Delhi High Court Declines Interim Reinstatement Of IRCTC Caterer, Cites Passenger Complaints And Public Interest

The Court held that it would not order continuation of an arrangement under a terminated agreement, observing that the legality of the termination must be decided in arbitration and that, at the interim stage under Section 17 of the Arbitration Act, the arbitrator only examines whether a prima facie case exists or not.

While refusing to interfere with the order, Justice Mini Pushkarna observed, “The learned Arbitrator has categorically held that, taking into account the factum of registration of various deficiencies in service quality, and persistent passenger complaints on the online system, it would be against the public interest to grant any interim stay to the appellant herein. Thus, the learned Arbitrator did not find the present case to be a fit case where a status quo ante deserved to be granted. The aforesaid view by the learned Arbitrator does not suffer from any infirmity considering the submissions and documents on record”.

Senior Advocates Sandeep Sethi and Sudhir Makkar appeared for the appellant while Saurav Agrawal and Rajat Malhotra appeared for the respondents.

In the present matter, IRCTC issued a tender which also contained the provisions relating to the Master Licence Agreement. The services to be rendered were two pronged: (A) construction and operation of base kitchens, and (B) provision of onboard catering services on specified cluster trains for a five-year term, extendable by two years.

The appellant emerged as the successful bidder and was issued a Letter of Commencement on 31-08-2024. Thereafter, the agreement relating to Part B services came into force on 12-09-2024 and was to remain valid until 11-09-2029.

However, disputes arose between the parties where the appellant raised grievances and complaints regarding presence of unauthorized food venders on the train. Subsequent to which, IRCTC terminated the license in May 2025, citing persistent passenger complaints relating to food quality, hygiene, over-charging and service deficiencies.

Challenging the termination, the caterer approached the High Court under Section 9 of the Arbitration and Conciliation Act and obtained interim protection, allowing it to continue services temporarily.

The petition was later dismissed, and the disputes were referred to arbitration. The Sole Arbitrator in Delhi International Arbitration Centre (DIAC) subsequently refused to stay the termination, observing that restoration of a terminated catering contract at the interim stage was neither warranted nor was in public interest.

The bench noted, “This Court finds no perversity or illegality in the aforesaid finding of the learned Arbitrator, and the same is a plausible view in the facts and circumstances of the present case. This Court also finds merit in the contention of the respondent that the Court would not direct continuation of an arrangement under an agreement which stands terminated. The legality of the termination of the contract by the respondent would be a matter to be determined and adjudicated in the arbitration proceedings…”.

Consequentially, holding that courts cannot direct continuation or revival of a terminated, determinable contract at the interim stage, the High Court, thus, dismissed the appeal. It further clarified that the legality of the termination would be examined during the arbitral proceedings and that its observations would not influence the final outcome.

Cause Title: M/S R. K. Associates and Hoteliers Pvt. Ltd. v. Indian Railway Catering and Tourism Corporation Limited (IRCTC) 2026:DHC:459

Appearances:

Appellant: Sandeep Sethi and Sudhir Makkar, Sr. Advs. with Jasmeet Singh, Mahinder Singh Hura, Saif Ali, Pushpendra S. Bhadoriya, Vijay Sharma, Krisna Gambhir, Shreya Sethi, Riya Kumar, Akhilesh Kumar, Aadhya Shrotriya, Sanya C. Oberoi, Pranav Menon, Saurav and Ajith Willyams, Advocates

Respondents: Saurav Agrawal and Rajat Malhotra, Advocates with Saksham Gupta, Madhu K. Singh, Kiran Devrani, Anshuman Chowdhary, Nikita Rathi and Parmeet Singh, Advocates