Contract interpretation and GST reimbursement in catering licence disputes were upheld, with no Section 34 interference warranted.

Delhi HC examined whether a catering service provider was contractually bound to supply welcome drinks at the outset of the licence and whether IRCTC could adjust related charges. The court treated the tender documents, later policy correspondence, and the arbitral record as supporting the view that the welcome drink obligation was not an express initial contractual duty, so the service provider's claim and rejection of IRCTC's adjustment were sustainable. It also considered whether GST paid on meal production charges was reimbursable, and accepted that the contract and Railway Board circulars contemplated reimbursement of tax actually deposited under the post-GST regime. No ground for interference under Section 34 was made out.

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Issues: (i) whether the service provider was contractually bound to supply welcome drink for the initial period and whether IRCTC could adjust the related charges; (ii) whether GST paid on production charges for meals was reimbursable under the contract and the applicable Railway Board circulars.

Issue (i): whether the service provider was contractually bound to supply welcome drink for the initial period and whether IRCTC could adjust the related charges.

Analysis: The tender documents and annexures identified the sector-wise catering services but did not expressly include welcome drink. The incorporation of the Railway Board circular did not convert the welcome drink obligation into a clear contractual duty under the partial unbundling model. The later policy decision requiring supply of welcome drink was treated as a fresh decision taken after commencement of the licence, and the correspondence showed that the service provider had objected while agreeing to supply only without prejudice to its claim for charges. The arbitral view, based on the contract, conduct of parties, and evidence, was a possible view and was not shown to be perverse.

Conclusion: The welcome drink claim was rightly allowed in favour of the service provider and the corresponding adjustment by IRCTC was not justified.

Issue (ii): whether GST paid on production charges for meals was reimbursable under the contract and the applicable Railway Board circulars.

Analysis: The contractual scheme distinguished between production charges and service charges, and the Railway Board circular governing catering policy contemplated reimbursement of applicable taxes on proof of deposit. After the introduction of GST, the later circular specifically provided for GST reimbursement and reflected GST as additional to catering charges. The evidence showed deposit of GST by the service provider and corresponding reflection in IRCTC's tax returns, supporting reimbursement. The court held that the arbitrator did not rewrite the contract and that the GST claim was supported by the contractual framework and the post-GST regime.

Conclusion: The GST reimbursement claim was correctly allowed in favour of the service provider.

Final Conclusion: No ground for interference under the Arbitration and Conciliation Act was made out, and the arbitral award was sustained on the two claims that were challenged.

Ratio Decidendi: Interference with an arbitral award under Section 34 is warranted only when the construction of the contract is perverse or not a possible view, and a contractual scheme incorporating governing circulars may justify reimbursement of charges arising from a later statutory tax regime.

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