Facts
The Petitioner (IRCTC) challenged an Arbitral Award dated 28.08.2023.
Source reference: p. 1, para 1The Respondent (Foodworld), a caterer, was awarded Rs. 2,30,40,995/- plus 12% interest for claims regarding the price difference between "combo meals" and "regular meals," and reimbursement for "welcome drinks".
Source reference: p. 1-2, para 2The dispute arose from Railway Board Circulars issued in 2013-2014, which introduced combo meals at lower tariffs but later restored regular meals while maintaining the lower combo meal price.
Source reference: p. 9-15The Petitioner contended that the Respondent had agreed to these terms and that the issue was covered by Supreme Court precedent.
Source reference: p. 2, para 3Issues
1. Whether the Arbitral Tribunal exceeded its jurisdiction by awarding claims that were contrary to binding Railway Board policy circulars and the express terms of the contract.
Source reference: p. 2-52. Whether the controversy is squarely governed and resolved by the Supreme Court’s decision in IRCTC v. Brandavan Food Products.
Source reference: p. 2, para 4Law Applied
Section 34 of the Arbitration and Conciliation Act, 1996, specifically the grounds of "patent illegality" under Section 34(2A) and "conflict with public policy" under Section 34(2)(b)(ii).
Source reference: p. 4-5, para 14-15The principle from OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd. that disregarding a binding judgment of a superior court constitutes a violation of the fundamental policy of Indian law.
Source reference: p. 5-7, para 16The ratio from IRCTC v. Brandavan Food Products (2025 SCC OnLine SC 2369), which held that caterers/licensees are bound by Railway Board policy decisions regarding tariffs and menus, and arbitrators cannot rewrite contracts to grant relief in contravention of such policies.
Source reference: p. 9-24Reasoning
The Court found the facts of the present case to be "substantially similar and materially akin" to the Brandavan case.
Source reference: p. 3, para 7; p. 27, para 22The Supreme Court in Brandavan had already determined that while the disparity between regular meal service and combo meal tariff appeared arbitrary, it was a binding policy decision that the caterers accepted by entering into the Master License Agreement (MLA).
Source reference: p. 20, para 57The High Court noted that the Arbitrator in the present case adopted the same reasoning—granting parity of tariff—which the Supreme Court explicitly rejected as "patent illegality".
Source reference: p. 28, para 23-25The Court dismissed the Respondent's attempts to distinguish the case based on specific tender clauses (e.g., Clause 3.5.4), holding that the primacy of Railway Board circulars overrides individual contractual interpretations.
Source reference: p. 29-30, para 27-29the Award was found to be in "clear discordance" with the law as settled by the Apex Court.
Source reference: p. 30, para 31Holding
The Court held that the Impugned Award was patently illegal and in conflict with the public policy of India as it disregarded binding Supreme Court precedent and the governing policy framework.
The Petition was allowed, and the Arbitral Award dated 28.08.2023 was set aside in its entirety.
Source reference: p. 31, para 33-34Original Court PDF
Indian Railway Catering And Tourism Corporation LimitedvsFoodworld
Click to open original judgment
Original judgment, available to read, download and summarize on LawLens.in