Delhi District Court
Indian Railway Catering & Tourism ... vs M/S Deepak & Co on 26 February, 2021
In the Court of Shri Sanjiv Jain,
District Judge (Commercial Court)03, Patiala House Courts
New Delhi
OMP (Comm) No. 22/2020
Indian Railway Catering & Tourism Corporation Ltd (IRCTC)
B148, 11th Floor, Statesman House,
Barakhamba Road, New Delhi11001.
... Petitioner/objector
versus
M/s Deepak & Co.
A96, Chander Vihar,
Opp. Ramakrishna Apartments,
IP Extension, Patparganj,
Delhi110092
... Respondent/claimant
Date of institution : 11.02.2020 Date of reserving judgment : 30.01.2021 Date of decision : 26.02.2021 JUDGME NT
1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (as amended upto date) hereinafter called the 'Act' challenges the award dated 21.11.2019 passed by the Arbitrator Sh. P. S. Nerwal.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.1 of 38 Brief facts:
2. Briefly the facts as stated in the petition are that the petitioner had invited etender vide no. 2018/IRCTC/Catg./DCS/1204950 dated 19.07.2018 for providing on board catering services in Gatiman Express (Train No. 1204950) for a period of one year. The respondent participated in the tender and emerged as an highest bidder. It was awarded the license vide letter of award dated 01.08.2018. The respondent accepted the terms & conditions of the license and agreed to provide the catering services vide letter of acceptance dated 03.08.2018.
3. The respondent commenced the services and submitted the bills. As against the bills for the period from 16.08.2018 to 30.04.2019, the petitioner made the short payment of Rs.
62,21,041.37. The respondent objected to the short payment vide letter dated 27.08.2018 stating that it has been informed that catering charges payable are being revised downwards to Rs. 238.00 and Rs. 163.81 for BF & ET from the rates approved in the tender as Rs. 280.85 and Rs. 193.03 respectively. It pointed out that this unilateral action of the respondent is illegal, arbitrary and unsustainable since the tender conditions cannot be changed unilaterally and that the charges payable would remain the same as specified in the tender and not as per the revised rates. The petitioner did not respond to the letter. The respondent then wrote another letter dated 21.01.2019 OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.2 of 38 requesting the petitioner to release the balance payment within two weeks, failing which, it would be constrained to invoke the arbitration. It also requested to provide the reason for the lesser payment and the break up of the payment advice in respect of each bill. It was followed by a reminder dated 12.04.2019. When no reply came, the respondent invoked the arbitration clause requesting the petitioner to appoint an Arbitrator to adjudicate on the disputes / claims as regards the deductions made from the bills.
4. The petitioner then vide letter dated 14.06.2019 informed the respondent that in terms of 2.1 of the scope of work, the charges payable to the licensee shall be as per Annexure 'F' or as revised from time to time. The respondent then vide letter dated 17.06.2019 requested the petitioner to provide the copy of decision of Railways and to inform whether revision also includes revision in the menu / eatables to be served to the passengers. The petitioner replied to the letter and sent the copy of the revised apportionment charges stating that no change in the menu has been communicated by Railways to IRCTC. Only the tax component has been changed on account of change in GST tariff based on the directives of Ministry of Finance. It explained that the charges stated in Annexure 'F' were the composite charges inclusive of tax. Since the tax component has been changed, alteration has been done in the prices. It asked the respondent to submit its acceptance / rejection towards the revised apportionment charges by 27.06.2019. The respondent objected to the same alleging that no date is indicated by the petitioner as to OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.3 of 38 from which date the proposed revision was to take place, the petitioner has only enclosed the copy of a table with the heading "revised catering apportionment charges with GST @ 5%" and further, the decision was taken by the AFA / catering in April 2018.
5. The respondent then filed the petition under Section 11 of the Act and the High Court appointed Sh. P. S. Nerwal as the Sole Arbitrator.
6. The respondent filed the statement of claims before the Arbitrator. The petitioner in reply to the claims stated that the catering charges published in Annexure 'F' were not factored in the directions of the Ministry of Railways issued vide commercial circular no. 21 of 2018 dated 09.04.2018 and the revised charges came into effect only on 15.08.2018, when the petitioner was informed of it by the Ministry of Railways. It was stated that since the tender document was published in July 2018, the tariff could not be revised. The respondent was informed of the same at the time the letter of award was issued and it was acknowledged by the respondent in its letter dated 27.08.2018. It was thus open to the respondent to refuse to perform the catering services but it voluntarily proceeded to perform the services without any demur. It was stated that as per clause 2.14 of GCC, catering charges of the tariff could be varied from time to time. It was stated that no loss was caused to the respondent.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.4 of 38
7. The respondent filed its rejoinder disputing the contentions of the petitioner but admitted that it had deposited GST @ 5% with the Authority.
8. The Arbitrator vide impugned award allowed the claim of the respondent directing the petitioner to pay Rs. 62,21,041.37 along with interest @ 12% per annum w.e.f. 01.05.2019 till the actual date of payment.
Objections:
9. The petitioner challenged the award on the following grounds:
A) That the impugned award is contrary to clause 2.1 of the tender document. The Arbitrator ignored the clause of the contract which provided that the rates would be subject to revision by IRCTC from time to time. There was a clear stand of IRCTC that actual catering charges have not been reduced, only the tax component has been changed on account of reduction of GST tariff from 18% with ITC to 5% without ITC. The Arbitrator failed to appreciate that the directive issued by the Ministry of Finance, is binding on the parties. It is not the anybody's case that the IRCTC was unduly benefited from such a measure.
B) That the Arbitrator ignored clause 2.14 of the contract, which clearly states that IRCTC shall reimburse the amount after adjusting deduction of tax at source in respect of catering services, which includes revision of GST tariff.
That the catering charges provided in Annexure 'F' of the tender document were subject to revision from time to time, which the Arbitrator failed to appreciate. Thus, the approach of the Arbitrator in assuming that clause 2.14 could be revised only if the catering charges were increased is not only uncommon to common logic but also perverse.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.5 of 38 C) That the Arbitrator failed to appreciate that the commercial circular no. 21 of 2018 dated 09.04.2018 was implemented w.e.f. 15.08.2018 by Railways. Even though, it was in existence, it was not communicated to IRCTC till the actual date of implementation. That the apportionment charges as provided in Annexure 'F' were to be determined on the basis of catering charges decided by the Ministry of Railways and IRCTC had no role to play as to the determination. The respondent has not adduced any evidence that it had deposited GST @ 18%. It had only deposited GST @ 5%, however, the Arbitrator failed to take this into consideration.
D) That the Arbitrator did not correctly interpret Section 62 of the Contract Act. That the contract clearly vested unilateral power with IRCTC to alter the catering charges from time to time and such revision did not require any consent from the respondent as no obligatory duty was cast on it. The present contract was on partial unbundling model, where, the meals were required to be picked up from the nominated stations and it was not the obligation of the respondent to manufacture the food. The Arbitrator failed to appreciate the distinction between prepaid and postpaid trains, wherein price of meals is included in ticket price itself and charges are merely reimbursed to the licensee at the rates determined by Railways. The calculation of license fee is not contingent on the preparation of food by the licensee.
E) That the Arbitrator committed an error of law by failing to appreciate the principle of novation before applying the same. Section 62 of the Indian Contract Act has no application to the facts of this case. If the parties by contract have conferred unilateral power to act on a contracting party, the same cannot be questioned by the Arbitrator. The Arbitrator being the creature of contract has no jurisdiction to question the terms of the contract.
F) That the Arbitrator erred in granting 12% interest on the award, which is contrary to the provisions of the Interest Act, 1972.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.6 of 38
10. On getting the notice of the petition, the respondent chose not to file any reply.
Arguments and contentions
11. I have heard Ld. Counsel Sh. Nikhil Majithia for the petitioner and Sh. Naresh Thennai, Ld. Counsel for the respondent.
12. Ld. Counsel for the petitioner reiterated what has been stated in the petition. Ld. Counsel referred the tender conditions 1.6, 2.1, 2.3, 2.6, 2.7, 2.14, 2.28, 11.2, menu, segments and break up of the agreement and submitted that the respondent was awarded the license on 01.08.2018. When the tenders were invited, GST @ 18% was payable but when the license was granted, GST tariff reduced to 5%. The base rate remained the same and only the tax component changed. Ld. Counsel stated that the petitioner did not reduce the basic rate and had made the payment on the basis of the applicable GST tariff, which tariff was paid by the respondent to the authorities. Ld. Counsel stated that in terms of the agreement, the petitioner reserved its right to revise the rate from time to time. The contract clearly provided unilateral power to the petitioner, which the respondent before submitting the bill was well aware. Ld. Counsel stated that what the petitioner did was as per the guidelines and circulars issued by the Ministry of Finance and Ministry of Railways and the respondent cannot be allowed unjust enrichment. Ld. Counsel submitted that the Arbitrator ignored the terms & conditions of the contract and the guidelines and passed the OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.7 of 38 impugned award, which is not only perverse but also against the public policy. In support of his contentions, he referred the cases of Patel Engineering Ltd Vs. North Eastern Electric Power Corporation Ltd, SLP © D No. 595 of 2020, decided on 22.05.2020, M/s Brandavan Food Products & Anr Vs. Union of India & Ors, W.P. © No. 11548/2017, decided on 23.09.2019, Sasan Power Ltd Vs. North American Coal Corporation India Pvt Ltd, CA No. 8299 of 2016, decided on 24.08.2016, Lata Construction & Ors Vs. Rameshchandra Ramniklal Shah & Ors, CA No. 2418 of 1996, decided on 12.08.1999, Savita Dey Vs. Nageswar Majumdar & Ors, CA No. 3404 of 1993, decided on 26.09.1995, Collector of Central Excise, Ahmedabad Vs. Vikshara Trading & Investment (P) Ltd & Anr (2004) 13 SCC 49 and Babu Ram Vs. Indra Pal Singh, CA No. 2551 of 1977. Ld. Counsel stated that it has been clearly held in the case of Patel Engineering (supra) that the parties cannot be allowed unjust enrichment. Ld. Counsel stated that the petitioner never raised the issue of novation of contract but the Arbitrator held the act of the petitioner in reducing the GST as a novation of contract.
13. Ld. Counsel for the respondent per contra argued that the petition is not maintainable in the eyes of law, since, it does not meet the parameters laid down in Section 34 of the Act. Ld. Counsel referred the tender conditions 2.1, 2.3 and Annexure 'F' and stated that there was no mention in the contract that the rates would include GST @ 18% or 5%. When the tenders were invited, the rates of GST had already changed from 18% to 5% on the basis of which, the OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.8 of 38 respondent had submitted its bid. Ld. Counsel referred the circular issued by the Ministry of Railways stating that directives were given on 09.04.2018. The circular was in public domain and the petitioner had received the circular on 09.04.2018 itself. Ld. Counsel referred the noting at page 160 of the petition and stated that the noting was initiated on 16.03.2019 and completed on 16.04.2018. In April 2018, GST was 5% not 18%. Ld. Counsel stated that in terms of the contract, only the menu and rates could be revised not the GST. The petitioner had quoted the rates taking the GST @ 5%, which it had paid to the authority, so there is no question of unjust enrichment. Ld. Counsel stated that the Arbitrator has acted within the four corners of the contract and there is no illegality or perversity in the impugned award.
Adjudication/findings:
14. I have considered the submissions as above and gone through the impugned award and the relevant documents as well as the case laws (supra).
15. Section 34 of the Arbitration and Conciliation Act reads as under:
"34.Application for setting aside arbitral award (1)Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with subsection (2) and sub sec tion (3).
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.9 of 38 (2)An arbitral award may be set aside by the court only if
(a) the party making the application furnishes proof 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 in dication 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 contem plated by or not falling within the terms of the submis sion 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 submit ted, 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 accor dance with this Part; or
(b) the court finds that
(i) the subjectmatter of the dispute is not capable of settlement by arbitration under the law for the time be ing in force, or
(ii) the arbitral award is in conflict with the public pol icy of India.
Explanation I For the avoidance of any doubt, it is clar ified that an award is in conflict with the public policy of India only if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81."
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.10 of 38
ii) It is in contravention with the fundamental policy of Indian law;
iii) It is in conflict with the most basic notions of moral ity or justice.
ExplanationII For the avoidance of doubt, the test as to whether there is a contravention with the fundamen tal policy of Indian law shall not entail a review on the merits of the dispute.
[2 (A) 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.
16. Normally, the general principles are that the decision of the Arbitrator unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside even if the court as a court of law would come to a different conclusion on the same facts. The court cannot reappraise the evidence and it is not open to the court to sit in appeal over the conclusion of the arbitrator. It is not open to the court to set aside a finding of fact arrived at by the arbitrator and only grounds on which the award can be cancelled are those mentioned in the Arbitration Act. Where the arbitrator assigns cogent grounds and sufficient reasons and no error of law or miscon duct is cited, the award will not call for interference by the court in exercise of the power vested in it.
17. In the case of Hiedelberg Cement India Ltd Vs. The Indure Pvt Ltd, OMP (Comm) No. 413/2019 decided on 29.01.2020, it was OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.11 of 38 held that law of judicial review and interference in proceedings un der Section 34 of the Act is no more res integra. Reference of the case Associate Builders v/s Delhi Development Authority, (2015) 3 SCC 49 was made, where the Supreme Court has held as under: "19. When it came to construing the expression the pub lic policy of India contained in Section 34(2)(b)(ii) of the Arbitration Act, 1996, this Court in ONGC Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705: held: (SCC pp. 727 28 & 74445, paras 31 & 74)
31. Therefore, in our view, the phrase public policy of India used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied O.M.P. (COMM) 413/2019 Page 30 of 37 from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/deci sion is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term public policy in Renusagar case [Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644] it is required to be held that the award could be set aside if it is patently illegal.
The result would be award could be set aside if it is contrary to: (a) fundamental policy of Indian law; or (b) the interest of India; or (c) justice or morality, or (d) in addition, if it is patently illegal.
Illegality must go to the root of the matter and if the il legality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.12 of 38
74. In the result, it is held that: (A)(1) The court can set aside the arbitral award under Section 34(2) of the Act if the party making the application furnishes proof 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 in dication 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 contem plated by or not falling within the terms of the O.M.P. (COMM) 413/2019 Page 31 of 37 submission to arbi tration, or it contains decisions on matters beyond the scope of the submission to arbitration.
(2) The court may set aside the award:
(i)(a) if the composition of the Arbitral Tribunal was not in accordance with the agreement of the parties, (b) fail ing such agreement, the composition of the Arbitral Tri bunal was not in accordance with Part I of the Act,
(ii) if the arbitral procedure was not in accordance with:
(a) the agreement of the parties, or (b) failing such agreement, the arbitral procedure was not in accordance with Part I of the Act. However, exception for setting aside the award on the ground of composition of Arbi tral Tribunal or illegality of arbitral procedure is that the agreement should not be in conflict with the provisions of Part I of the Act from which parties cannot derogate.
(c) If the award passed by the Arbitral Tribunal is in contravention of the provisions of the Act or any other substantive law governing the parties or is against the terms of the contract.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.13 of 38 (3) The award could be set aside if it is against the pub lic policy of India, that is to say, if it is contrary to: (a) fundamental policy of Indian law; or (b) the interest of India; or (c) justice or morality; or (d) if it is patently il legal. (4) It could be challenged: (a) as provided under Section 13(5); and (b) Section 16(6) of the Act.......
44. It was held that in the recent judgments, the Supreme Court has once again reiterated the law related to the examina tion by a Court of an Award under Section 34 of the Act. In Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India Ltd. 2019 SCC OnLine SC 677, the Supreme Court has held as under:
35. What is clear, therefore, is that the expression public policy of India, whether contained in Section 34 or in Section 48, would now mean the fundamental policy of Indian law as explained in paragraphs 18 and 27 of As sociate Builders (supra), i.e., the fundamental policy of Indian law would be relegated to the Renusagar under standing of this expression. This would necessarily mean that the Western Geco (supra) expansion has been done away with. In short, Western Geco (supra), as ex plained in paragraphs 28 and 29 of Associate Builders (supra), would no longer obtain, as under the guise of interfering with an award on the ground that the arbitra tor has not adopted a judicial approach, the Court's in tervention would be on the merits of the award, which cannot be permitted post amendment. However, insofar as principles of natural justice are concerned, as con tained in Sections 18 and 34(2)(a)(iii) of the 1996 Act, these continue to be grounds of challenge of an award, as is contained in paragraph 30 of Associate Builders (supra).
36. It is important to notice that the ground for interfer ence insofar as it concerns interest of India has since OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.14 of 38 been deleted, and therefore, no longer obtains. Equally, the ground for interference on the basis that the award is in conflict with justice or morality is now to be under stood as a conflict with the most basic notions of moral ity or justice. This again would be in line with O.M.P. (COMM) 413/2019 Page 34 of 37 paragraphs 36 to 39 of Associate Builders (supra), as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground.
37. Thus, it is clear that public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as un derstood in paragraphs 18 and 27 of Associate Builders (supra), or secondly, that such award is against basic notions of justice or morality as understood in para graphs 36 to 39 of Associate Builders (supra). Explana tion 2 to Section 34(2)(b)(ii) and Explanation 2 to Sec tion 48(2)(b)(ii) was added by the Amendment Act only so that Western Geco (supra), as understood in Asso ciate Builders (supra), and paragraphs 28 and 29 in par ticular, is now done away with.
38. Insofar as domestic awards made in India are con cerned, an additional ground is now available under subsection (2A), added by the Amendment Act, 2015, to Section 34. Here, there must be patent illegality ap pearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within the funda mental policy of Indian law, namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the backdoor when it comes to setting aside an award on the ground of patent illegality.
39. Secondly, it is also made clear that reappreciation of evidence, which is what an appellate court is permit ted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award.
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40. To elucidate, paragraph 42.1 of Associate Builders (supra), namely, a mere contravention of the substan tive law of India, by itself, is no longer a ground avail able to set aside an arbitral award. Paragraph 42.2 of Associate Builders (supra), however, would remain, for if an arbitrator gives no reasons for an award and con travenes Section 31(3) of the 1996 Act, that would O.M.P. (COMM) 413/2019 Page 35 of 37 certainly amount to a patent illegality on the face of the award.
41. The change made in Section 28(3) by the Amend ment Act really follows what is stated in paragraphs 42.3 to 45 in Associate Builders (supra), namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator con strues the contract in a manner that no fairminded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take. Also, if the ar bitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of juris diction. This ground of challenge will now fall within the new ground added under Section 34(2A).
42. What is important to note is that a decision which is perverse, as understood in paragraphs 31 and 32 of As sociate Builders (supra), while no longer being a ground for challenge under public policy of India, would certainly amount to a patent illegality appearing on the face of the award. Thus, a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. Addi tionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterised as per verse.
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45. It was also observed that in Hindustan Construction Company Limited & Anr. Vs. Union of India & Ors., 2019 SCC OnLine SC 1520, the Apex Court has held as under:
55. Further, this Court has repeatedly held that an appli cation under Section 34 of the Arbitration Act, 1996is a summary proceeding not in the nature of a regular suit see Canara Nidhi Ltd. v. M. Shashikala 2019 SCC O.M.P. (COMM) 413/2019 Page 36 of 37 OnLine SC 1244 at paragraph 20. As a result, a court reviewing an arbitral award under Section 34 does not sit in appeal over the award, and if the view taken by the arbitrator is possible, no interference is called for - see Associated Construction v. pawanhans Helicopters Limited(2008) 16 SCC 128 at paragraph 17.
56. Also, as has been held in the recent decision Ssangyong Engineering & Construction Co. Ltd. v. NHAI 2019 SCC OnLine SC 677, after the 2015 Amendment Act, this Court cannot interfere with an ar bitral award on merits. "
18. In the case of Patel Engineering Ltd Vs. North Eastern Electric Power Corp Ltd, 2020 (7) SCC 167, it was observed that in paragraphs (39) & (40) of Ssangyong Engineering (supra), the Court reiterated paragraphs (42.2) & (42.3) of Associate Builders (supra), wherein, it was held that construction of the terms of a contract is primarily for Arbitrator to decide, unless the Arbitrator construes a contract in a manner, which no fair minded or reasonable person would take i.e. if a view taken by the arbitrator is not even a possible view to take. It was held that the ground of patent illegality is a ground available under the statute for setting aside a domestic OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.17 of 38 award, if the decision of the arbitrator is found to be perverse or so irrational that no reasonable person would have arrived at the same; or the construction of the contract is such that no fair or reasonable person would take or that the view of the arbitrator is not even a possible view.
19. In the backdrop of the above, let me now examine the objections against the impugned award agitated by Ld. counsel for petitioner, visavis the contentions of Ld. counsel for respondent, in support of the award.
20. A perusal of record shows that the petitioner had invited e tender for award of temporary license for on board catering services through partial unbundling of services mode for a period of one year for train no. 1204950, NZMJHS Gatiman Express vide no. 2018/IRCTC/Catg./DCS/204950 dated 19.07.2018 from the empanelled parties under categoryA with IRCTC. The etender contained the general information and scope of work. It is relevant to reproduce some of the clauses / conditions of the work.
2.1 Catering services menu & rates: ....... The sector wise catering services and rates applicable for passengers travelling between pair of stations were enclosed as Annexure 'F'. it was stated that the menu and the rates are subject to revision by IRCTC from time to time......
2.3 modification / improvement in menu: The menus given are prescribed minimum menu and can be modified / improved with the approval of IRCTC from time to time.
2.6 supply of packaged drinking water (Rail Neer): It is OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.18 of 38 mandatory for the licensee to served packaged drinking water 'Rail Neer' (1000 ml chilled during May, June & July and 500 ml during the rest of the year) to passengers on train as per the extant instruction issued by Railways / IRCTC or revised from time to time. The drinking water bottle should be served along with paper glass to the passengers. Cost of paper glass shall be borne by the licensee .....
2.7 rates for supply of Rail Neer: Rail Neer to the licensee will be provided by IRCTC at the following rates: (i) for 1000 ml. Bottle Rs. 10/ per bottle and for 500 ml bottle Rs. 6.50 at locations mentioned in clause 2.6. The above rates are subject to change from time to time as revised by IRCTC.
2.14 License fee & payment to the licensee: Payment for the on board catering services will be made by IRCTC to the licensee on the basis of the number of passenger served over different pair of stations at the rates indicated in Annexure 'F' or as revised from time to tiem. The licensee shall submit the bills periodically, as mutually agreed upon with IRCTC, along with certificate of the Train Supdt. IRCTC will retain the 15% towards license fee from the running bills of catering services and any other deduction of tax at source in respect of catering services.
Condition 6.9: All questions, disputes and or differences arising under or in connection with this agreement or in touching or relating to or concerning the construction, or affect of presents (excepts as to matters the decision whereof is otherwise herein before, expressly provided for) shall be referred to the sole arbitration of the officer / officers or persons nominated by the CMD/IRCTC whose decision in this regard shall be binding on the licensee.
Clause 9.1 provides arbitration in the event of any disputes or difference arising under these conditions of license or in connection with this license (except as to any matters, the decision of which is specifically provided for by these or the special conditions) the same will be resolved by Arbitration, as per the provision of 'The Arbitration & Conciliation Act, 1996.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.19 of 38 Clause 11.2 talks about payment of taxes / dues. It provides that the licensee will be liable for payment of all taxes / duties service tax and other liabilities in respect of the business.
21. The tender also provides General Conditions of License (SectionTwo). As per condition 1.1, the bidders were required to quote concession fee excluding service tax as applicable, for a period of one year. Successful bidder was required to deposit quoted concession fee for a period one year along with applicable service tax thereon, in advance, before start of work as advised by IRCTC.
22. The tender also contained the menu for catering services in 1204950, NZMAGC Gatiman Express as Annexure 'E'. It also contained Annexure 'F' i.e. Gatiman Express fare structure (AC chair car). Some of the extracts of Annexure 'F' are reproduced as under:
Pair of Km Basic Rsvn Super Total Fare Catering Total Round Station fare Fair fast fee of including fare off fare (A) (B) (C) (D) (E) C/D GST @ &E 5% NAM 187.14 453.85 40 45 538.65 565.79 193.3 759.09 760 AGC (AC Chair Car) NAM 187.14 1029.5 60 75 1164.5 1222.72 280.85 1503.57 1505 AGC (Exec.
Class)
23. A perusal of record shows that the respondent was awarded the license on 01.08.2018. It was asked to convey acceptance to the terms & conditions of the license and pay the concession fee of Rs.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.20 of 38 57,04,000/, GST @ 18% Rs. 10,26,720/ and security deposit Rs. 3,00,000/. The respondent conveyed its acceptance vide letter dated 03.08.2018 and deposited the concession fee along with GST and security through NEFT / RTGS. The respondent was awarded the license w.e.f. 16.08.2017 vide letter dated 03.08.2018.
24. Record shows that the respondent had submitted 50 bills for payment from 16.08.2018 to 30.04.2019 against which the petitioner made the short payment of Rs. 62,21,041.37. The respondent had objected to the same stating that it has been informed that the catering charges payable to licensee are being revised downwards to Rs. 238.00 and Rs. 163.81 for the BF and ET from the rates approved in the tender as Rs. 193.03 and Rs. 280.85 respectively. It pointed out that the unilateral action of the respondent is illegal, arbitrary and unsustainable because the tender conditions cannot be changed unilaterally and that the charges payable will remain the same as specified in the tender document and not as per the revised rates. This was followed by another letter dated 21.01.2019, whereby, the petitioner was requested to release the balance amount, inform the reasons for the lesser payment and provide the breakup of the payment advice in respect of each bill. It was followed by a reminder dated 12.04.2019. It is pertinent to note that the petitioner did not respond to those letters and instead advised the respondent vide letter dated 14.06.2019 inter alia as under:
"In accordance to the para 2.14 under Scope of Work of tender documents of the above train, the sector wise OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.21 of 38 services and charges payable to the licensee shall be as per Annexure F of the tender document or as revised from time to time. It is advised that the apportionment charges of the above train towards sector wise services have been revised by the Railways. In view of the above, it is advised to submit your acceptance / rejection towards the revised apportionment charges of the about train for further necessary action by this office within 3 days".
25. The respondent immediately replied to the letter on 17.06.2019 stating that before accepting / rejecting the proposal qua revision, it would like to look into the decision of the Railway Board. It also requested the petitioner to inform, if the revision also includes revision in the menu / eatables to be served to the passengers and services to be rendered by the licensee.
26. The petitioner replied to the letter vide dated 17.06.2019 and advised the following:
(i) copy of the revised apportionment charges is enclosed as Annexure.
(ii) No change in menu is communicated by Railways to IRCTC.
In view of the above, it is once again advised to submit your acceptance / rejection towards the revised apportionment charges of the above train by 27.06.2019 further necessary action by this office."
27. In the impugned award, the Arbitrator has referred the above letters and observed that no date was indicated by the petitioner as to from which date the proposed revision was to take place. It had enclosed a copy of the table with the heading "revised catering OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.22 of 38 apportionment charges @ 5 %, for train no. 1409/50 Gatiman Express". This appears to be an internal note of the Northern Railway, in which the apportionment charges were proposed to be revised. Although, it is not clear from where the note originated, yet from some dated signatures, it is seen that the note was initiated by some official on 16.03.2018 and signed by some other official on 14.04.2018, which was finally signed by AFA (catering) on 29.04.2018. He observed that the alleged decision was taken in April 2018 but it was communicated to the respondent on 25.06.2019 seeking the acceptance from August 2018 onwards. He noted that the tender was floated on 19.07.2018, the acceptance was conveyed on 03.08.2018, the services started on 16.08.2018 and this revision of rates, which was already in force in Railways in April 2018, was proposed by the petitioner in the month of June 2019 only i.e. towards the fag end of the contract because the contract was to expire on 15.08.2019.
28. No explanation came from the side of the petitioner, why the letters written by the respondent were not replied immediately, why the respondent was apprised of the revision of the rates at the fag end of the contract and why the necessity arose to call the acceptance / rejection from the respondent towards the revised apportionment charges by 27.06.2019. A conjoint reading of the terms & conditions of the contract would show that in case the menu to be served to the passenger is improved / modified, it will attract revision of charges payable to the licensee and with this objective OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.23 of 38 clause 2.1 empowered the petitioner to revise the menu and the charges. The petitioner could not change the charges payable to licensee without there being any change in the menu. It was only in the case of revision / improvement in menu, the charges could be revised. In the instant case, there was no change in the menu, so there could not have been any change in the rates. Clause 2.14 provides that the payment of on board catering services is to be made in accordance with the rates prescribed in Annexure 'F' and could be revised from time to time. The Clause does not provide that the rates could be revised unilaterally without any change in the menu.
29. In the instant case, the Arbitrator has considered the contentions of the parties, clause 2.1 of the scope of work and Annexure 'F' and observed that although the commercial circular no. 21 dated 09.04.2018 was already available before the tender was floated and finalized in August 2018, yet the petitioner / IRCTC did not incorporate the rates into the tender document. Had IRCTC been not aware of this circular, how could it argue that too after the finalization of the contract that the contractor was supposed to know the basis on which the rates were likely to be revised. Instead of taking necessary action before floating the tender and finalization of the contract, the petitioner resorted to the reduction from the bills even without sorting out the issue with the contractor. If the petitioner failed to incorporate these rates, it could have cancelled the proposal for floating the tender or could have taken a decision to OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.24 of 38 cancel the contract before it was finalized and executed. Nothing of this sort was done by the petitioner and it has been expecting from the respondent to know the internal regulations of the petitioner based on the circular dated 09.04.2018. He also noted that the maintenance of proper documentation was far from satisfactory in the office of the petitioner. It was the negligence on the part of the petitioner which led to this situation, which made it to revise the accepted / admitted rates immediately after the contract was finalized and the operation of the contract commenced. For this kind of negligence, it is only the petitioner, who is to blame and it cannot shirk and transfer the responsibility on the respondent who is an outsider and not expected to know the internal documentation of the office of the petitioner. He noted that the alleged apportionment is based on the calculation made by the Railway as early as on 14.04.2018. This was done even before the floating of the tenders and finalization of the contract. Therefore, the statement made by the petitioner that it came to know about the revised rates only in August 2018 does not appear to be sound, because the alleged apportionment was based on the commercial circular no. 21 dated 09.04.2018, which was supposed to be in the knowledge of the petitioner before the tender was floated and finalized. In the instant case, the circular dated 09.04.2018 was already in circulation with the General Managers (All India Railways) CMD (IRCTC), CMD (KRCL) etc., regarding the applicable GST rates on the supply of food and / or drinks by Indian Railways and IRCTC and their licensees @ 5% without ITC and it was made applicable w.e.f.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.25 of 38 16.04.2018 for advance reservation period. The circular nowhere provided that it would be applicable for Gatiman Express w.e.f. 15.08.2018 as claimed.
30. As regards the contention that the respondent was well aware that GST charges were revised from 18% to 5% and it had made the calculation on that basis, the Arbitrator has rightly observed that although, the petitioner has been emphasizing on the knowledge / awareness of the respondent but it has been trying to hide its own awareness about the internal working. He observed that since the commercial circular no. 21 dated 09.04.2018, was already in existence, the petitioner was expected to know it and it could have very conveniently incorporated it in the rates which have been indicated in Annexure 'F' of the tender document before the tender was floated and the contract was finalized. As such, the petitioner cannot monopolies on and take advantage of its own mistake and shift the blame towards the respondent that it was aware and was expected to know the internal calculations of the petitioner.
31. Now coming to the contention that since the respondent has made the payment of GST @ 5% as against 18%, which was part of the rates indicated in Annexure 'F', it cannot unduly enrich itself by claiming the reimbursement of GST @ 18%. In the impugned award, the Arbitrator has rightly observed that when the lump sum rates have been indicated in Annexure 'F' and same rates have been agreed by the parties at the execution of the contract, then how the OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.26 of 38 petitioner is alleging unjust enrichment on the part of the respondent. It is relevant to note that the Annexure 'F' nowhere provides that GST payable would be @ 18% or 5% on the meals. Only the lump sum rate has been mentioned, which was payable to the licensee. It is also to note that despite repeated letters, the petitioner did not give the basis of calculation of the rates and only at the fag end of the contract, it gave the basis and sought the acceptance, which in no terms can be said to be reasonable and fair. The case laws referred by the respondent are distinguishable on facts. In the case of Patel Engineering Ltd (supra), it was held that though this Court is not sitting in appeal over the award of the arbitral tribunal, the presence of ground under Section 34 (2) of the Act and the satisfaction arrived at by this Court in this regard, warrants interference more so, as the arbitral awards in question are declaratory arbitral awards and involved interpretation of clauses 2.7 and 3.4 of the BoQ and clauses 32 (ii)(a) and 33 (iii) of the conditions of contract and the Ld. Arbitrator was required to interpret the same in accordance with the established rules of interpretation and in line with the fundamental policy of Indian law. It was the contention of the counsel for the appellant that the potential effect of the arbitral award on public exchequer will be about Rs. 1000 crores, which the appellant, a public undertaking would have to pay and it was a case of unjust enrichment, which is contrary to the fundamental policy of Indian law.
32. In the instant case, there is no question of unjust enrichment.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.27 of 38 When the tenders were invited, the circular was in force. Nowhere in the contract, it was mentioned that GST @ 18% would be payable. Even in Annexure 'F', only the lump sum rate for meal was mentioned on the basis of which the respondent quoted its rate.
33. In the case of Brandavan Food Products (supra), the grievance of the petitioner was that by circular dated 09.10.2013, the respondent had introduced the concept of combo meal in place of regular second meal. It was held that the parties had entered into the Master License Agreement after the circular came into effect and the petitioner without protest had signed the agreement knowing about the circular and thus, in terms of the clause, the respondent could change the catering tariff and menu at any time, after the award of the license in view of clause 8.1 of the Master Service Agreement. In the instant case, as evident from the record, the circular was in force before the tenders were invited. It was thus incumbent upon the petitioner to incorporate the terms as per the circular, which was not done and therefore, it could not unilaterally change the same.
34. As regards the contention that the respondent continued to provide meals even after it was made aware that the rates are being revised, the letters of the respondent show that it had written to the petitioner seeking breakup of the rates but the petitioner chose to remain silent, made the deductions from the bills and gave the final reply only in June 2019 that too at the fag end of the contract. The Arbitrator has rightly observed that had the respondent defaulted in OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.28 of 38 providing meals as per the terms of the contract, it would have been held guilty of the violation of the contract and subject to punishment / penalties. It therefore better thought to continue to provide the services. It is relevant to mention that when the petitioner did not settle the dispute, it filed application before High Court for the appointment of the Arbitrator and filed the claims.
35. In the instant case, the Arbitrator has dealt with the contention of the petitioner that it could make any changes in the contract as and when required and also the question whether it could be done unilaterally or not. He referred Section 62 of the Act and the cases of Citi Bank N. A. Vs. Standard Chartered Bank, 2004 (1) SCC 12, Nalini Singh Associates VS. Prime Time IP Media Services Ltd, 153 (2008) DLT 174, H. B. Basavaraj (dead) by Lrs and another Vs. Canara Bank & Anr, 2010 (12) SCC 458. He also referred the case of DDA and Another Vs. Joint Action Committee, 2008 (2) SCC 672, where, it was held that it is wellknown principle of law that a person would be bound by the terms of the contract, subject of course to its validity. A contract in certain situations may also be avoided. With a view to make novation of contract binding, and in particular some of the terms and conditions thereof, must be made known there about. A party to the contract cannot at a later stage, while the contract was being performed, impose terms & conditions which were not part of the offer and which were based upon unilateral issuance of office orders, but not communicated to the other party in the contract, and which were not even the subject OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.29 of 38 matter of the public notices. In the case of H. B. Basawaraj (supra), it was held that the basic principle behind the concept of novation is the substitution of a contract by a new one only through the consent of both the parties to the same.
36. The Arbitrator has held that it is clear that there is no novation of contract because the respondent had not given its express or implied consent to the rates, which were revised by the petitioner, especially in view of the fact that the contents of the circular dated 09.04.2018 were not incorporated in the terms & conditions of the tender document which formed the basis of contract between the parties. He observed that changing of terms of the contract, after it is executed does not sound well in the context of ensuring transparency and equal treatment to all the bidders. Even if for the sake of argument, it is considered that the rates were lowered, it would tantamount to causing prejudice to the respondent that if those were the conditions of the contract at the time of floating and finalization of the contract, the respondent would have taken into account those terms & conditions and would have participated in the tendering process accordingly. This situation, in that case would have been different because in case, the respondent did not participate in the contract on the offered terms & conditions, it may have been possible that some other bidder may have agreed to the terms & conditions and the respondent may not have been successful in the bids. Changing the terms & conditions midway does not augur well in view of the consent of equal participation of the bidders and equal OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.30 of 38 treatment to all of them. Therefore, once the terms & conditions have been finalized and different bidders participated in the bidding process and the successful bidder has been awarded the contract, it vitiates entire process of the contract finalization process if the terms & conditions of the contract are changed subsequently, after the contract is awarded. The Arbitrator has rightly rejected the contention of the petitioner that it was free to change the terms & conditions of the contract. He held that if the petitioner wanted to change the terms & conditions of the contract, it could have issued the proper notice to the respondent and if the respondent does not agree to the changed terms & conditions, it was free to either cancel the contract or withdraw the proposed terms & conditions. In the alternative, the respondent also could have backed out from the contract and the contract would have been accordingly cancelled. He observed that the petitioner did not incorporate the terms & conditions of the commercial circular dated 09.04.2018 in the contract. It subsequently tried to do the same in a roundabout manner, which he could do only by following the proper procedure, by issuing a notice and obtaining the consent of the respondent, which in this case was not done, which fact is also evident from the correspondences. It was rightly observed that for all this failure, it is only the petitioner, who is to blame and therefore, it cannot take advantage of its own lapse by forcing the respondent to accept the revised terms and conditions of the contract.
37. In the case of Sasan Pvt Ltd (supra), the term novation of OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.31 of 38 contract was discussed, which means that .......there being a contract in existence, some new contract is substituted for it, either between the same parties (for that might be) or between different parties, the consideration mutually being the discharge of the old contract. It was held that novation is not complete unless it results in substitution, recession or extinguishment of the previous contract by the new contract. Mere variation of some terms of a contract does not constitute a novation. In Lata Construction & Ors (supra) also, Section 62 of the Indian Contract Act was discussed and it was held that one of the essential requirements of 'Novation' is that there should be complete substitution of a new contract in place of the old. It is in that situation that the original contract need not be performed. A substituted contract should rescind or alter or extinguish the previous contract. But if the terms of the two contracts are inconsistent and they cannot stand together, the subsequent contract cannot be said to be in substitution of the earlier contract. In the case of Babu Ram (supra), it was held that novation under Section 62 of the Contract Act requires a clear plea, issue and evidence. In the case of Savita Dey (supra), the landlord had filed a suit for recovery of possession of the demised premises and for mesne profit against the tenant, it was held that the arguments of the tenant about the increase of rent and novation of contract was rightly rejected by the Trial Court. There is no inflexible principle that every variation at the rate of rent payable under a registered deed of lease necessarily implies surrender of the said lease and creation of new tenancy, or that whenever rate of rent is altered a new relationship between the OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.32 of 38 parties gets created. In the case of Travancore Devaswom Board (supra), there was a claim regarding escalation of price. It was stipulated in the contract that the prices quoted therein would remain unchanged. The respondent made the representation in between. The appellant had taken legal opinion of the experts and allowed the respondent to make supply beyond the stipulated date and in variation of the specification. It was held that there was no material on record to show either by conduct or by implication that the contract has been varied and / or enhancement in rates was agreed upon. The case of Lloyds Steel Industries Ltd (supra) relates to the bank guarantee. It was held that any variance in the terms of the contract without the consent of the surety would lead to his discharge as to the transaction subsequent to the variance.
38. In the instant case, there is no novation of contract because the respondent has not given its express or implied consent to the rates, which were revised by the petitioner. A contract is the outcome of mutual agreement and it was equally open to the parties to mutually agree to bring their contract to an end, enter into a new contract or modify the earlier contract. Any alteration or variation in the terms of the contract would imply that both the parties have agreed to the change in the agreement. It is true that the catering charges provided in Annexure 'F' could be revised from time to time but it could be only in the case if there is a change in the menu.
39. On a perusal of objections made by the petitioner, I find that OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.33 of 38 the challenge is on substantive questions of facts which is not permissible under law. Even otherwise, from a careful perusal of the arbitration proceedings and the award therein, I find that the Arbitrator has given his findings only after considering the pleadings, documents and arguments advanced before him, that too after taking into account the documentary evidence. Further, the scope and purview of deciding the present objections being limited one does not permit this Court to replace the finding given by the Arbitrator, by its own by reappreciating the evidence / material produced before the Arbitrator.
40. It was held in the case of State Trading Corporation of India Ltd Vs. Teopfer International Asia PTE Ltd FAO (OS) 242/2014 that Section 34 proceeding which in essence is the remedy of annulment, cannot be used by one party to convert the same into a remedy of appeal. Finality of the award is very important. An interpretation placed on a contract is a matter within the jurisdiction of the Arbitral Tribunal and even if an error exists, this is an error of fact within jurisdiction which cannot be reappreciated by the Court under Section 34 of the Act. Legal position is no more res integra that the Arbitrator having been made the final Arbiter of resolution of dispute between the parties, the award is not open to challenge on the ground that Arbitrator has reached at a wrong conclusion. If we were to start analyzing the contract between the parties and interpreting the terms and conditions thereof and which will necessarily have to be in the light of the contemporaneous conduct OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.34 of 38 of the parties, it will be nothing else than sitting in appeal over the arbitral award and which is not permissible.
41. As regards the contention that the Arbitrator has interpreted the contract which interpretation is not in line with the terms of the contract and is contrary to the law of land, I am of the view that this was the possible interpretation made by the Arbitrator, which does not require any interference from the Court in terms of Section 34 of the Act. In this case, Ld. Arbitrator has discussed the terms and conditions of the contract and dealt with the submissions and passed the impugned award. It is not the case that the Arbitrator was bias or had not given opportunities to the parties to present their case or file the documents or lead the evidences. All the contentions were discussed in detail and thereafter, the impugned award was passed, which is supported with reasons.
42. Now coming to the interest part, in the instant case, the Arbitrator has awarded interest @ 12% per annum. He referred the financial terms & conditions contained in the General Condition of License especially in clause 2.3 and awarded the interest @ 12%. He also referred the reconciliation statement and held that the respondent would be entitled to interest @ 12% per annum w.e.f. 01.05.2019 till the amount is paid by the petitioner. I do not find any reason to interfere on this. As to the costs, the Arbitrator has awarded Rs. 50,000/, which was paid by the respondent to the Arbitrator. He directed the petitioner to make payment of difference OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.35 of 38 of the arbitral fee as per the schedule of the rates & payment. I am of the view that reasonable interest and costs have been awarded by the Arbitrator, which do not require interference in any manner.
Conclusion:
43. Now to sum up, in the instant case, most of the grounds raised by the petitioner to challenge the award are factual in nature which have been already considered and adjudicated in the im pugned award. It is outside the scope of Section 34 of the Act to reappreciate the entire evidence and come to conclusion because such an approach would defeat the purpose of arbitration proceed ings. It has been consistently held that when a court is applying the public policy test to an arbitration award, it does not act as a court of appeal and consequently, errors of facts cannot be corrected. A pos sible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quality and quantity of ev idence to be relied upon when he delivers his arbitral award. Once, it is found that the arbitrator's approach is not arbitrary or capricious, then he is the last word on facts. (P.R Shah, Shares & Stock Brokers (P) Ltd v. B.H.H Securities (P) Ltd. [(2012) 1 SCC 594).
44. A perusal of the arbitral award shows that the arbitrator has examined all the relevant aspects of the agreement, the correspondences made by the parties, the terms of the contract and the conduct of the parties. He has remained inside the parameters of the contract and has construed the provisions of the contract. The OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.36 of 38 petitioner has failed to establish that the arbitrator has travelled beyond the terms of the contract.
45. Having examined the various contentions of the petitioner on the touchstone of the parameters of interference as explicitly laid down by the Supreme Court in several judgments referred to above, I am of the view that the impugned Award does not suffer from any infirmity or error apparent on the face of record. It is not for this Court to sit in appraisal of the evidence led before the learned Arbitrator and this Court will not open itself to the task of being a judge on the evidence placed before the Arbitrator which was subject matter of dispute. In the present case, the Arbitrator has deliberated on the issues under reference which were within his competence and as per the agreement entered into between the parties. There are no allegations against the Arbitrator of misconduct nor of having misconducted the proceedings which have either been specifically alleged by the petitioner or established. The Arbitrator has duly explained the reasons for arriving at his decisions. There is nothing to indicate that award is in conflict with the basic notions of justice and the fair play and fundamental policy of Indian law or in contravention of the terms of the agreement or it lacks reasoning as pleaded in the petition.
46. For the aforesaid reasons the petition is dismis sed with no order as to costs.
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.37 of 38
47. File be consigned to record room.
Announced in open court
today i.e. 26th February, 2021 (Sanjiv Jain)
District Judge (Commercial) 03
Patiala House Courts, New Delhi
OMP Comm No.22/20 IRCTC Vs. M/s Deepak & Co. Page No.38 of 38