In a significant ruling affecting meal services on premium trains, the Supreme Court on Friday restored the arbitral award that had directed the Indian Railways Catering and Tourism Corporation (IRCTC) to reimburse private caterers fully for serving a second regular meal on Rajdhani, Shatabdi, and Duronto trains. The bench, led by Justice Sanjay Kumar, held that the Delhi High Court had overstepped by re-evaluating factual findings of the arbitrator, which is not permitted under the narrow scope of interference allowed in arbitration matters.
Background
The dispute dates back to a 2013 change in Indian Railways’ catering policy. Initially, caterers were to serve one regular meal and one smaller “combo meal.” However, after passenger dissatisfaction, the combo meal was discontinued and replaced with a full regular meal-without increasing the payment to caterers. Caterers like Brandavan Food Products continued to serve the larger meals but were reimbursed at the lower combo-meal rate.
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For years, the caterers raised complaints but continued raising invoices at the lower rate out of financial compulsion. Arbitration was later initiated, leading to an award in their favour: reimbursement of the difference for the second meal, plus payment for welcome drinks that caterers were made to supply gratis.
Court’s Observations
The Supreme Court took note of the surrounding circumstances: the caterers had bid for contracts based on earlier tariff structures, then found themselves compelled to supply more food for lower reimbursement. The Court acknowledged that the Railway Board itself had later accepted this discrepancy in its 2019 circular, advising that second meals should be paid at full regular meal rate.
“The bench observed, ‘Once IRCTC required caterers to serve a regular meal, reimbursement must match what is served. Payment cannot be made as if a smaller meal was supplied.’”
The Court criticized the High Court for stepping into the arbitrator’s shoes and re-interpreting contractual terms. It emphasized that arbitral awards should not be disturbed unless they are perverse or shock the conscience, which was not the case here.
However, the Court agreed with the High Court’s correction regarding interest. The arbitrator had granted a single lump-sum date for interest accrual, even though the claims would have arisen bill-by-bill. This, the Supreme Court held, required modification.
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Decision
The Supreme Court restored the arbitrator’s award granting reimbursement for the second regular meals and welcome drinks. However, the portion of the award granting interest from a uniform earlier date was set aside, requiring recalibration of interest from the date individual claims arose. The decision effectively reinstates financial relief for the caterers while maintaining consistency with principles governing interest in arbitration matters.
Case Title: Indian Railways Catering and Tourism Corporation Ltd. vs. Brandavan Food Products & Others
Court: Supreme Court of India
Bench: Justice Sanjay Kumar (Authoring Judgment)
(With concurring Bench)
Case Type: Civil Appeals (Arising out of Special Leave Petitions under Arbitration Act)
Case Numbers: Civil Appeal Nos. (arising out of SLP (C) Nos. 15507–15509 of 2025 and connected appeals)
Date of Judgment: 07-Nov-2025
