from the date of first invoice, that is,
31.01.2014, and would end on 31.01.2017.

42. He submits that the limitation for the claim of the Welcome
Drinks commenced on 06.08.2014 and ended on 05.08.2017. He
further submits that the claimant cannot rely on every purported
instance of supply of the Second Regular Meal or Welcome Drink as
being a cause of action, because the alleged breach that has taken
place is a one-time breach and any alleged supply was based on the
said breach itself, that is, the Circular dated 23.10.2013 and Circular
dated 06.08.2014. In support, he places reliance on the Judgments of
the Supreme Court in Raja Ram Maize Products (supra) and in Nortel
Networks India Pvt. Ltd. (supra).

43. He submits that even if it is presumed that the claim of the
claimant is based on each supply, the learned Sole Arbitrator and the
learned Single Judge have failed to appreciate that there were no bills
raised by the claimant for the amounts now claimed. Therefore, the
cause of action cannot be said to be arising from these bills.

44. He submits that in any case, the claimant cannot take benefit of
Section 14 of the Limitation Act for pursuing the Writ Petition filed
by it, as the prayer of the claimant therein was seeking setting aside of
the Circulars dated 23.10.2013 and 06.08.2014 and consequential

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relief, however, the relief sought by the claimant in the Statement of
Claim before the learned Sole Arbitrator was that of reimbursement of
monies. Hence, the relief being different, and the conduct of the
claimant not being „bona fide‟, the claimant cannot claim the benefit
of Section 14 of the Limitation Act. In support, he places reliance on
the Judgment of this Court in Niyogi Offset Printing Press Ltd. v.
Doctor Morepen Ltd., 2007 SCC OnLine Del 358.

45. Challenging the award of interest, he submits that the Impugned
Award grants interest to the claimant from 01.01.2018. As interest has
been awarded on the lump sum amount awarded in favour of the
claimant, it would mean that even for the amount that would become
due post 01.01.2018, interest has been awarded from date prior
thereto. This has also become evident from the claim raised by the
claimant in the Execution Proceedings.

46. Defending the setting aside of the Award as far as the claim of
the claimant towards the Second Regular Meal is concerned, he
submits that the learned Sole Arbitrator had erred in accepting the plea
of coercion raised by the claimant in absence of any evidence to
support the same. This finding was therefore, rightly set aside by the
learned Single Judge. Reiterating that the claimant had not raised any
bill towards the enhanced amount of Second Regular Meal, but had
continued to raise bill for the Combo Meal, he submits that the MLA
had been executed by the claimant after the Commercial Circular
dated 23.10.2013 had been issued providing that no extra charge shall
be payable for the supply of Second Regular Meal in place of a

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Combo Meal. He submits that along with the MLA, the chart for
Apportionment Charges that was attached also showed the charges in
accordance with the Circular dated 23.10.2013, which the claimant
accepted. He submits that therefore, the learned Single Judge has
rightly held that the claimant was estopped from now claiming the
said amount.

47. He submits that the learned Single Judge has rightly held that
the respondent, in terms of Clause 1.4 read with Clause 8.1 of the
MLA, was within its right to change the menu and tariff and therefore,
the claimant was under an obligation to supply the Second Regular
Meal though at the charges applicable for a Combo Meal. He submits
that the learned Single Judge has rightly held that the Arbitral Award
had been passed on ground of equity rather than on contract and had,
in fact, created a new contract between the parties. This was not a
mere interpretation of contract, but creation of a new contract.

48. He submits that even otherwise, the claim of the claimant
towards Regular Second Meal was barred by Law of Limitation as it
arose with Commercial Circular dated 23.10.2013.

Submissions of the learned Senior Counsels for the Claimant:

49. Mr. Sanjay Jain and Mr. Joy Basu, the learned senior counsels
for the claimant, on the other hand, submitted that the learned Single
Judge erred in setting aside the Arbitral Award with respect to the
Second Regular Meal. They submit that the learned Single Judge erred
in not appreciating the limited jurisdiction of interference with an

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Arbitral Award enjoyed by a Court under Section 34 of the A&C Act.
They submit that the learned Single Judge has exceeded his
jurisdiction in setting aside the Award in so far as it had allowed the
claim on account of supply of Second Regular Meal in favour of the
claimant. They submit that a mere possibility of an alternative view on
facts or on the interpretation of the contract, does not entitle the Courts
to reverse the findings of the Arbitral Tribunal under Section 34 of the
A&C Act.

50. As far as the finding of the learned Single Judge on the claim
for Welcome Drink is concerned, they submit that the scope of
judicial intervention of this Court under Section 37 of the A&C Act is
limited and akin to Section 34 of the A&C Act. In support, they place
reliance on the Judgments of the Supreme Court in Konkan Railway
Corpn. Ltd. v. Chenab Bridge Project, (2023) 9 SCC 85, Punjab
State Civil Supplies Corpn. Ltd. & Anr. v. Sanman Rice Mills &
Ors., 2024 SCC OnLine SC 2632 and MMTC Ltd. v. Vedanta Ltd.,
(2019) 4 SCC 163. They submit that therefore, no interference is
called for in the concurrent findings of the learned Sole Arbitrator and
the learned Single Judge on this claim.

51. They submit that the claim of the claimant qua the supply of the
Second Regular Meal and the Welcome Drinks are not barred by
waiver/estoppel. They submit that the claimant has duly agitated the
issue of supply of Second Regular Meal and the Welcome Drinks vide
Letters dated 22.06.2015, 03.08.2016, 23.08.2016, and 25.11.2016.
Further, the claimant, by way of the above mentioned Writ Petition

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filed before this Court, had also challenged the decision of the
respondent to mandate the supply of Welcome Drink. They submit
that, in any case, Clause 21.6 of the MLA provides that any delay or
omission on part of any party to exercise its rights under the MLA
shall not be construed as a waiver. In support, they place reliance on
the Judgment of the Supreme Court in Kalpraj Dharamshi & Anr. v.
Kotak Investment Advisors Ltd. & Anr., (2021) 10 SCC 401.

52. They submit that the claimant had filed its claim within the
limitation period. They submit that the learned Sole Arbitrator and the
learned Single Judge have rightly extended the benefit of Section 14
of the Limitation Act to the claimant, as the claimant had bona fidely
challenged the Circular dated 06.08.2014 by the above mentioned
Writ Petition. While dismissing the Writ Petition, this Court had
granted liberty to the petitioner to raise its claims in arbitration, in
exercise of which, the claimant had invoked the arbitration agreement
between the parties. In support, he places reliance on the Judgments of
the Supreme Court in Rameshwarlal v. Municipal Council, Tonk &
Ors.,(1996) 6 SCC 100, and M.P. Steel Corpn. v. CCE, (2015) 7 SCC
58.

53. They submit that even on merits, the claimant has proved its
claim for the reimbursement for supply of the Second Regular Meal
and the Welcome Drink by the Occupancy Certificate duly certified
by the Train Superintendent, which provides the number of passengers
on the train. The claimant had also filed a detailed computation of its
claim certified by CW-1, a Chartered Accountant. They further submit

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that the rate of the Welcome Drink was calculated in terms of the
Circular dated 09.10.2013 and the Railway Policy.

54. They submit that since the claimant have provided the Second
Regular Meal instead of the Combo Meal, they were to be
compensated for the same, as was rightly held by the learned Sole
Arbitrator. However, the learned Single Judge erred in interpreting the
Circulars dated 09.10.2013 and 23.10.2013 and Clause 1.4 and 8.1 of
the MLA. They submit that the interpretation placed by the learned
Sole Arbitrator on the said Circulars, could not have been interfered
with by the learned Sole Arbitrator only because it preferred another
interpretation to the same.

Analysis and Findings:

55. We have considered the submissions made by the learned
counsels for the parties.

Scope of Appeal under Section 37 of the A&C Act

56. At the outset, we may state that the jurisdiction of the Court
under Section 37 of the A&C Act is limited only to examine if the
learned Court from which the appeal arises, has erred in applying the
principles applicable to the limited jurisdiction vested in such Court
under Section 34 of the A&C Act. If the Award or part thereof has
been set aside by the Court going beyond the limited grounds stated in
Section 34 of the A&C Act, the Court in exercise of its powers under
Section 37 of the A&C Act, shall set aside such order. Equally, if the
learned Court has refused to set aside an Arbitral Award though the
grounds set out in Section 34 of the A&C Act were made out, the

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Court exercising its powers under Section 37 of the A&C Act, shall
again set aside such order as also the Arbitral Award. To put it
succinctly, the jurisdiction of the Court under Section 34 of the A&C
Act and Section 37 of the A&C Act is akin and pari materia as far as
considering the challenge to the Arbitral Award is concerned. They
are circumscribed by the limited scope of challenge to the Arbitral
Award on the grounds mentioned in Section 34 of the A&C Act. This
limitation on jurisdiction has been explained by the Supreme Court in
MMTC Ltd. (supra), in the following words:

“14.As far as interference with an order made
under Section 34, as per Section 37, is
concerned, it cannot be disputed that such
interference under Section 37 cannot travel
beyond the restrictions laid down under
Section 34. In other words, the court cannot
undertake an independent assessment of the
merits of the award, and must only ascertain
that the exercise of power by the court under
Section 34 has not exceeded the scope of the
provision. Thus, it is evident that in case an
arbitral award has been confirmed by the
court under Section 34 and by the court in an
appeal under Section 37, this Court must be
extremely cautious and slow to disturb such
concurrent findings.”

57. The Supreme Court recently, in Punjab State Civil Supplies
Corpn. Ltd.(supra), while expounding the law laid down in MMTC
Ltd. (supra), and Konkan Railways (supra), held as under:

“8. The short question on the submission of the
parties, which arises for our consideration is
about the scope of powers of the Appellate
Court under Section 37 of the Act and whether
the Appellate Court was justified in setting

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aside the award dated 08.11.2012 which had
already been confirmed under Section 34 of
the Act.

9. The object of the Act is to provide for a
speedy and inexpensive alternative mode of
settlement of dispute with the minimum of
intervention of the courts. Section 5 of the Act
is implicit in this regard and prohibits
interference by the judicial authority with the
arbitration proceedings except where so
provided in Part-I of the Act. The judicial
interference, if any, is provided inter-alia only
by means of Sections 34 and 37 of the Act
respectively.

10. Section 34 of the Act provides for getting
an arbitral award set aside by moving an
application in accordance with sub-Section (2)
and sub-Section (3) of Section 34 of the Act
which inter-alia provide for the grounds on
which an arbitral award is liable to be set
aside. One of the main grounds for
interference or setting aside an award is
where the arbitral award is in conflict with the
public policy of India i.e. if the award is
induced or affected by fraud or corruption or
is in contravention with the fundamental policy
of Indian law or it is in conflict with most
basic notions of morality and justice. A plain
reading of Section 34 reveals that the scope of
interference by the court with the arbitral
award under Section 34 is very limited and the
court is not supposed to travel beyond the
aforesaid scope to find out if the award is
good or bad.

11. Section 37 of the Act provides for a forum
of appeal inter-alia against the order setting
aside or refusing to set aside an arbitral
award under Section 34 of the Act. The scope
of appeal is naturally akin to and limited to
the grounds enumerated under Section 34 of
the Act.

12. It is pertinent to note that an arbitral
award is not liable to be interfered with only

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on the ground that the award is illegal or is
erroneous in law that too upon reappraisal of
the evidence adduced before the arbitral trial.
Even an award which may not be reasonable
or is non-speaking to some extent cannot
ordinarily be interfered with by the courts. It is
also well settled that even if two views are
possible there is no scope for the court to
reappraise the evidence and to take the
different view other than that has been taken
by the arbitrator. The view taken by the
arbitrator is normally acceptable and ought to
be allowed to prevail.

13. In paragraph 11 of Bharat Coking Coal
Ltd. v. L.K. Ahuja, it has been observed as
under:

“11. There are limitations upon the
scope of interference in awards passed
by an arbitrator. When the arbitrator
has applied his mind to the pleadings,
the evidence adduced before him and the
terms of the contract, there is no scope
for the court to reappraise the matter as
if this were an appeal and even if two
views are possible, the view taken by the
arbitrator would prevail. So long as an
award made by an arbitrator can be said
to be one by a reasonable person no
interference is called for. However, in
cases where an arbitrator exceeds the
terms of the agreement or passes an
award in the absence of any evidence,
which is apparent on the face of the
award, the same could be set aside.”

14. It is equally well settled that the appellate
power under Section 37 of the Act is not akin
to the normal appellate jurisdiction vested in
the civil courts for the reason that the scope
of interference of the courts with arbitral
proceedings or award is very limited,
confined to the ambit of Section 34 of the Act
only and even that power cannot be exercised
in a casual and a cavalier manner.

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15. In Dyna Technology Private Limited v.

Crompton Greaves Limited, the court observed
as under:

“24. There is no dispute that Section 34
of the Arbitration Act limits a challenge
to an award only on the grounds
provided therein or as interpreted by
various courts. We need to be cognizant
of the fact that arbitral awards should
not be interfered with in a casual and
cavalier manner, unless the court comes
to a conclusion that the perversity of the
award goes to the root of the matter
without there being a possibility of
alternative interpretation which may
sustain the arbitral award. Section 34 is
different in its approach and cannot be
equated with a normal appellate
jurisdiction. The mandate under Section
34 is to respect the finality of the arbitral
award and the party autonomy to get
their dispute adjudicated by an
alternative forum as provided under the
law. If the courts were to interfere with
the arbitral award in the usual course on
factual aspects, then the commercial
wisdom behind opting for alternate
dispute resolution would stand
frustrated.

25. Moreover, umpteen number of
judgments of this Court have
categorically held that the courts should
not interfere with an award merely
because an alternative view on facts and
interpretation of contract exists. The
courts need to be cautious and should
defer to the view taken by the Arbitral
Tribunal even if the reasoning provided
in the award is implied unless such
award portrays perversity unpardonable
under Section 34 of the Arbitration Act.”

16.It is seen that the scope of interference in
an appeal under Section 37 of the Act is

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restricted and subject to the same grounds on
which an award can be challenged under
Section 34 of the Act. In other words, the
powers under Section 37 vested in the court
of appeal are not beyond the scope of
interference provided under Section 34 of the
Act.

17. In paragraph 14 of MMTC Limited v.

Vedanta Limited, it has been held as under:

“14. As far as interference with an order
made under Section 34, as per Section
37, is concerned, it cannot be disputed
that such interference under Section 37
cannot travel beyond the restrictions laid
down under Section 34. In other words,
the court cannot undertake an
independent assessment of the merits of
the award, and must only ascertain that
the exercise of power by the court under
Section 34 has not exceeded the scope of
the provision. Thus, it is evident that in
case an arbitral award has been
confirmed by the court under Section 34
and by the court in an appeal under
Section 37, this Court must be extremely
cautious and slow to disturb such
concurrent findings.”

18. Recently a three-Judge Bench in Konkan
Railway Corporation Limited v. Chenab
Bridge Project Undertaking referring to
MMTC Limited (supra) held that the scope of
jurisdiction under Section 34 and Section 37 of
the Act is not like a normal appellate
jurisdiction and the courts should not interfere
with the arbitral award lightly in a casual and
a cavalier manner. The mere possibility of an
alternative view on facts or interpretation of
the contract does not entitle the courts to
reverse the findings of the arbitral tribunal.

19. In Bombay Slum Redevelopment
Corporation Private Limited v. Samir Narain
Bhojwani, a Division Bench of this Court
followed and reiterated the principle laid

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down in the case of MMTC Limited (supra)
and UHL Power Company Limited v. State of
Himachal Pradesh. It quoted and highlighted
paragraph 16 of the latter judgment which
extensively relies upon MMTC Limited
(supra). It reads as under:

“16. As it is, the jurisdiction conferred
on courts under Section 34 of the
Arbitration Act is fairly narrow, when it
comes to the scope of an appeal under
Section 37 of the Arbitration Act, the
jurisdiction of an appellate court in
examining an order, setting aside or
refusing to set aside an award, is all the
more circumscribed. In MMTC Ltd. v.
Vedanta Ltd. [MMTC Ltd. v. Vedanta
Ltd., (2019) 4 SCC 163 : (2019) 2 SCC
(Civ) 293], the reasons for vesting such
a limited jurisdiction on the High Court
in exercise of powers under Section 34 of
the Arbitration Act have been explained
in the following words : (SCC pp. 166-

67, para 11)
“11. As far as Section 34 is concerned,
the position is well-settled by now that
the Court does not sit in appeal over the
arbitral award and may interfere on
merits on the limited ground provided
under Section 34(2)(b)(ii) i.e. if the
award is against the public policy of
India. As per the legal position clarified
through decisions of this Court prior to
the amendments to the 1996 Act in 2015,
a violation of Indian public policy, in
turn, includes a violation of the
fundamental policy of Indian law, a
violation of the interest of India, conflict
with justice or morality, and the
existence of patent illegality in the
arbitral award. Additionally, the concept
of the “fundamental policy of Indian
law” would cover compliance with
statutes and judicial precedents,

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adopting a judicial approach,
compliance with the principles of natural
justice, and Wednesbury [Associated
Provincial Picture Houses Ltd. v.

Wednesbury Corpn., [1948] 1 K.B. 223
(CA)] reasonableness. Furthermore,
“patent illegality” itself has been held to
mean contravention of the substantive
law of India, contravention of the 1996
Act, and contravention of the terms of
the contract.””

20.In view of the above position in law on the
subject, the scope of the intervention of the
court in arbitral matters is virtually
prohibited, if not absolutely barred and that
the interference is confined only to the extent
envisaged under Section 34 of the Act. The
appellate power of Section 37 of the Act is
limited within the domain of Section 34 of the
Act. It is exercisable only to find out if the
court, exercising power under Section 34 of
the Act, has acted within its limits as
prescribed thereunder or has exceeded or
failed to exercise the power so conferred. The
Appellate Court has no authority of law to
consider the matter in dispute before the
arbitral tribunal on merits so as to find out as
to whether the decision of the arbitral
tribunal is right or wrong upon reappraisal of
evidence as if it is sitting in an ordinary court
of appeal. It is only where the court
exercising power under Section 34 has failed
to exercise its jurisdiction vested in it by
Section 34 or has travelled beyond its
jurisdiction that the appellate court can step
in and set aside the order passed under
Section 34 of the Act. Its power is more akin
to that superintendence as is vested in civil
courts while exercising revisionary powers.
The arbitral award is not liable to be
interfered unless a case for interference as
set out in the earlier part of the decision, is
made out. It cannot be disturbed only for the

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reason that instead of the view taken by the
arbitral tribunal, the other view which is also
a possible view is a better view according to
the appellate court.

21. It must also be remembered that
proceedings under Section 34 of the Act are
summary in nature and are not like a full-
fledged regular civil suit. Therefore, the scope
of Section 37 of the Act is much more
summary in nature and not like an ordinary
civil appeal. The award as such cannot be
touched unless it is contrary to the
substantive provision of law; any provision of
the Act or the terms of the agreement.”

(Emphasis Supplied)

58. In Delhi Metro Rail Corporation Limited vs. Delhi Airport
Metro Express Private Limited, (2024) 6 SCC 357, the Supreme
Court reiterated the above principle as under:-

“40. A judgment setting aside or refusing to
set aside an arbitral award under Section 34 is
appealable in the exercise of the jurisdiction of
the court under Section 37 of the Arbitration
Act. It has been clarified by this Court, in a
line of precedent, that the jurisdiction under
Section 37 of the Arbitration Act is akin to the
jurisdiction of the Court under Section 34 and
restricted to the same grounds of challenge as
Section 34.”

Scope of Interference with an Arbitral Award under Section 34 of
the A&C Act:

59. Section 34 of the A&C Act states the grounds for setting aside
an Arbitral Award. So far as it is relevant for the grounds on which an
Arbitral Award may be set aside by the Court, reads as under:-

“(2) An arbitral award may be set aside by
the Court only if–

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(a) the party making the
application establishes on the basis of the
record of the arbitral tribunal that–

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid
under the law to which the parties have
subjected it or, failing any indication thereon,
under the law for the time being in force; or

(iii) the party making the application was not
given proper notice of the appointment of an
arbitrator or of the arbitral proceedings or
was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not
contemplated by or not falling within the terms
of the submission to arbitration, or it contains
decisions on matters beyond the scope of the
submission to arbitration:

Provided that, if the decisions on matters
submitted to arbitration can be separated from
those not so submitted, only that part of the
arbitral award which contains decisions on
matters not submitted to arbitration may be set
aside; or

(v) the composition of the arbitral tribunal or
the arbitral procedure was not in accordance
with the agreement of the parties, unless such
agreement was in conflict with a provision of
this Part from which the parties cannot
derogate, or, failing such agreement, was not
in accordance with this Part; or

(b) the Court finds that–

(i) the subject-matter of the dispute is not
capable of settlement by arbitration under the
law for the time being in force, or

(ii) the arbitral award is in conflict with the
public policy of India.

[Explanation 1.–For the avoidance of any
doubt, it is clarified that an award is in
conflict with the public policy of India, only if,-

–

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(i) the making of the award was induced or
affected by fraud or corruption or was in
violation of section 75 or section 81; or

(ii) it is in contravention with the fundamental
policy of Indian law; or

(iii) it is in conflict with the most basic notions
of morality or justice.

Explanation 2.–For the avoidance of doubt,
the test as to whether there is a contravention
with the fundamental policy of Indian law
shall not entail a review on the merits of the
dispute.]
(2A) An arbitral award arising out of
arbitrations other than international
commercial arbitrations, may also be set aside
by the Court, if the Court finds that the award
is vitiated by patent illegality appearing on the
face of the award:

Provided that an award shall not be set aside
merely on the ground of an erroneous
application of the law or by reappreciation of
evidence.

(3) An application for setting aside may not be
made after three months have elapsed from the
date on which the party making that
application had received the arbitral award
or, if a request had been made under section
33, from the date on which that request had
been disposed of by the arbitral tribunal:

Provided that if the Court is satisfied that the
applicant was prevented by sufficient cause
from making the application within the said
period of three months it may entertain the
application within a further period of thirty
days, but not thereafter.

(4) On receipt of an application under sub-

section (1), the Court may, where it is
appropriate and it is so requested by a party,
adjourn the proceedings for a period of time
determined by it in order to give the arbitral

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tribunal an opportunity to resume the arbitral
proceedings or to take such other action as in
the opinion of arbitral tribunal will eliminate
the grounds for setting aside the arbitral
award.

(5) An application under this section shall be
filed by a party only after issuing a prior
notice to the other party and such application
shall be accompanied by an affidavit by the
applicant endorsing compliance with the said
requirement.

(6) An application under this section shall be
disposed of expeditiously, and in any event,
within a period of one year from the date on
which the notice referred to in sub-

section (5) is served upon the other party.”

60. A reading of the above provision would show that apart from
other specific grounds, an Arbitral Award may be set aside by a Court
where the Court finds it to be in conflict with the public policy of
India, which concept has been clarified in Explanation 1 and 2 to
Section 34(2) of the A&C Act. An Arbitral Award arising out of
domestic arbitrations, as is the case herein, may also be set aside by
the Court if the Award is vitiated by patent illegality appearing on the
face of the Award. Proviso to Section 34(2A) of the A&C Act,
however, clarifies and warns that an Award shall not be set aside
merely on the ground of an erroneous application of the law or by re-
appreciation of evidence.

61. In Delhi Metro Rail Corporation Limited (Supra), the Supreme
Court relying upon its earlier judgments in Associate Builders vs.
DDA, (2015) 3 SCC 49 and Ssangyong Engg. & Construction Co.
Ltd. vs. NHAI, (2019) 15 SCC 131, held that the ground of patent

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illegality is available if the decision of the Arbitrator is found to be
perverse, or so irrational that no reasonable person would have arrived
at it; or the construction of the contract is such that no fair or
reasonable person would take; or the view of the Arbitrator is not even
a possible view. A finding based on no evidence at all or an Award
which ignores the vital evidence in arriving at its decision would be
perverse and liable to be set aside under the head of „patent illegality‟.
So would be an Award without reasons or where the Arbitrator
decides a matter not within his jurisdiction or in violation of the
principles of natural justice.

62. From a reading of the above judgments, it is evident that a
petition under Section 34 of the A&C Act is not an appeal on merits
against the Arbitral Award. The jurisdiction of the Court, while
adjudicating on a petition under Section 34 of the A&C Act against a
Domestic Award, is on extremely limited grounds.

63. Even on the question of interpretation of the contract, the
Supreme Court in Konkan Railways (supra) held that the Arbitral
Tribunal is the final authority and the Court, while exercising its
power under Section 34 of the A&C Act, cannot interfere with the
Arbitral Award merely because the interpretation of the contractual
terms by the Arbitral Tribunal is found to be incorrect. The principle
that when two constructions are possible, then Court must prefer the
one which gives effect and voice to all clauses, does not have absolute
application in exercising powers under Section 34 of the A&C Act.
While exercising the jurisdiction under Section 34 of the A&C Act,

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the Court is only to see if the Arbitral Tribunal‟s view is perverse or
manifestly arbitrary. The question of reinterpreting a Contract on an
alternative view does not arise. Similar restrictions are placed on a
Court hearing an appeal against an order passed in a petition under
Section 37 of the A&C Act. We may quote from the said judgment as
under:-

“25.The principle of interpretation of contracts
adopted by the Division Bench of the High
Court that when two constructions are
possible, then courts must prefer the one which
gives effect and voice to all clauses, does not
have absolute application. The said
interpretation is subject to the jurisdiction
which a court is called upon to exercise. While
exercising jurisdiction under Section 37 of the
Act, the Court is concerned about the
jurisdiction that the Section 34 Court
exercised while considering the challenge to
the arbitral award. The jurisdiction under
Section 34 of the Act is exercised only to see if
the Arbitral Tribunal’s view is perverse or
manifestly arbitrary. Accordingly, the question
of reinterpreting the contract on an alternative
view does not arise. If this is the principle
applicable to exercise of jurisdiction under
Section 34 of the Act, a Division Bench
exercising jurisdiction under Section 37 of the
Act cannot reverse an award, much less the
decision of a Single Judge, on the ground that
they have not given effect and voice to all
clauses of the contract. This is where the
Division Bench of the High Court committed
an error, in re-interpreting a contractual
clause while exercising jurisdiction under
Section 37 of the Act. In any event, the
decision in Radha Sundar Dutta, relied on by
the High Court was decided in 1959, and it
pertains to proceedings arising under the
Village Chaukidari Act, 1870 and Bengal

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Patni Taluks Regulation of 1819. Reliance on
this judgment particularly for interfering with
the concurrent interpretations of the
contractual clause by the Arbitral Tribunal
and Single Judge under Section 34 of the Act
is not justified.”

Consideration on merits:

64. Keeping the above cardinal principles of law in mind, we now
proceed to consider the cross-appeals of the parties.

65. From the above narration of facts, what would be evident is that
the dispute before the learned Sole Arbitrator was on two claims of the
claimant:-

a) Whether the claimant was entitled to additional payments for
having served a Second Regular Meal (dinner) instead of a
Combo Meal as the Second Meal;

b) Whether the claimant was entitled to claim reimbursement for
the Welcome Drink served by the claimant.

Claim for supply of second Regular Meal:

66. To further appreciate the claim of the claimant qua the supply
of Second Regular Meal, a brief timeline of how these claim arose,
would need a reiteration:-

i) The Indian Railways had invited bids on 27.05.2013 for the
Subject Tender. At the relevant time, the menu and the tariff
were governed by the 1999 Policy, issued by the Indian
Railways.

ii) The claimant submitted their bids on 27.06.2013, however,

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before the issuance of the LOA, two major incidents took
place:-

a. By Circular dated 09.10.2013, the Indian Railways
introduced the concept of a „combo meal‟. The Circular, so
far as it is relevant to the present set of appeals, is
reproduced hereinunder:-

“The Menu & tariff of catering services for
Rajdhani/Shatabdi/Duronto express trains was
last revised in the year 1999.

Rajdhani/Shatabdi/Duronto Express trains are
the prestigious premier trains of Indian
Railway. Since 1999, the cost of raw materials
used for catering services has increased
manifold due to inflation etc. A review of menu
and tariff has been done through committees
set up by the Board to determine the norms for
apportionment of catering charges in the fares
of Rajdhani/Shatabdi/Duronto express trains.
Accordingly, based on the committee’s
recommendations, Board has decided to revise
the menu and tariff which are given as under.

*****
1.4 The concept of combo meal for
Rajdhani/Duronto express trains has been
introduced in place of regular Second Meal of
the day where more than one meal services are
provided. The third/following meal shall be the
regular meal and the sequence of every
alternate meal as combo meal shall be
followed for the particular train. At one point
of time only one type of meal will be served in
the entire train.

******
IA/EC
Type of Revised catering charges to be Revised catering charges to be
service disbursed to the licensee without included in fare (Inclusive of
service tax. present service tax @8.66%.)
(1) (2) (3)

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….. …… …..

                Lunch     129.50                                 145.00
                .....       .....                                    .....
                Dinner    129.50                                 145.00
                Combo     66.50                                  75.00
                meals
                                                  2AC/3AC/CC
                Type of Revised catering charges to be       Revised catering charges to be
                service disbursed to the licensee without    included in fare (Inclusive of
                        service tax.                         present service tax @8.66%.)
                (1)     (2)                                  (3)
                .....     ......                                   .....
                Lunch   112.00                               125.00
                .....     .....                                  .....
                Dinner 112.00                                125.00
                Combo 66.50                                  75.00
                meals

b) Within a few days of the issuance of the Circular dated
09.10.2013, Indian Railways issued the Circular dated
23.10.2013 as Corrigendum no.1 to the Circular dated
09.10.2013, which, so far as is relevant to the issues in the
present set of appeals, is reproduced hereinunder:-

“(Commercial Circular No. 67 of 2013)
(Corrigendum No.1 to Commercial Circular
No. 63 of 2013)
Sub: Revision of Menu/tariff of catering
services in Rajdhani/Shatabdi/Duronto
Express Trains
Ref: Commercial Circular No. 63/2013 issued
vide Board’s letter no. 2011/TG- III/631/5
dated 09/10/13
A. review of decision on revision of menu/tariff
of catering services in Rajdhani/Shatabdi
Duronto Express Trains has been undertaken
based on the feedback received from Zonal
Railways.

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Accordingly, the following instructions may be
complied with immediate effect:-

(i) Regular Meal, in place of Combo Meal,
may be restored. Accordingly, Paral.4 of CC
63/2013 regarding combo meal is deleted.

(ii) Quantity of Paneer dish, Chicken dish and
Dal be restored to 150gms. Paneer dish with
seasonal veg. (150gms with Paneer 70gms)
and Chicken dish with thick gravy (150gms
with Chicken 80-100gms) should be served
(Neck and wing portion of chicken should not
be served).

(iii)Kathi Roll/ Samosa/ Patties/ Kachori/
Sandwiches be served in Evening Tea.

(iv) Flavoured Milk/Milk Shake be served to
the passengers in food grade per bottles/tetra
pack.

(v) Sale of beverages on board is pended.

Accordingly, Para 13 of CC 63/2013 may be
kept pended.

The above changes will be done without any
increase in charges.”

67. A reading of the above Circulars would show that the Combo
Meal, which was introduced by the Circular dated 09.10.2013, was
disbanded/discontinued and the Second Regular Meal was re-
introduced. There were also changes made in the quantity of the
dishes to be served and the composition of the evening tea. It was also
provided that “the above changes will be done without any increase in
charges”.

68. As noted hereinabove, the learned senior counsel for the
claimant has asserted that the above Circular, so far as it states that the
changes will be without increase in charges, can have no effect on the
claim of the claimant inasmuch as its claim is based on the same

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charges as have been provided for in the Circular dated 09.10.2013 for
a Regular Meal, while, on the other hand, the learned Solicitor
General has submitted that the above stipulation would mean that
though the claimant was to now provide a Second Regular Meal
instead of a Combo Meal, the Second Regular Meal will be provided
at the rate that was applicable to a Combo Meal.

69. The learned Sole Arbitrator, in his Impugned Award dated
27.04.2022, rejected the plea of the learned Solicitor General, by
observing as under:-

“122. I also find that there has been no change
in the catering tariff as such and therefore, the
reliance of the Respondent on this Clause is
not proper. Admittedly, the rates contained in
Commercial Circular dated 09.10.2013
wherein the rates of both the regular meal as
well as the combo meal are specified. The
computation done by the Claimant is on the
basis of the rates specified therein only. In
other words, the Respondent’s action to direct
the Licensees to supply dinner and yet contend
that while making payment, rates of combo
meal will be considered, obviously cannot be
an instance falling under Clause 8.1, since this
is not an instance of change in catering tariff
In fact, the present factual scenario is one
where the Respondent directed the Claimant to
serve dinners for which a rate or price is
specified and thus, the question is whether the
Claimant are entitled to be reimbursed at the
price of the regular meal or at any price
lesser. Merely because the Respondent has
chosen to reimburse them at the rate of combo
meal would not bring this under Clause 8.1.
Similarly, with regard to the services of
Welcome Drink to the passengers, the same
also cannot be treated to fall within the scope
of Clause 8.1.”

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70. The learned Single Judge, however, invoked the Doctrine of
Waiver against the claimant by wrongly holding that the rate of the
“first Regular Meal was Rs.112 (in 2AC/3AC/CC) and the second
Regular Meal was Rs.66.50”. The learned Single Judge failed to
appreciate that the rate of Rs.66.50/- was prescribed in the Circular
dated 09.10.2013 as a rate for a Combo Meal and not for a Regular
Meal, as has been rightly held by the learned Sole Arbitrator.

71. The learned Single Judge has then invoked Clause 8.1 and
Clause 1.4 of the MLA against the claimant. Clause 8.1 of the MLA
reads as under:-

“8.1 Railway reserve the rights to change
catering tariff and menu for the Train at any
time after the award of the License. In the
event of any such change by the Railway, the
Licensee shall maintain the same quality and
hygiene standards for preparation, supply and
service of food/meals to passengers on the
Train as it were prior to such change.”

72. A reading of the above Clause would show that the
Railways/respondent, had a right to change the catering tariff and the
menu for the train at any time after the award of the licence. In the
present case, there was a change of menu, however, there was no
change in the tariff, as is evident when the two Commercial Circulars,
that are, the Circular dated 09.10.2013 and the Circular dated
23.10.2013, are read together.

73. The learned Sole Arbitrator had also discussed the effect of
Clause 8.1 on the claims of the claimant, by observing as under:-

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“120. Once again, I am unbale to agree with
the sweeping and overarching submissions
made by the Respondent. In my view, the
contracts cannot be interpreted in a manner
which will make it inequitable for one of the
contracting parties. I may note that Article 8
of the Master License Agreement deals with
changes in menu, tariff and duration of train.
Clause 8.2 provides that the Railways has a
right to change the time table, frequency, halts
and stoppages, routes, rake link, originating
and/or terminating stations of the train and it
further provides that the Licensees shall
maintain the same quality and hygiene
standards for preparation, supply and services
of food/meals to such passengers despite such
changes. Clause 8.3 also deals with revision in
catering tariff, the Licensee shall be allowed to
sell food/meals at the revised rates to the
passengers and the Licensee shall be
increased on pro rata basis/reassessment of
sales or both, as the case may be.

121. An overall reading of this Article 8 makes
it clear that there may be unforeseen
contingencies, given the nature of contract
between the parties, the supply of services
required to be made in the trains whose
frequency, time table, duration etc. may
undergo changes from time to time and in
order to cater to such contingencies, rights
have been reserved in favor of Indian
Railways to change catering tariff and menu.
However, these Clauses cannot come to the
aid of the Respondent in present case where
admittedly, the supplies have been made and
payments have either not been made or deficit
payments have been made.

122. I also find that there has been no change
in the catering tariff as such and therefore, the
reliance of the Respondent on this Clause is
not proper. Admittedly, the rates contained in
Commercial Circular dated 09.10.2013
wherein the rates of both the regular meal as

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well as the combo meal are specified. The
computation done by the Claimant is on the
basis of the rates specified therein only. In
other words, the Respondent’s action to direct
the Licensees to supply dinner and yet contend
that while making payment, rates of combo
meal will be considered, obviously cannot be
an instance falling under Clause 8.1, since this
is not an instance of change in catering tariff.
In fact, the present factual scenario is one
where the Respondent directed the Claimant to
serve dinners for which a rate or price is
specified and thus, the question is whether the
Claimant are entitled to be reimbursed at the
price of the regular meal or at any price
lesser. Merely because the Respondent has
chosen to reimburse them at the rate of combo
meal would not bring this under Clause 8.1.
Similarly, with regard to the services of
Welcome Drink to the passengers, the same
also cannot be treated to fall within the scope
of Clause 8.1.”

74. Clause 1.4 of the MLA, on which the learned Single Judge
placed reliance, reads as under:-

“1.4 It is agreed by the Licensee that the
norms with regards catering changes payable
to License for providing catering services to
the passengers on the Train are also subject to
the predetermined prices as set forth in
Annexure II of this Agreement. The Licensee
also hereby confirms and acknowledges that
Railway shall have the absolute right and
discretion to change and modify the prices set
forth in Annexure II without any need for prior
discussion with the Licensee and the decision
of Railway shall be strictly enforced by the
Licensee during the Term of this Agreement.”

75. The learned Sole Arbitrator, again dealt with the said Clause in

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his Impugned Award, by observing as under:-

“125. The Respondent next relied upon Clause
1.4 of the Master License Agreement which is
found at Page 681 of Common Convenience
Compilation, Volume-III. The Respondent
more particularly, relied upon the part, “the
licensee also hereby confirms and
acknowledges that Railway shall have the
absolute right and discretion to change and
modify the prices set forth in Annexure-II
without any need for prior discussion with the
Licensee and the decision of the Railway shall
be strictly enforced by the Licensee during the
term of this Agreement”. The Counsel for the
Respondent also produced the Annexure-II
mentioned in this Clause. The said Annexure
contains a set of revised apportionment
charges for the train in question. In the revised
apportionment charges, the services namely,
whether lunch, evening tea, morning tea,
breakfast, combo meal, dinner etc. required to
be given to passenger station wise, is specified
and in another column, the charges payable to
the Licensee for the services to be rendered to
passenger station wise, is also specified.
Evidently, even in this revised apportionment
charges submitted by the Respondent, one of
the services mentioned is “CM” which refers to
“Combo Meal”. Thus, it proves that even as
per Clause 1.4 read with the Annexure II, the
liability of the Claimant was to supply Combo
Meal and not the Regular Meal wherever it is
specified in the Annexure-II. Thus, from this
very Annexure-II cited by the Respondent, it is
clear that the prices payable to the Licensee
are calculated on the premise that a Combo
Meal is to be supplied which is so specifically
set out in the Column-“Services”. Hence, this
Annexure-II does not support the case of the
Respondent and in fact, favors the contention
of the Claimant herein in as much as the
liability was to supply Combo Meal and
therefore, the reimbursement was to be made

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at the price of the Combo Meal. However,
once the Respondent directed the Claimant to
supply Regular Meal then obviously the
reimbursement at the rate of Combo Meal will
not be justified on the basis of this revised
apportionment charges. Therefore, the
Respondent’s contention that this is a case
governed by Clause 1.4 and therefore, falls
within the absolute right and discretion of the
Respondent to change and modify the prices, is
again not correct. Again, at the cost of
repetition, it is emphasized that the instant
case is not the case of change or modification
of the prices since the rates or prices
contained in Circular dated 09.10.2013
remained unchanged.”

76. A reading of the above would show that the learned Sole
Arbitrator also took note of Annexure-II appended to the MLA.
Annexure II first described the menu of the various meals, including
the lunch/dinner for the 1AC/2AC/3AC/EC/CC; it then gives the
„revised apportionment charges for 12423-24 (Dibrugarh-Rajdhani)‟
(as far as that train is concerned). What strikes immediately is that in
the revised apportionment charges, the Combo Meal is again
mentioned for determining the rates payable to the licensee. This is in
spite of the fact that even before the MLA was executed on
21.04.2014, by the Circular dated 23.10.2013, the concept of service
of a Combo Meal had been disbanded/discontinued. It seems that in
the MLA, the old Circular of 09.10.2013 was relied upon, not
realising that the concept of Combo Meal was no longer in-vogue. The
claimant could not have served a Combo Meal to the passengers in
violation of the Circular dated 23.10.2013. At the same time, the

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respondent could also not have paid the claimant on the basis that it
was serving a Combo Meal, which would have been in violation to the
Circular dated 09.10.2013. The learned Sole Arbitrator, therefore, in
our opinion, rightly held that Clause 1.4 of the MLA or Annexure II
attached to the MLA, could not come to the aid of the respondent to
deny the claim of the claimant for the Second Regular Meal instead of
a Combo Meal.

77. The learned Single Judge has also placed reliance on Clause
1.3.1 of the Tender Document, which is reproduced hereinbelow:-

“1.3.1 The Licensee shall be responsible for
all catering services from pantry car on Train
No. 12423/24 as per Policy, guidelines,
instructions issued by Railway and other
statutory regulations. This will include supply
and service of fully cooked meals/food to
passengers on demand viz. breakfast, lunch,
dinner, snacks, tea, coffee etc. These
meals/food will be prepared, packed and
transported from the Kitchens set-up and
located at or around the
originating/terminating/en-route station(s) on
Railway premises/non railway area authorised
by railway administration to be set up by the
licensee.”

78. The learned Sole Arbitrator had also discussed the ambit and
scope of the above Clause, by holding as under:-

“115. I do not agree with the broad
proposition advanced by the Counsel for the
Respondent. This Clause cannot be interpreted
in such expansive manner thereby giving all
rights to the Respondent of any nature which
can then constitute a binding obligation on the
Claimant. I feel that each policy guideline or
instruction will have to be separately seen and

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examined to assess whether the same is
consistent with the object and obligations to be
performed by the parties, more so, by the
Claimant. Thus, this Clause cannot clothe the
Respondent with unilateral powers to issue
any directions whatsoever which would then
automatically deem to bind the Claimant. For
instance, any instruction or policy guideline
with regard to hygiene, cleanliness or relating
to passenger’s safety etc., would be viewed
differently and possibly one may accept the
contention of the Respondent that such policy
guideline or instruction if not otherwise
inconsistent with the contract, would have to
be complied by the Claimant given the nature
of their contract with the Respondent.

116. However, this cannot be logically
stretched to mean that incase, the Claimant
are directed to make supplies of certain
services, then the Respondent would also
reserve the right to decide as to whether the
Claimant should be paid or not at all or
should be paid at lesser rate than meant for
such service. Let me further stretch this
explanation to even assume that the
Respondent has the right to even change from
time to time, the supplies of services required
to be rendered by the Claimant. So, in a
particular train, the Respondent may direct
that a particular eatable item or beverages
may be discontinued for whatever reason, the
Respondent feel proper. In such a situation,
the Claimant will have to discontinue supply of
such item or beverages or services and would
therefore not be paid by the Respondent. In
such situation, the Claimant cannot urge that
the supplies should be continued or that they
should be reimbursed or compensated since
given the nature of their contract, they are
going to be changes from time to time
depending on multiple factors. However, it
cannot be countenanced that if the Respondent
direct the Claimant or other Licensees to

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render a particular service which leads to
additional costs being incurred by the
Licensees, then, even without their express
consent, the Respondent can assume or assert
that the Claimant will not be reimbursed such
additional costs incurred by them on account
of services rendered on the specific instruction
of the Respondent.”

79. A reading of the above Clause would show that the respondent
had a right to issue policy guidelines, instructions and regulations,
including for supply and service of fully cooked meals/food to the
passengers on demand, and the claimant were bound to follow such
instructions. In our view, this Clause, however, cannot be extended to
mean that while the respondent insisted upon the claimant/licensee to
serve a Second Regular Meal instead of a Combo Meal, the
respondent would, however, pay the claimant at the rate specified for a
Combo Meal. In none of the Commercial Circulars nor the Tender
Document nor the MLA, was there any Clause which stipulated that
for the Second Regular Meal the claimant/licensee will be paid at the
rate specified for the Combo Meal. Clause 1.3.1 of the Tender
Document, Clause 1.4, and Clause 8.1 of the MLA would have had
any relevance if there was such a Clause which stipulated that though
the licensee is obliged to serve a Second Regular Meal, it would be
paid only at the rate specified for a Combo Meal, which admittedly
consists of lesser food items and of lesser cost.

80. The learned Single Judge, therefore, in our view, has exceeded
his jurisdiction by interfering with the Arbitral Award by relying upon

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the above Clauses of the Tender Document and the MLA insofar as
the claim of the claimant for the Second Regular Meal is concerned.

81. As we have observed hereinabove, the Arbitral Tribunal is the
final arbiter on facts as also on the interpretation of the contractual
terms. The scope of jurisdiction under Section 34 of the A&C Act to
interfere with an Arbitral Award is restricted, and merely because the
interpretation of the learned Sole Arbitrator on a particular contractual
term does not find favour with the Court exercising jurisdiction under
Section 34 of the A&C Act, it cannot be said that the learned Sole
Arbitrator has exceeded its jurisdiction or has travelled beyond the
terms of the contract.

Claim for supply of Welcome Drink

82. One of the main submissions of the learned Solicitor General in
answer to both the claims of the claimant was that by not raising the
bills for the Second Regular Meal or for the Welcome Drink, the
claimant have waived its rights to later claim the same. The learned
Sole Arbitrator rejected the said challenge of the respondent, by
observing as under:-

“98. I do not agree that the Claimant can be
non-suited on the ground that they waived or
abandoned their rights to seek reimbursement
for the costs suffered to make supplies. It is an
admitted fact that tenders were issued prior to
the Commercial Circular dated 23.10.2013
and even the bids were submitted prior to the
this circular. Even though, from the record, it
appears that the letter of award was issued
later, but the Respondent did not seek any
consent from the Claimant as regards to their

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willingness to supply regular meals at the
price of the combo meal. I may observe that
the present contracts are in the nature of
commercial contracts where the parties have
to incur costs for providing services and
therefore, unless proved otherwise, it cannot
be accepted that a party would agree to
provide services and incur costs and not
expect to be adequately reimbursed. To put it
differently, in case a party is pleading waiver,
estoppel and acquiescence, then the onus is on
that party to establish the same as otherwise,
in normal circumstances, given that the
contract is of commercial nature for supply of
services, a party is legitimate in expecting
itself to be reimbursed for actual services
rendered. Thus, I am unable to agree with the
Respondent that merely because the Claimant
raised the bills and accepted payments under
those bills, would itself amount to an act of
waiver or abandonment or relinquishment of
their rights to seek reimbursement, if they are
otherwise entitled to seek under the law.

*****

102. I further agree with the submissions of
the Claimant that a waiver, has to be not only
conscious but also clear and express and it
cannot be so lightly and casually construed
that a party would so easily give up its
contractual rights. In fact, the Claimant has
invited my attention to Clause 21.6 of the
Master License Agreement which itself
provides that merely a delay or omission by
either party to exercise any of its right under
this agreement, will not be construed to be a
waiver thereof. Thus, this contractual
provision itself sounds a caution against a
plea of waiver being casually and lightly
invoked by a party against the other.

*****

105. I have no hesitation to find that the
Respondent did enjoy a superior and dominant

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position in the contract. It is admitted that the
Claimant have to pay their license fees as well
as security deposits in advance which they
paid. Their return on investment is in the form
of payments regularly received from the
Respondent against the regular monthly bills
raised towards the periodic services rendered
in the trains. Thus, the Claimant will not be in
a position to adopt a cavalier stand against the
Respondent given their status in the
contractual arrangement. Owing this, it will be
unfair to non-suit the Claimant only on the
account that they raised the bills and received
payments for the Respondent. The contractual
arrangement is also such that the Claimant
are required to make security deposits and pay
license fees in advance which given the nature
of contracts are significant and thus, it will not
be fair to assume that the Claimant could have
easily surrendered the contracts if they were
not happy with the circulars given the stakes
invested in these contracts. It also goes
without saying that merely because a party is
unhappy with certain actions of the other
contracting party, it is not necessary that it
must always surrender or opt out of the
contract as the aggrieved can always take
legal recourse to enforce its rights under the
contract.”

83. The learned Single Judge, however, considered the issue of
waiver separately for the claim of the claimant towards the Second
Regular Meal and the Welcome Drink. As far as the claim of the
claimant with respect to the Second Regular Meal is concerned, the
learned Single Judge held that the claim was barred by Doctrine of
Waiver, by observing as under:-

“73. For the said reasons, reliance upon
Clause 21.6 of the MLA cannot be made in this

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regard and the same has also been
erroneously relied upon by the Ld. Arbitrator.
The said clause reads as under:

“Unless otherwise expressly provided in this
Agreement, a delay or omission by either
Party to exercise any of its rights under this
Agreement will not be construed to be a
waiver thereof.”

74. The aforesaid clause covers those
situations where there is a legitimate right of a
party arising from the Agreement which has
been hampered. In the present case, given the
contractual terms between the parties and the
guidelines which were in force, BFP had no
legitimate right to make its claim. The
Arbitrator’s reliance upon the representations
of2015-2016 and the writ proceedings
instituted in 2017 to state that this was not a
case of waiver is perverse since it is in blatant
ignorance of the binding contractual terms
between the parties. He has failed to consider
that this was not a right which the respondent
had in the first place.

75. Further, and importantly, for almost one
and a half years i.e. from the commencement
of services in 21.01.2014 till 22.05.2015 when
the first representation was made by the
Indian Railway Mobile Catering Association
to the General Manager of Northern Railway,
no objection as raised by the respondent
regarding the change in apportionment
charges. During this period, the respondent
continued to raise bills in accordance with the
commercial circulars and continued to receive
payments without any demur/protest or
reservation. For the sake of repetition,
circulars were issued in 2013, LOA was issued
in 2014 and the MLA was entered into in 2014,
however, till 22.05.2015 there was no protest
by the respondent.

76. The respondent has not been able to
explain that why for a period of 1.5 years the
respondent was providing two Regular Meals

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and was charging for the second Regular Meal
at Combo Meal tariff. The Arbitrator’s finding
that the bills were raised under duress,
coercion and because the respondent was in a
financially precarious situation is not
supported by any evidence. The Arbitrator has
erred in holding that because the petitioner
had a dominant position in the contract, the
respondent could not have easily surrendered
the contract and had no other choice but to
raise the bills and receive payments as per the
commercial circulars. These are bald
assumptions without any evidence to support
the same.

77. The Arbitrator has merely considered the
pleadings of the respondent in the SOC that
the payments would have stopped had they not
raised the bills in accordance with commercial
circulars, and has held that “I have no
reasons to disbelieve them”. He has, thus,
based his reasoning on mere surmises and
conjectures, and has observed that since
significant amounts are sought, the respondent
must have incurred huge losses. There is
nothing on record to show the financial
investment made by the respondent, or that the
petitioner was not ready to accept the bills
which did not comply with CC 67/2013 and
CC 32/2014.

78. Before the Arbitrator, the respondent
sought reimbursement at the rates specified in
CC 63/2013 for supplying a second Regular
Meal, which it was supplying at Combo Meal
tariff as per CC 67/2013 and CC32/2014. I am
of the view that the Ld. Arbitrator failed to
give due consideration to the fact that the
respondent cannot claim benefit under CC
63/2013 and in the same breath seek to resile
from CC 67/2013 on the ground of it being
inequitable. The Arbitrator failed to notice
that BFP could not have cherry-picked which
guidelines/circulars of the petitioner they
wanted to follow and which favoured them.

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79. The Arbitrator has considered various
hypothetical situations, but has failed to
consider a situation where a contracting party
enters into a contract with another party,
executes the contract, receives the payments as
per the contractual terms, and thereafter
challenges the same on the plea of equity and
on the ground that the other party enjoyed a
superior and dominant position in the
contract. This interpretation adopted by the
Arbitrator is tantamount to making the
objective of the Indian Contract Act (“ICA”)
redundant, which gives legal enforceability to
validly executed contracts, making the terms
binding between the parties. The essence of
ICA is to ensure that agreements between
parties are enforced and are binding between
them.

*****

81. The Arbitrator’s reasoning, while seeks
to achieve an equitable outcome, completely
ignores contractual terms which permitted the
petitioner to change the tariff.

82. Hence, in a nutshell, I am of the view
that the doctrine of waiver is irrelevant in the
present case as, once BFP entered into the
contract with the petitioner, it did not have any
right to seek reimbursement of price difference
for providing the Second Meal as per the
charges stipulated in CC 63/2013. The
conduct of the respondent, however, falls
squarely within the definition of “estoppel”.
The respondent signed the contract, which
permitted the petitioner to change the tariff,
the respondent acted upon the changed tariff
introduced vide the commercial circulars
namely CC 63/2013, CC 67/2013 and CC
32/2014, raised bills upon the changed tariff,
accepted payments pursuant to those bills
without demur or protest and only after 1.5
years, issued a letter of protest.”

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84. On the contrary, the learned Single Judge found no infirmity
with the finding of the learned Sole Arbitrator on the issue of waiver
as far as the claim for the Welcome Drink is concerned. The learned
Single Judge in that regard observed as under:-

“87. Under this claim, the question is not of
inadequate reimbursement, but rather of no
reimbursement which is the point of difference.
Such an interpretation falls foul of ethos of the
ICA in as much as it lacks a very necessary
ingredient which forms a valid and binding
contract. As per Section 10 of ICA, a valid
contract is one which is a) made by the free
consent of parties; b) made by parties which
are competent to contract; c) for a lawful
consideration; d) with a lawful object. While
the lawful object i.e. to provide Welcome
Drink, exists; the element of lawful
consideration is absent.

88. A contract and a contractual provision
cannot, in my view, override the objective of
law and purport an illegal outcome. This is a
situation where Clause 21.6 of the MLA
clearly applies, since BFP had a legitimate
right arising out of the contract. The
Arbitrator’s reasoning that the same could not
have been waived off merely because BFP was
raising bills and getting paid for it, is a
plausible and reasonable finding. His
observations in paragraph 105 of the
Impugned Award that “merely because a party
is unhappy with certain actions of the other
contracting party, it is not necessary that it
must always surrender or opt out of the
contract as the aggrieved can always take
legal recourse to enforce its rights under the
contract” also stand under this claim. Hence,
to this extent I find no infirmity with the
reasoning of the Ld. Arbitrator.”

85. In our view, the learned Single Judge has, in fact, given

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contradictory findings on the issue of waiver. The fact situation in
both the claims was almost identical. The claimant had not raised a
claim for the Second Regular Meal or the Welcome Drink in its bills
raised with the respondent for over a period of one and a half years.
This was pressed as a waiver by the respondent. The learned Sole
Arbitrator, as would be evident from the above, held that the
respondent was in a dominant position and, therefore, believed the
claim of the claimant that the respondent forced the claimant not to
raise the bills, which would include the additional amounts for the
Second Regular Meals and for the Welcome Drinks. The learned Sole
Arbitrator also relied upon Clause 21.6 of the MLA to hold that
merely not raising of the bills would not be considered as a waiver of
the claim.

86. While the learned Single Judge cannot be faulted in his finding
that a plea of economic duress cannot be accepted on mere pleadings
and without any evidence, at the same time, the learned Sole
Arbitrator had inferred the same from the various facts, including the
fact that the licence fee had been paid by the claimant in advance; the
claimant had also paid the security deposit in advance; and the return
was only in form of payments regularly received from the respondent
against the regular monthly bills. The learned Sole Arbitrator is
entitled to draw his inferences from the facts proved before it. The
scope of jurisdiction under Section 34 of the A&C Act cannot extend
to the merits of the inference so drawn. It is only where the inference
has been drawn completely without evidence or contrary to the

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express terms of the contract or the evidence led by the parties, and
where no reasonable person could have drawn such an inference, that
an interference with the Arbitral Award may be warranted. The
present was not such a case.

87. We also appreciate the submission of the learned Solicitor
General that by not raising the bills, the claimant denied an
opportunity to the respondent to charge the same from the passengers,
however, this itself cannot be a ground to reject a legitimate and legal
claim of the claimant arising out of the MLA and the Circulars issued
by the respondent. The respondent itself should have rectified its stand
at least when the first representation in this regard had been received
by it. Even otherwise, the claimant has not been granted the claim for
the entire period because of the question of limitation that we shall
deal with in the subsequent part of our judgment.

88. The question of estoppel also does not arise given the terms of
the MLA and the Circulars, as have been interpreted by the learned
Sole Arbitrator and with which we see no reason to disagree. The
finding of the learned Single Judge that by signing the MLA, the
claimant is estopped from maintaining a claim for the Second Regular
Meal, cannot be accepted. As noted by us herein above, the said
finding of the learned Single Judge is based on the finding that the
MLA provided that though the claimant shall supply the Second
Regular Meal, but shall be paid only for a Combo Meal. We have
already held that this finding of the learned Single Judge and his
interference with the interpretation placed by the learned Sole

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Arbitrator on the terms of the MLA, cannot be sustained.
Consequently, the finding of the learned Single Judge on application
of the principle of estoppel is also not sustainable in law.

Issue of limitation

89. The learned Solicitor General has further challenged the finding
of the learned Sole Arbitrator, as upheld by the learned Single Judge,
on the issue of limitation. He has submitted that the learned Sole
Arbitrator has wrongly extended the benefit of Section 14 of the
Limitation Act to the claimant and extended the period of limitation.

90. We are unable to agree with the submission made of the learned
Solicitor General. Admittedly, the petitioner had invoked the writ
jurisdiction of this Court by filing a petition under Article 226 of the
Constitution of India, being W.P.(C) 11548/2017, praying for the
following reliefs:

“A. Issue an appropriate writ, order or
directions quashing the impugned circular
bearing Commercial Circular No. 67 of 2013
dated 23-10-2013 and Commercial Circular
No. 32 of 2014 dated 6-08-2014 issued by the
Respondent; and
B. Issue an appropriate writ, order or
direction commanding the Respondent to
refund an amount of Rs. 7,82,49,945.00/-
incurred by the Petitioner for providing
regular meal at the price of combo meal from
17.10.2013 to 30.11.2017 along with 18%
interest from the date when the amount
became due and payable; and / or
C. Issue a writ, rule, order or direction in the
nature of Mandamus directing the Respondent
to refund an amount of Rs. 1,80,57,132.42

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along with 18% interest from the date when
the amount became due and payable incurred
by the Petitioner for providing Welcome Drink
from 01.08.2014 to 30.11.2017.”

91. This Court, by its Judgment dated 23.09.2019, dismissed the
said Writ Petition, however, granted liberty to the claimant to invoke
the Arbitration Agreement between the parties. Once such liberty is
granted, in our view, the claimant had rightly been extended the
benefit of Section 14 of the Limitation Act, which reads as under:-

“14. Exclusion of time of proceeding bona
fide in court without jurisdiction.–(1) In
computing the period of limitation for any suit
the time during which the plaintiff has been
prosecuting with due diligence another civil
proceeding, whether in a court of first instance
or of appeal or revision, against the defendant
shall be excluded, where the proceeding
relates to the same matter in issue and is
prosecuted in good faith in a court which,
from defect of jurisdiction or other cause of a
like nature, is unable to entertain it.

(2) In computing the period of limitation
for any application, the time during which the
applicant has been prosecuting with due
diligence another civil proceeding, whether in
a court of first instance or of appeal or
revision, against the same party for the same
relief shall be excluded, where such
proceeding is prosecuted in good faith in a
court which, from defect of jurisdiction or
other cause of a like nature, is unable to
entertain it.

(3) Notwithstanding anything contained
in rule 2 of Order XXIII of the Code of Civil
Procedure, 1908 (5 of 1908), the provisions of
sub-section (1) shall apply in relation to a
fresh suit instituted on permission granted by
the court under rule 1 of that Order, where
such permission is granted on the ground that

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the first suit must fail by reason of a defect in
the jurisdiction of the court or other cause of a
like nature.”

92. As far as computation of the benefit is concerned, the learned
Sole Arbitrator has again given reasons for determining the same as
January 2015, by observing as under:-

“84. However, I agree with the submission of
Mr. Bishnoi that the Claimant are entitled to
seek exclusion of the time period spent by them
in prosecuting the writ petitions before the
Delhi High Court.

*****

89. ….It is not denied that the writ petitions
were filed in December, 2017. Though, the
writ petition is dated 19.12.2017 but the first
order of the Court in the writ petition is dated
22.12.2017 which is filed at Page No. 778 of
Common Convenience Compilation, Volume-
III. Thus, there can be no dispute about
initiation of the writ proceedings on
22.12.2017. As examined by me earlier, the
proceedings in the High Court came to an end
by order dated 23.09.2019, a certified copy of
which was received by the Claimant on
16.01.2020. Thus, it is reasonable to assume
that the Claimant did spend time between
22.12.2017 till 16.01.2020 to prosecute their
writ petitions.

90. The next question arises as to whether the
Claimant are entitled to seek exclusion of time
spent in the High Court in terms of Section 14
of the Limitation Act, 1963. I am conscious
that Section 14 provides for exclusion of time
spent by a party which is sincerely and
bonafidely pursuing a remedy in another civil
court of defective jurisdiction. However, this
issue need not detain me as the Hon’ble
Supreme Court has squarely answered the
same in affirmative in one of the judgments
cited by the Claimant.

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91. Before noticing the Supreme Court
judgment, I may indicate that the Claimant
had filed writ petitions wherein prayers, inter-
alia, were also made for recovery of monies
due to them on accounts of the two services
claimed herein. The Delhi High Court, in its
judgment dated 23.09.2019 also found in Para
16 that what the petitioner was claiming is
purely a money claim arising out of
contractual obligation and that there are no
issues of public law character raised in the
present case. Thereafter, the Delhi High Court
granted liberty to the Petitioners (Claimant
herein) to take steps for appointment of an
Arbitrator to look into the grievance of the
Petitioner. The Court further ordered that in
case such arbitration proceedings are
initiated, the Ld. Arbitrator may adjudicate the
disputes raised by the Petitioner uninfluenced
by any observations made by this Court.

92. So, from reading of the judgment dated
23.09.2019 of the Delhi High Court, it is clear
that the Court did not find the writ remedy to
be an appropriate remedy and thus, relegated
the Claimant to approach appropriate forum
in the shape of taking steps for appointment of
an Arbitrator.

93. Whether in the factual scenario
highlighted above, the Claimant is entitled to
seek benefit of Section 14 of the Limitation
Act, 1963, has been dealt with by the Supreme
Court in a similar situation in Rameshwar Lal
v. Municipal Council, Tonk & Ors. (1996) 6
SCC 100. In this case, the Supreme Court held
that the party was entitled to the relief of
exclusion of time period spent in the High
Court during which it was pursuing its writ
petitions diligently and in a bona fide manner.
The Hon’ble Supreme Court, being conscious
of the language used in Section 14, yet granted
this benefit to the party after finding that the
High Court had declined to grant relief to the

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party by relegating the petitioner to a suit in a
Civil Court and in such situation, the
Petitioner cannot be left remediless. The
Supreme Court excluded the time period spent
in the High Court in prosecuting the writ
petitions and further directed the Trial Court
to dispose of the matter in accordance with
law on merits.

94. Thus, applying the ratio of the aforesaid
judgment, I agree that the Claimant are
entitled to seek exclusion of time period spent
in the High Court between 22.12.2017 and till
16.01.2020. There is nothing on record to
suggest that the Claimant were not bona fide
or diligent in pursuing the writ remedy.

Though, the Claimant have cited other
decisions as well but I don’t feel the need to
notice all of them given the fact that the
Supreme Court judgment is clear and direct.

95. Admittedly, the Claimant invoked the
arbitration clause on 24.01.2020 and by virtue
of Section 21 of the Arbitration and
Conciliation Act, 1996, the arbitration
proceeding is deemed to have commenced on
the said date. If the time period before the
High Court is excluded, the claim can be said
to have been instituted in around January,
2018. Given the fact that some time is required
to make payment against the bills raised from
January, 2018, I hold that the amounts
claimed by the Claimant three years prior to
January, 2018 i.e. from January, 2015
onwards would be within the period of
limitation and all amounts claimed prior to the
said period would be barred by limitation.

Thus, I partly agree with the preliminary
objection raised by the Respondent and hold
that the Claimant are not entitled to seek
recovery of amounts prior to January, 2015.”

93. We, therefore, do not find any merit in the above challenge of
the respondent.

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94. The reliance of the learned Solicitor General on the judgment of
this Court in Niyogi Offset Printing Press Limited (Supra), cannot be
accepted to deny the relief of Section 14 of the Limitation Act to the
claimant inasmuch as, the said case was considering whether the
benefit of a winding up petition can be granted for extending the
benefit of Section 14 of the Limitation Act. The Court held that
though a Company Petition for winding up may result in the petitioner
getting the amount due to him or some amount on pro rata basis, it
does not necessarily mean that the matter in issue will be the same as
in a suit for recovery of amount, had it been filed. In the present case,
as noted hereinabove, the claimant had claimed the amounts due to it
in the Writ Petition filed by it. This Court while dismissing the writ
petition had also granted liberty to the claimant to invoke the
Arbitration Agreement. Therefore, the above judgment would not
apply to the facts of the present case. To the contrary, the learned Sole
Arbitrator has rightly placed reliance on the judgment of the Supreme
Court in Rameshwarlal (Supra), wherein the Supreme Court held as
under:-

“3. Normally for application of Section 14,
the court dealing with the matter in the first
instance, which is the subject of the issue in
the later case, must be found to have lack of
jurisdiction or other cause of like nature to
entertain the matter. However, since the High
Court expressly declined to grant relief
relegating the petitioner to a suit in the civil
court, the petitioner cannot be left remediless.
Accordingly, the time taken in prosecuting the
proceedings before the High Court and this
Court, obviously pursued diligently and bona

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fide, needs to be excluded. The petitioner is
permitted to issue notice to the Municipality
within four weeks from today. After expiry
thereof, he could file suit within two months
thereafter. The trial court would consider and
dispose of the matter in accordance with law
on merits.”

95. The reliance of the learned Solicitor General on the judgments
of the Supreme Court in Raja Ram Maize Products (Supra), and on
Nortel Networks India Pvt. Ltd. (Supra), also cannot be accepted as
the claimant has not been granted an extension of period of limitation
by the learned Sole Arbitrator on basis of the representations made by
the claimant. The learned Sole Arbitrator has determined that the
cause of action for filling the claim would not arise from the circular
dated 23.10.2013 or the execution of the MLA, but would arise
month-to-month and every month that the claimant was not paid the
charges for the Second Regular Meal or the Welcome Drinks. Once it
is held that the circular dated 23.10.2013 or the MLA did not deny the
right of the claimant to claim the above amounts, the finding of the
learned Sole Arbitrator that the claim would arise on a month-to-
month basis cannot be faulted. Even otherwise, limitation is a mix
question of facts and law. Only because an Arbitrator makes an error
in determination of a fact or of law, would not warrant an interference
by the Court under Section 34 of the A&C Act, unless it is shown that
the finding of the Arbitrator is perverse or against the public policy of
India. We do not find such a case to be made out in the facts of the
present appeals.

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Computation of quantum of claim

96. The learned Solicitor General has further submitted that the
learned Sole Arbitrator has erred in the determination of the quantum
of claim of the claimant on both the above claims. He submits that the
claimant had not produced any evidence in support of the
quantification of its claims, and the learned Sole Arbitrator has erred
in law in placing a reverse burden of this claim on the respondent by
calling the respondent to disprove it.

97. We are unable to agree with the submission made by the
learned Solicitor General. The learned Sole Arbitrator, on the issue of
determination of the quantum of the claim of the claimant, has
observed as under:-

“140. The next question which arises is as to
whether the Claimant have adequately proved
the claim computations. For this purpose, a
scrutiny of the pleading as well as evidence is
required to be done closely. In the lead case,
in Para 47, the Claimant have given the
number of regular meals supplied in AC-
I/II/III. Similarly, in Para 49 it has specified
the amounts due and payable to it towards
Welcome Drink. The month wise number of
regular meals and Welcome Drinks have
further been specified in the charts annexed to
the certificate of the Chartered Accountant in
Vol.C-3 in all cases. A perusal of charts in all
the cases show that number of meal and
Welcome Drink supplied each month wise for
the various years have been specified and
these numbers have then been multiplied with
the differential rate, with regard to first claim
and with the rate of the Welcome Drink for
second set of claims. Thus, it is clear that the

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Claimant have set out the numbers of the
services rendered by it before this Tribunal.
The Respondent, in its defense, has denied the
same though no other contrary figures have
been set up.

141. Though the Ld. Counsel for the
Respondent is right in submitting that the
Claimant are required to be prove their own
case and onus lies on them, but in a case like
the present one wherein the Claimant have
discharged the initial burden by providing a
quantification drawn from the bills, the
originals of which are with the Respondent,
the burden would then shift on the Respondent
to prove that it is wrong. Such a plea may have
some weight in favor of a party which is not
having possession of the relevant record and
documents but not in present case.

142. From the Affidavit of CW-1, the
Chartered Accountant filed by the Claimant, it
is clear that he has set out the claim amounts
in Para 16. The same computation is also filed
along with the SOC by way of a certificate of
the same Chartered Accountant along with
which, detail charts have been annexed
wherein services, namely, number of Regular
Meals as well as Welcome Drinks supplied
each month wise for the various years in
question, have been specified. These figures
have though been denied as part of the general
denial in the pleadings but given the fact that
the Claimant have made supplies of the
services in terms of the Commercial Circulars,
then, the only question can be with regard to
the numbers. In such a situation, since the
Respondent has not given any contrary figure
of the numbers of Regular Meal and Welcome
Drinks supplied and in absence of contrary
evidence, the Tribunal is inclined to accept the
amounts computed by the Claimant.

*****

156. One more contention of the Respondent
which requires to be noticed is that it

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contends, by relying upon CC-32 of 2014 that
the Welcome Drinks were to be supplied with a
rider that whenever breakfast is followed
immediately after the Welcome Drink, then
fruity/tetra pack to be provided along with the
breakfast were not required to be served. It
states in its written submission that, thus, the
said circular neutralized the effect of the
service of Welcome Drinks. I may note that
this plea has been taken vaguely without
giving supporting factual details, particulars
and evidence. It is not clear as to how,
according to Respondent, it neutralizes the
effect of service of welcome without explaining
the number of Welcome Drinks in each train
and also the breakfasts and the comparative
cost analysis. From the averments made in
para 30 of the written submissions wherein it
is averred that “even otherwise, all the
Shatabdi trains start in the morning followed
by breakfast” shows that this situation does
not arise in all the trains. This plea being
factual should have been established by
producing on record the facts and figures. The
Respondent was required not only to plead the
necessary facts but also prove the same by
adducing evidence with regard to the numbers
of breakfasts as well as the comparative cost.
The Claimant, on the other hand in their
written submission has taken the plea that they
had supplied the Welcome Drink to all the
passengers to avoid complaints as the
commuters are unaware of these internal
circulars. It may be pointed out that the
written submission by the Respondent has been
filed much after that of the Claimant. Be that
as it may, I find that the Respondent has
chosen not to plead set off or counter-claim
and in absence thereof the supporting evidence
with full details and particulars, this
contention about neutralizing the effect of
service of Welcome Drink, cannot be
accepted.”

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98. In the present case, admittedly, the bills of the claimant were
being paid on the basis of the Occupancy Certificate. The bills as far
as the claim of the Combo Meal is concerned, were, therefore, duly
paid by the respondent. The only difference now is that instead of a
Combo Meal, the claimant claims to have served a Second Regular
Meal to the passengers. The number of passengers who have been
served this Second Regular Meal, therefore, stands accepted by the
respondent. It is not the case of the respondent that though the
claimant is claiming to have served a Second Regular Meal to the
passengers, it instead, served a Combo Meal. The rates of the Regular
Meal, as has already been held by us hereinabove, are to be
determined by the Circular dated 09.10.2013. The claimant, in support
of its claim has also produced its Chartered Accountant, Mr.Jeetmal
Khandelwal (CW-1), whose testimony has been rightly relied upon by
the learned Sole Arbitrator by invoking Section 65(g) of the Indian
Evidence Act. These, in any case, are matters of evidence and the
appreciation thereof, with which the Courts generally do not interfere
in exercise of their powers under Section 34 of the A&C Act. It cannot
be said that there was no evidence at all before the learned Sole
Arbitrator for allowing the claim of the claimant.

99. The above also applies to the Welcome Drinks, where the rates
that have been taken by the claimant, though have not been expressly
determined by any of the Commercial Circulars issued by the Indian
Railways or by the respondent herein, on basis of the charges

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applicable to the service of tea to the passengers. We do not find any
infirmity in the same.

100. Admittedly, the concept of Welcome Drink came to be
introduced by the respondent post the signing of the MLA, vide
Circular dated 06.08.2014. There was no stipulation in the
Commercial Circulars prohibiting the payment for the Welcome
Drink. Clause 1.3 of the Tender Document, or Clause 1.4 or Clause
8.1 of the MLA also cannot be read to prohibit the payment of a new
food/drink item being introduced in the menu.

101. Therefore, the learned Sole Arbitrator as also the learned Single
Judge rightly allowed the said claim of the claimant. The plea of the
respondent that it was entitled to a set-off inasmuch as a drink was
reduced from the breakfast menu which was to follow, in the absence
of any pleading or proof thereof, was also rightly rejected by the
learned Sole Arbitrator. In any case, this would have been a matter of
evidence and in absence thereof, could not have been invoked by the
learned Sole Arbitrator to reject or reduce the claim of the claimant.

Interest

102. As noted hereinabove, the learned Solicitor General has
submitted that from the claim made in the Execution Petition filed by
the respondent seeking enforcement of the Arbitral Award, it would be
evident that the learned Sole Arbitrator has awarded interest on the
total sum awarded with effect from 01.01.2018 though the amount
would become due in instalments with each bill, which were raised at

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the interval of ten days, that is, three bills a month subsequent to
01.01.2018.

103. The Arbitrator, in the Impugned Award, has awarded a sum of
Rs.20,97,85,202/- as principal amount towards the claim of recovery
of differential cost for the supply of Second Regular Meal and
Rs.5,04,99,122/- towards supply of Welcome Drink. The Arbitrator
then proceeds to award interest on the principal amount by observing
as under:-

“161. Section 31 (7) of the Arbitration and
Conciliation Act, 1996 provides that the
Arbitral Tribunal can award interest at such
reasonable rate on the whole or any part of
the money for the whole or any part of the
period between the date on which the cause of
action arose and the date on which the award
is made. In the present case, I have held that
the claim amounts from January, 2015 are
within time period of prescribed limitation by
applying Section 14 to exclude the time period
spent in the High Court by the Claimant in
prosecuting their writ petitions. The Claimant
have not pointed out any contractual
provisions providing for rate of interest for the
amounts payable under the Master License
Agreement. Considering the facts and
circumstances of the case and also the fact
that the Claimant initiated legal action for
recovery of the amounts only in December,
2017 for the first time, I deem it fit to award
interest on the principal amounts payable only
from January, 2018 onwards @ 6% simple
rate of interest per annum. Thus, the Claimant
will not be entitled for interest prior to the said
period.

162. The Respondent is given a period of four
months from date of award to pay the awarded
amounts towards principal as well as interest

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component as specified above. However, in
case the amounts are not paid within a period
of four months from the date of award, the
Claimant shall be entitled to future simple
interest @ 9% per annum in terms of Section
31 (7) (b) of the Arbitration and Conciliation
Act, 1996 on the total sum comprising of
principal as well as interest amounts as
awarded abovefrom the date of award till the
date of actual payment.”

104. It cannot be disputed by the respondent that the above principal
amount comprises of bills that are raised on regular intervals, which,
as the learned Solicitor General submitted, was after every ten days.
The entire principal amount, therefore, did not become due and
payable as on 01.01.2018. The amount of principal would keep on
increasing with the period of each subsequent bill and the billing
period. Similarly, interest would have to be calculated on the principal
that was payable on a given date.

105. Section 31(7) of the A&C Act reads as under:-

“Section 31. Form and contents of arbitral
award.

(7) (a) Unless otherwise agreed by the parties,
where and in so far as an arbitral award is for
the payment of money, the arbitral tribunal
may include in the sum for which the award is
made interest, at such rate as it deems
reasonable, on the whole or any part of the
money, for the whole or any part of the period
between the date on which the cause of action
arose and the date on which the award is
made.

(b) A sum directed to be paid by an arbitral
award shall, unless the award otherwise
directs, carry interest at the rate of two per

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cent. higher than the current rate of interest
prevalent on the date of award, from the date
of award to the date of payment.”

106. While there can be no doubt that unless otherwise agreed by the
parties, the Arbitral Tribunal may, include in the sum for which the
Award is made, interest at such rate as it deems reasonable, on the
whole or any part of the money, for the whole or any part of the period
between the date on which the cause of action arose or on the date on
which the Award is made, such discretion cannot be exercised
arbitrally. The cause of action for each bill/billing period shall arise
separately and therefore, the cause of action for the principal amount
due towards the bills that were raised post 01.01.2018 or relate to the
billing period post 01.01.2018 would arise only post the said date. The
amount would become due also post the said date. The Arbitrator,
therefore, had no jurisdiction under Section 31(7) of the A&C Act to
award interest on the amount which was not even due as on a
particular date and for which no cause of action had arisen as on that
date. As this Court does not have the power to modify the Arbitral
Award, the Award to this extent, being contrary to the A&C Act itself,
is, therefore, patently illegal and is set aside.

Conclusion:

107. In view of the above findings, we partially set aside the
Impugned Order dated 13.08.2024 of the learned Single Judge, as
under:-

(a) The Impugned Order in so far as it sets aside the Arbitral

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Award qua the claim of the claimant for the Second Regular
Meal supplied by the claimant, is sets aside and the Arbitral
Award is restored;

(b) The Arbitral Award in so far as it awards interest on the
principal amount in favour of the claimant, is set aside;

(c) We affirm the Impugned Order dated 13.08.2024 of the
learned Single Judge and the Award dated 27.04.2022 of the
learned Sole Arbitrator qua the Claim for Welcome Drinks.

108. The appeals are disposed of in the above terms. The parties
shall bear their own costs.

NAVIN CHAWLA, J

SHALINDER KAUR, J
FEBRUARY 10, 2025/rv/VS/SJ
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Author: Navin Chawla

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