Indian Railways Catering and Tourism Corp. Ltd. Vs Brandavan Food Products (Supreme Court of India)
Supreme Court Sets Aside Arbitral Award: Arbitrator Cannot Rewrite Catering Contract
The dispute arose from catering contracts awarded by IRCTC in 2013 for Rajdhani, Shatabdi & Duronto trains, where bidders had quoted on the basis of the 1999 catering tariff. During tender processing, the Railway Board first introduced a “combo meal” for the second service through Circular 63/2013 & then withdrew it within two weeks through Circular 67/2013, directing that full regular meals be restored “without any increase in charges.” As a result, caterers were required to serve a full second regular meal but continued to receive payment at the lower combo-meal rate. A welcome drink was also included for AC passengers, but no tariff was provided in the Master Licence Agreement.
The caterers claimed substantial financial loss & sought reimbursement of the differential between the regular-meal rate & combo-meal rate for the second meal, along with payment for welcome drinks supplied without compensation. The arbitral tribunal accepted these claims, holding that the caterers had acted under economic compulsion & were entitled to reimbursement with interest. While the Single Judge under Section 34 partially interfered & rejected the second-meal claim, the Division Bench under Section 37 restored the award almost entirely, holding that the arbitrator’s view was a plausible interpretation of the contract.
