Delhi District Court
R.C. Goel vs Indian Railway Catering Tourism ... on 4 February, 2026
IN THE COURT OF SH. MANOJ KUMAR SHARMA:
DISTRICT JUDGE-07 (WEST)
TIS HAZARI COURTS : DELHI.
ARBTN No. 60791/2016
CNR NO. DLWT010004112012
In the matter of :
RAMESH CHAND GOEL (Now Deceased)
Through his Legal Heir
Sh.Nitin Goel
S/o Late Sh. R.C. Goel
R/o. 1, Ram Kishore Road,
Portion 5, Civil Lines,
Delhi-110054. ...PETITIONER
Versus
1. INDIAN RAILWAY CATERING & TOURISM
CORPORATION
9th Floor, Bank Of Baroda Building,
16, Parliament Street, New Delhi-110001
Through It's Managing Director.
2. MINISTRY OF RAILWAY
Through It's Secretary
New Delhi. ....RESPONDENTS
R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
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APPLICATION / OBJECTIONS UNDER SECTION 34 OF THE
ARBITRATION AND CONCILIATION ACT, 1996 AGAINST
AWARD DATED 23.12.2011 PASSED BY SH. M.G. ARORA,
SOLE ARBITRATOR, DELHI IN CASE TITLED AS "R.C.
GOEL VS. INDIAN RAILWAY CATERING & TOURISM
CORPORATION.
Date of filing of objections : 08.02.2012
Date on which judgment reserved : 31.01.2026
Date on which judgment pronounced : 04.02.2026
JUDGEMENT
1. The petitioner has filed the present application / petition under Section 34 of The Arbitration and Conciliation Act, 1996 (hereinafter referred to as The A & C Act) seeking setting aside of the arbitral award dated 23.12.2011 delivered by Ld. Arbitrator Sh. M.G. Arora whereby his claim seeking refund of Rs.6,00,000/- from respondent no.1 was rejected.
2. CASE OF THE OBJECTOR AS PER PETITION.
The objector / petitioner has averred the following facts in the present petition:-
2.1. The applicant / petitioner is the sole proprietor of the firm M/s R.C. Goel, who is in the business of providing on-board catering services to the trains operated by Indian Railways.
R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 2 /19 2.2. While respondent no.1 is an enterprises operated and managed by the Ministry of Railways (Respondent no.2), who awards catering contracts from time to time by inviting tenders for on- board catering services for various train groups.
2.3. On 12.09.2005, respondent no.1 issued tenders through newspaper advertisement for the catering services of Rapti Sagar Express (5011-12, 5089-90, 5091-92) and Awadh Express (9037- 38, 9039-40).
2.4. In response thereto, the petitioner participated in the tender process for securing the contracts and deposited earnest money of Rs.3,00,000/- per train group, totaling to Rs.6,00,000/- for the bids.
2.5. But at the time of deposit of earnest money and opening of the technical bid and financial bid on 21.10.2005 and 24.12.2005 respectively, respondent no.1 did not disclose the factum of pendency of Writ Petition No. 6787/2005 (M/s Pantry Car Employees Union & Ors. vs. Union of India & Ors.) before the Hon'ble High Court of Allahabad, Lucknow Bench wherein an interim order dated 19.10.2005 was passed thereby restraining the termination of existing employees of the pantry services.
2.6. The petitioner got to know about the aforesaid order, which had a direct bearing upon his interest involved in the tenders of the catering services issued by respondent no.1, only after the completion of bids.
R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 3 /19 2.7. After the allotment of the license for managing the catering services in the aforementioned train routes, the petitioner was asked to deposit a license fee of Rs.1,11,00,000/- for the 5011-12, 5089- 90 and 5091-92 group of trains and Rs.1,09,20,000/- for the group of trains bearing no. 9037-38 and 9039-40.
2.8. The petitioner was further directed vide letter dated 28.12.2005 to convey his acceptance of the terms and conditions of the license alongwith the aforesaid license fee and two demand drafts of Rs.18,23,000/- and Rs.15,99,000/- as security deposit by 04.01.2006 in favour of respondent no.1. The total license fee for the term of five years came to Rs.11,01,00,000/-.
2.9. The petitioner vide reply dated 02.01.2006 expressed his readiness to make the aforesaid deposits but raised his concerns regarding the potential liabilities arising from the pending writ petition and interim orders restraining the termination of existing pantry employees of previous contractors.
2.10. Respondent no.1 had been playing hide and seek policy and did not disclose all the relevant facts which affect the interest of the bidders including the petitioner who participated in the tender process issued for the allotment of work of on-board catering services in the aforementioned group of trains.
2.11. Respondent no.1 also violated the principle of natural justice R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 4 /19 and deliberately concealed the factum of pendency of writ petition before Hon'ble Allahabad High Court at the time of accepting the earnest money from the petitioner.
2.12. Despite legal notices and correspondence, respondent no.1 insisted on payment of the license fee and deposit of security deposit and subsequently issued a show cause notice dated 28.04.2006, which was duly replied by the petitioner on 10.05.2006.
2.13. Ultimately, respondent no.1, vide letter dated 23.09.2006, withdrew the license offer, forfeited the earnest money of Rs.6,00,000/- and debarred the petitioner for one year from future catering contracts.
2.14. Upon this, the petitioner initiated arbitration proceedings demanding the refund of his advance security deposit to the tune of Rs.6,00,000/- from respondent no.1, which culminated in the rejection of his claim.
3. GROUNDS / OBJECTIONS RAISED IN THE INSTANT PETITION.
(i) Ld.Arbitrator acted in violation of well established principles of law and exercised his jurisdiction beyond the contours of the law;
(ii) Ld. Arbitrator failed to appreciate that respondent no.1 withheld vital information regarding pendency of a writ petition before the Allahabad High Court, Lucknow Bench regarding the absorption R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 5 /19 of the pantry workers who were working with the previous contractors;
(iii) Ld. Arbitrator failed to appreciate the implication of the outcome of the aforesaid writ petition upon the rights / interests of the petitioner.
4. Notice of the present application / petition were issued to the respondents in terms of the order dated 09.02.2012 and same have been received back duly served on 30.04.2012 and respondent no.1 filed its appearance and reply before the Court.
5. CASE OF RESPONDENT NO.1.
The respondent no.1 has filed reply to the objections incorporating the following contentions:-
5.1. The present objections under Section 34 of The A & C Act do not satisfy the statutory grounds for setting aside an arbitral award.
5.2. The petitioner has failed to demonstrate that the award in question is contrary to the fundamental policy of Indian law, the interest of India, justice or morality or that it suffers from patent illegality.
5.3. The award in question is a well reasoned award passed within the parameters of law and does not warrant any interference.
5.4. The petitioner, despite being declared the successful bidder in an open tender process, committed default in depositing the annual R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 6 /19 license fee and security deposit as prescribed under the tender conditions and in his own written undertaking.
5.5. The refusal on the part of the petitioner to comply with the terms and conditions of the tender by depositing the annual license fee and the security deposit upon the premise of a pending litigation before the Hon'ble High Court of Allahabad was unfounded / unjustifiable as he was neither a party to the said case nor any relief was claimed against the new licensees.
5.6. Moreover, vide order dated 05.04.2006, Hon'ble High Court had made it clear that respondent no.1 was free to enter into agreements with newly selected licensees so that the passengers did not suffer.
5.7. The petitioner's conduct caused substantial disruption to IRCTC's catering operations, forcing continuation of ad-hoc interim arrangements, inconvenience to passengers and necessitating re-tendering of the concerned train groups.
5.8. The earnest money deposit of Rs.6,00,000/- was forfeited after issuance of show cause notice in terms of the conditions incorporated in the tender documents.
5.9. The Arbitral Tribunal examined the tender documents and the petitioner's written undertaking, which clearly provided that failure to accept the award or commence work would result in forfeiture of R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 7 /19 the earnest money and debarment for one year. So, consequently, the rejection of claim filed by the petitioner for the refund of Rs.6,00,000/- is wholly lawful and justifiable.
5.10. The award dated 23.12.2011 is well reasoned and does not suffer from any illegality or perversity.
6. REJOINDER 6.1. In the rejoinder, the applicant/ petitioner has denied the averments made in the reply of respondent no.1 and reiterated the averments made in his objection/ application filed under Section 34 Arbitration & Conciliation Act.
7. I have heard the final arguments on behalf of both the parties and gone through the material available on record.
8. ANALYSIS.
8.1. For the adjudication of the present petition, the primary issue before this Court is whether the arbitral award dated 23.12.2011 suffers from any illegality / infirmity falling within the limited and well-defined grounds for interference prescribed under Section 34 of The A & C Act.
8.2. The petitioner has assailed the award mainly on the grounds of alleged concealment of material facts by respondent no.1, violation of principles of natural justice, non-consideration of the implication of the outcome of the writ petition pending before the Hon'ble R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 8 /19 Allahabad High Court at the relevant time and the errors of law apparent on the face of the record.
8.3. At the cost of repetition, the applicant has primarily laid challenge to the award in question on the premise that Ld. Arbitrator failed to appreciate / take into consideration the illegal omission on the part of the respondent in not disclosing / apprising him about the pendency of the Writ Petition No.6787/2005 before the Hon'ble Allahabad High Court wherein an interim order dated 19.10.2005 was passed whereby the termination of the existing pantry employees was stayed, which had a direct bearing upon his interest involved in the catering contracts awarded by respondent no.1.
8.4. In a nutshell, the applicant has contended that respondent no.1 was not justified in forfeiting his Rs.6,00,000/-, which were deposited as an earnest money at the time of applying for the catering contracts.
8.5. At this stage, it is apposite to highlight that The A & C Act is founded upon the principle of minimal judicial interference, offering limited avenues for the Court to intervene in the arbitral awards.
8.6. Section 5 of The A & C Act puts an embargo upon the judicial intervention in cases of domestic arbitration and provides that judicial authority shall not interfere in the cases of domestic R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 9 /19 arbitration except in the cases specifically provided. Reference can be made to the judgment passed by Hon'ble Apex Court in Jan De Nul Dredging India Private Limited Vs. Tuticorin Port Trust, SLP Civil No. 8803 of 2021 dated 07.01.2026 wherein it was held that the scope of inference of the Court with the arbitral matters is virtually prohibited, if not absolutely barred.
8.7. Section 34 of The A & C Act provides limited, exclusive grounds for challenging an arbitral award and it is the well settled position of law that under Section 34, the award cannot be challenged on merits as law refrains the Court from appreciating or re-appreciating the evidence brought on record by the parties during the arbitration proceedings.
8.8. For a better understanding, Section 34 The A & C Act is reproduced hereinbelow :
"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 sub-section (2) and sub-section (3).
(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 indication thereon, under the law for the time being in force; or R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
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(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,--
(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 R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 11 /19 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 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 R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 12 /19 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.]"
8.9. A bare perusal of the aforesaid provision reflects that the scope of challenge to an arbitral award under Section 34 of The A & C Act is very limited on the grounds specified in sub section 2 and 2(a).
8.10. The law prescribes that an arbitral award cannot be interfered merely on the ground that the award is illegal or is erroneous in law requiring re-appraisal of the evidence adduced before the Arbitral Tribunal.
8.11. Furthermore, the view / opinion taken by the Arbitral Tribunal is ordinarily to be accepted and upholded and even if two views are possible in light of the factual matrix of the case and the evidence available on record, in exercise of power under Section 34, the Court is not empowered / competent to re-appraise / appreciate the evidence and take the view other than the one taken by the Arbitrator since the proceedings under Section 34 are summary in nature.
R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 13 /19 8.12. In other words, the competence of the Court to interfere with the arbitral award has been restricted and limited by the parameters laid down in Section 34 of The A & C Act since the primary object of The Act is to uphold the arbitral autonomy with the minimum intervention of Courts.
8.13. Now this Court would deal with the objections put forth by the applicant to the award in question in light of the aforesaid position of law.
8.14. A close scrutiny of the arbitral award in question dated 23.12.2011 reveals that Ld. Arbitrator has categorically recorded that the petitioner voluntarily participated in the entire tender process, submitted bids after accepting the tender conditions, and furnished a written undertaking to comply with all the contractual obligations, including timely deposit of license fees and security deposits.
8.15. Ld. Arbitrator has observed that the petitioner, despite being declared the successful bidder, failed to honour the aforesaid commitments and repeatedly sought to defer performance of his obligation on speculative and unfounded grounds.
8.16. Besides the aforesaid general observations made in the award in question, Ld. Arbitrator dealt with the plea regarding concealment of pendency of the writ petition filed by the pantry workers of the previous contractors seeking their regularization / R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 14 /19 absorption and rejected the same after assigning reasons.
8.17. Ld. Arbitrator categorically observed that the aforesaid writ proceedings had no bearing upon the interest of the petitioner since neither he was a party to the same nor there was any injunction order thereby restraining respondent no.1 from awarding new contracts or regulating the catering services through new licenses.
8.18. Ld. Arbitrator also dealt with the issue of forfeiture of earnest money deposited by the petitioner and order regarding his exclusion from participating in the bids for next one year and recorded a categorical finding that the tender documents explicitly empowered the respondent to forfeit the earnest money and debar the bidder in the event of failure to accept the license or commence work.
8.19. Ld. Arbitrator observed that persistent refusal on the part of the petitioner in depositing the requisite license fee and security constituted breach of contractual obligations, justifying the forfeiture of the earnest money and consequent debarment from bidding for next one year.
8.20. For a better understanding, para 26a and para 26b of the award dated 23.12.2011 are reproduced hereinbelow:
"26(a) After hearing both the parties and going through all related documents submitted to the tribunal, it is abundantly clear that the pendency of the petition, before the High Court of Allahabad (Lucknow Bench) by M/s Pantry Car Employees Union has been the main R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 15 /19 reason being offered for non acceptance of the Award letter, and deposit of Security Deposit and Annual License fee.. The petition filed in the High Court, Allahabad was between the seven parties and the Union, the petitioners. (Pantry Car employees Union No other person was a party to it. Petitioners were claiming absorption with IRCTC. No relief was claimed against any other person or the new licensee. The apprehension of the Claimant that the matter was not finally decided and uncertainty prevailed regarding the fate of the workers, was completely unfounded. In fact, the High Court of Allahabad vide their two interim orders dated 19.10.2005 and 5.4.2006 had virtually rejected the two prayers of the petitioners (Refer para 7 (b) and 7(c) above) for stopping the process of tendering/awarding the catering services on the trains and transfer the pantry car to IRCTC. Even if the matter was subjudice, for the remaining prayer (refer para 7 (a) above for absorption of petitioners with IRCTC, the Claimant had nothing to do with the said litigation as no relief had been claimed against them. In so far as the status of the petitioner /workers was concerned, it again had no concern with the new licensees. The existence of some litigation pending against IRCTC, cannot be construed as a reasonable ground for not accepting the award letter. The Arbitral tribunal has examined the undertaking, signed and given by the Claimant along with tender documents and noted that it clearly mentioned that they bind themselves to execute the license management awarded, and commence work in accordance with the laid down terms and conditions, failing which they will not have any objection for forfeiture of full earnest money deposited....... Also on account of non acceptance of the award........ they shall be debarred by R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 16 /19 IRCTC for further participation in the future tenders of IRCTC for a period of one year.
26 (b) Considering and judging the stance being adopted by the claimant at various stages, it is well considered conclusion that if there was any fear or apprehension of probable adverse order by the court directing that the petitioners be absorbed, it should have been IRCTC, who should have been really concerned or should have been under tremendous pressure of any future liability, emanating from the litigation. The fact of successful ad hoc arrangements made by IRCTC for the two groups of trains, perhaps, did not provoke or encourage any rethinking on the part of the Claimant. M/s RC Goel (Claimant), by no stretch of imagination in the prevailing environment could have been burdened with such a farfetched responsibility of erstwhile workers of the parties (No 6 & 7). M/s Goel (Claimant) were apparently afflicted by flimsy, imaginary and unfounded suspicion of litigation and probable liability. Despite advices by the IRCTC that M/s RC Goel (Claimant) is not a party in the litigation in the High Court, Allahabad (Lucknow Bench) the claimant adopted an unrelenting attitude and could not view beyond their off repeated response.
It only leads one to believe that the Claimant was trying to wriggle out of the commitment by holding on, as it were, with their teeth, to the argument of on-going litigation, may be for some other extraneous reason. This is nothing but doggedness, obstinacy and refusal to do and undertake business, in a professional manner despite making an honourable commitment. Such an attitude cannot be called conducive for any fair business. It would be an anomaly that a person, who by his own conduct prevents a contract to take place, is allowed the benefit of non forfeiture of earnest money.
R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 17 /19 The Respondent's action has not been found, by the tribunal, based on any unreasonable and unjustified grounds. The facts and events clearly reflect that the Claimant has not been able to demonstrate their earnestness in the offer made to the Respondent, hence the "earnest money" deposited has been rightly forfeited. Hence, the claim of the Claimant for recovery of the forfeited earnest money of Rs. 6 lakhs is dismissed."
8.21. It is clear from a plain reading of the aforesaid excerpt that Ld. Arbitrator duly dealt with both the core arguments / grounds put forth by the petitioner during the arbitration proceedings for challenging the forfeiture of earnest money by the respondent.
8.22. Even otherwise, there is no dispute to the fact that before the forfeiture of the earnest money to the tune of Rs.6,00,000/-, the petitioner was duly served with a show cause notice and he submitted a detailed reply to the same.
8.23. So far as the arbitration proceedings are concerned, the record reflects that the petitioner participated fully, led evidence and advanced arguments and the award in question is a reasoned one, reflecting due consideration of pleadings, evidence, contractual clauses and applicable law.
8.24. Moreover, no procedural unfairness or denial of hearing has been pleaded / contended by the petitioner.
R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
Page: 18 /19 8.25. In view thereof, this Court is of the opinion that the objections raised by the petitioner through the instant application is essentially an attempt to re-agitate the issues which has already been duly considered by the Ld. Arbitrator in the award in question.
8.26. In a nutshell, the award in question dated 23.12.2011 neither contravenes the fundamental policy of Indian law nor shocks the conscience of the Court on grounds of justice or morality nor any patent defect / illegality is apparent on the face of the award.
8.27. In light of the entire foregoing discussion, this Court is of the opinion that the present petition filed by the petitioner / applicant under Section 34 of The A & C Act is meritless and deserves dismissal.
9. RELIEF.
9.1. Accordingly, the instant objections / petition filed by the applicant / petitioner under Section 34 of The A & C Act stands dismissed.
10. Parties are left to bear their own costs.
11. Appeal file be consigned to record room.
MANOJ Digitally by MANOJ signed KUMAR Date: 2026.02.04 KUMAR SHARMA Announced in the Open Court SHARMA 15:57:56 +0530 on 04th February, 2026. (Manoj Kumar Sharma) District Judge -07 THC/West/Delhi.
R.C. Goel (D) through LRs Vs. Indian Railway Catering & Tourism Corporation & Anr.
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