Supreme Court Dismisses plea against Maharaja Express

Supreme Court of India has dismissed a petition by travel company Cox and Kings challenging the termination of a lease arrangement by IRCTC for running luxury train Maharaja Express by a joint venture company.

An apex court bench of Justice Altamas Kabir and Justice J. Chelameswar while dismissing the petition left it to Cox and Kings and Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) to take recourse to arbitration for the resolution of the dispute.

The court said that in the event of the matter going before an arbitral tribunal, the arrangements made by the Delhi High Court for the running of the train by IRCTC would be subject to the outcome of arbitration proceedings.

Justice Altamas Kabir said: “Taking into consideration the totality of circumstances, we are inclined to agree with the suggestions which had been made by IRCTC before the division bench of the high court regarding the operation of the train by IRCTC, with liberty to the parties to appoint an arbitral tribunal to settle their disputes.”

The court said: “We, therefore, dismiss the special leave petition, but making it clear that if an arbitral tribunal is appointed, the aforesaid arrangement will be subject to the decision of the arbitral tribunal.”

Pointing to the contention by Cox and Kings of having made huge investment in the project, the judgment said; “It is no doubt true that the petitioner has invested large sums of money in the project, but that cannot entitle it to pray for and obtain a mandatory order of injunction to operate the train once the lease agreement/arrangement had been terminated.”

The court said that no order was required to be passed on the contempt petitions and same were also dismissed.

The arrangement as accepted by the high court provided that the Maharaja Express would be run by IRCTC and all the material in the possession of the Cox and Kings including crockery and furnishings be handed over to IRCTC for operating the train.

The arrangement provided for the opening of a separate account from which expenditure would be funded. The all on board or off board expenses of the operations would be met from this account. The travel company would hand over all the bookings to IRCTC so that those bookings could be honoured.

The Maharaja Express commenced its operations March 20, 2010 and completed four journeys in the inaugural runs till March 31, 2010. Another 30 journeys were undertaken between April 2010 to April 2011.

While the joint venture operations were being conducted by Royale India Rail Tours Ltd., certain disputes arose between the shareholders regarding the working of the joint venture agreement and the memorandum of understanding, which ultimately resulted in the termination of the lease arrangement by the IRCTC, by its letter Aug 12, 2011.