AI Structured Summary
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Judgment
S. No.,Prayer and Claims,Award
1,"The impugned cancellation be held to be
void, illegal and arbitrary","Treated as Preliminary issue
and decide vide order dated
19.7.2007 and not challenged
in any forum, Not accepted
2,"Refund of concession fee of
Rs.2,70,37,037","Rs.1,65,30868/-
3,"Security deposit of Rs.20,00,000/-",Nil
4,"License fee paid along with Interest @
24% from date of deposit",Nil
5,Loss of Profit of 49043994/-,Nil
6,"Investment in Infrastructure, Utensils
Equipment, Cost in establishing base
Kitchen to the tune of Rs.1,00,00,000/=",", Nil
7,"Loss of Good Will to the extent of
Rs.2,00,000/=",Nil
8,"Loss of Opportunity (Rs.2,00,00,000)",Nil
9,"Compensation for mental torture and
harassment (Rs.1,00,00,000/=)",Nil
10,"Bar operating against the claimant from
participating in future projects be
removed",Nil
11,"Cost of litigation including costs incurred
towards cost and legal service charges.",Nil
S. No.,Counter Claims,Award
1.,"Loss of good will and reputation
(3 crores)",Nil
2.,"Loss due to making alternative
arrangement and awarding license
temporarily (Rs.40 lacs)",40 lacs
3.,"Loss due to detention at Serum
Station on 15.1.06 for 1 hr 15 mtd
(50 lakhs)",Nil
,,
SECTION â€" TWO,,
2.0 FINANCIAL TERMS AND CONDITIONS,,
2.1 - Payment of Licence fee,,
Licence fee @ 15% of running bills, submitted by the Licensee, shall be charged on basis of occupancy of the train certified by the Train",,
Superintendent on duty.,,
2.2Â Payment of Concession Fee Bidders are required to offer consolidated Concession Fee payable by the bidder to IRCTC for the 5 years tenure,,
of the Licence in the prescribed format. It will be a lump sum amount payable in three equal installments over a period of two years. First installment,,
should be paid at the time of award of licence, second installment after one year of payment of the first installment and the third installment before the",,
end of the second year. The Concession Fee will be in addition to the deduction of Licence fee @ 15% on running bills.,,
…………,,
2.4 - Refund of Concession Fee,,
In the event of permanent cancellation/withdrawal of train service by the Railway Administration, the agreement shall be terminated without any",,
notice or assigning any reasons. In such an event refund of Concession Fee will be admissible in the following manner:-,,
i) the proportionate Concession Fee will be refunded, if the train is cancelled within a period of five years from the date of operation of this agreement.",,
No claim for any consequential loss of business/damages will be entertained by the IRCTC other than what is specially provided for in this para. â€,,
A perusal of the tender document clearly reveals that there are separate amounts which were to be deposited by the Respondent at the time of,,
awarding of tender. Clause 2.2 of General Conditions of license, Section-Two mentions the consolidated concession fee which was to be paid by the",,
Respondent. Clause 2.1 of the main General Conditions of License, Section-One specifies the security deposit, which was to be paid by the",,
Respondent. As per clause No.7.11 of the General Conditions of License, Section-One, the Petitioner has the right to forfeit the Security deposit in",,
case of unsatisfactory services. Further, clause no.8.1, of the same, also clearly provides that if there is any breach of any terms and conditions of the",,
license, the security deposit, license fee and concession fee could be forfeited, in whole or in part.",,
Learned Arbitrator has clearly come to the conclusion while answering claim Nos.8 & 9 that the termination of the contract is valid. Relevant,,
portion of the award in respect of claim nos.8 & 9 is set out below:,,
“Claim No 8,,
Since the termination of agreement is valid in the given circumstances under Clause 7.11, there is no ground to award relief for loss of opportunity.",,
Claims No 9,,
As discussed above, the contract was terminated on account of poor catering services and public complaints in this regard. No one should be awarded",,
for his own lapses and thus no compensation can be granted for mental torture and harassment, which otherwise have not been substantiated with",,
evidence. Rather there is no rebuttal to the fact that the respondent suffered due to conduct of claimant.â€,,
Thus, there is no dispute that the termination by the Petitioner of the Respondent’s license on account of poor catering service has been",,
completely upheld by the learned Arbitrator. However, it appears that in claim No.2, the Arbitrator has committed an error. In claim No.2, the",,
Arbitrator has wrongly considered the license fee as the concession fee and has deducted license fee from concession fee and has refunded a sum of,,
Rs.1.65 crores to the Respondent.,,
The Supreme Court in Oil & Natural Gas Coporation Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705, on the question of damages, held as under:",,
“68. From the aforesaid discussions, it can be held that:--",,
(1) Terms of the contract are required to be taken into consideration before arriving at the conclusion whether the party claiming damages is entitled,,
to the same;,,
(2) If the terms are clear and unambiguous stipulating the liquidated damages in case of the breach of the contract unless it is held that such estimate,,
of damages/compensation is unreasonable or is by way of penalty, party who has committed the breach is required to pay such compensation and that",,
is what is provided in Section 73 of the Contract Act.,,
(3) Section 74 is to be read along with Section 73 and, therefore, in every case of breach of contract, the person aggrieved by the breach is not",,
required to prove actual loss or damage suffered by him before he can claim a decree. The Court is competent to award reasonable compensation in,,
case of breach even if no actual damage is proved to have been suffered in consequence of the breach of a contract. In some contracts, it would be",,
impossible for the Court to assess the compensation arising from breach and if the compensation contemplated is not by way of penalty or,,
unreasonable, Court can award the same if it is genuine pre-estimate by the parties as the measure of reasonable compensation.â€",,
A perusal of the tender clearly reveals that the license fee is in addition to the concession fee. This is clear from clause No.2.2 of General,,
Conditions of License. The learned Arbitrator has also erred in holding that only the security deposit could have been forfeited and not the concession,,
fee. These are glaring errors and a complete misreading of the tender conditions and general conditions of license. A perusal of the two clauses shows,,
that the Security Deposit and the Concession Fee are separate and distinct components. One is not interlinked with the other. Clause 8.1 permitted the,,
Petitioner to forfeit both amounts. Considering that the termination was upheld due to the pathetic and abysmal quality of services provided, the",,
forfeiture cannot be held to be unreasonable. Award is, thus, not sustainable. Thus, the Award in respect of claim No.2 is set aside.",,
Award of the counter claim of Rs.40 Lakhs as per counter claim no.2 is upheld. Petitioner is free to execute the award in the above terms.,,
OMP is disposed of.,,