Logistics

Cox & Kings can seek damages from IRCTC: Apex court

Our Bureau New Delhi | Updated on March 12, 2018

The Supreme Court said that the right to run the luxury train Maharaja Express rests with Indian Railway Catering and Tourism Corporation Ltd (IRCTC).

It, however, said Cox & Kings Ltd — whose joint venture and MoU to operate the luxury train was terminated by IRCTC — could seek damages for breach of any of the terms and conditions.

The apex court also gave both the parties the liberty to appoint an Arbitral Tribunal to settle their disputes.

The IRCTC had terminated the joint venture between both the parties to operate the luxury train on account of various reasons and, in particular, on account of non-payment of dues by Cox & Kings.

The court was hearing a Special Leave Petition filed by Cox & Kings.

In the order, the court observed that, “It is no doubt true that Cox & Kings 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 Maharaja Train operations were not profitable during the initial period when Cox & Kings was managing the train. IRCTC felt that the train could be run profitably and took over the train’s control. This led to a dispute between the two parties and the matter went to the Delhi High Court and then to the apex court.

The apex court, in its order, noted, “As pointed out by the Division Bench of the High Court, Cox & Kings was not entitled to question such termination as by itself it had no existence as far as the running of the train was concerned..”

It added, “As rightly pointed out by the Division Bench of the High Court, Cox & Kings remedy, if any, would lie in an action for damages against IRCTC for breach of any of the terms and conditions of the joint venture agreement and the MoU.”

The apex court also said the observations of the High Court and those made by it shall not influence the outcome of the arbitral proceedings, if resorted to by the parties.

Following the High Court order, IRCTC had taken charge of the train and the company offered the same services at lower charges.

arun.s@thehindu.co.in

mamuni@thehindu.co.in

Published on July 06, 2012

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