Ak Interior and Exterior Associates Vs Indian Oil Corporation Limited and 5 Ors.

¶1

GAHC010182852024

¶2

IN THE GAUHATI HIGH COURT

¶3

(HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH) PRINCIPAL SEAT

¶4

W.P(C) NO. 4550/2024

¶5

AK Interior & Exterior Associates, represented by its sole proprietor, Mr. Abdul Motin, aged 32 years (IOCL Vendor Code 13250005), having place of business at South Sarania, Ashram Road, Ulubari, near Sarania Majjid, Guwahati, PIN-781007, Assam ,

¶6

……..Petitioner

¶7

- Versus -

¶8

1. Indian Oil Corporation Limited A Government of India Enterprise, having its Registered office at G-9, Ail Yavar Jung Marg, Bandra (East) Munbai-400 051 and having its state office at Indian oil Bhawan, Sector-III, Noonmati, Guwahati-781020 (Assam)

¶9

2. The Chairman, Indian Oil Corporation Limited, G- 9, Ail Yavar Jung Marg, Bandra (East) Mumbai- 400 051

¶10

3. The General Manager (Engineering), Indian OilAOD SO, Indian Oil Corporation Limited, Indian Oil Bhawan, Sector-III, Noonmati, Guwahati-781020 (Assam)

¶11

4. Manager (Contracts), ERO, Indian Oil Corporation Ltd. (MD), 9^th Floor Central wing, Indian Oil Bhawan, 2, Gariahat Road (South), Dhakuria, Kolkata-700068

¶12

Page 1 of 33

¶13

5. Investigation Committee (formed for investigation of incident at M/S Jai Hanuman Filing Station under Silchar Ro), Indian Oil-AOD, Indian Oil Corporation Limited, N.S. Avenue, Silchar, Cachar, PIN 788005, Assam

¶14

6. Assistant Manager (Engineering), Indian OilAOD, Indian Oil Corporation Limited, N.S. Avenue, Silchar, Cachar, PIN- 788005, Assam

¶15

…….. Respondents

¶16

– B E F O R E –

¶17

HON’BLE MR. JUSTICE SOUMITRA SAIKIA

¶18

Advocate for the petitioner	:Mr. G.N. Sahewalla, Sr. Advocate assisted by Ms. S Todi, Advocate
Advocate for the respondents	:Mr.N. Baruah, Standing Counsel, IOCL
Dates of Hearing	:10.04.2025 & 02.05.2025
Date of Judgment & Order	:06.08.2025

¶19

JUDGMENT AND ORDER (CAV)

¶20

This writ petition is filed by the petitioner who was an empanelled Contractor with the respondent Corporation under the Silchar D.O. The writ petitioner is a proprietorship concern having its office at South Sarania, Asshram Road, Ulubari, Guwahati. The petitioner is a registered vendor and is an enlisted contractor with the respondent Corporation bearing vendor code 13250005. The petitioner in the past had successfully executed several contracts with the respondent Corporation and on each occasion, the petitioner

¶21

had duly executed the work to the satisfaction of all concerned. The

¶22

petitioner states that in the year 2021, the Manager (Contract), ERO,

¶23

Page 2 of 33

¶24

IOCL (MD), Indian Oil Bhawan, Gariahat, Kolkata namely respondent No. 4 had issued an NIT for “Rate Contract (for value of works up to Rs. 30 Lakh) for carrying out capital and revenue works at Retail Outlets (including KSKs), consumer outlets, Depots, Terminals, Lube and LPG plants, Aviation Fuelling Stations, Buildings etc. under Indian Oil-AOD State Office” bearing e-tender No. RCC/ERO/37/2020-21/PT-108. The said NIT was issued for empanelment of contractors of Guwahati DO, Tinsukia DO, Silchar Do and Imphal DO. The petitioner concerned being eligible participated in the e-tender process and submitted requisite documents as per Bid Documents and also submitted rates in respect of the tender. The bid of the petitioner concern and the rates quoted by the petitioner concern was selected and the petitioner concern was empanelled for Silchar DO amongst others for a period of two years by issuing a letter of intent being LOI No. RCC/ERO/39/2020-21/792 dated 12.03.2021.

¶25

2. It is submitted that after being empanelled, the respondent authorities issued work orders to the empanelled contractors regarding various civil and constructions works within the respective ROs. The present proceedings relate to the issuance of work order in respect of “fabrication and errection of canopy of size 16x8 Sq Mtr and constructions paver block and Jai Hanuman Filling Station” for an

¶26

Page 3 of 33

¶27

amount of Rs.18,35,934.96/-. The petitioner was issued work order vide work order No. 28177360 dated 22.09.2022. In the said work order, the schedule of rates and the work specification was clearly mentioned. It is submitted that the petitioner completed the concerned works and handed over site to the respondent authorities by giving complete possession on 20.01.2023. The completion certificate cum final bill raised have been finally received pertaining to the said work upon being issued the completion certificate by the respondent authorities.

¶28

3. It is submitted that in the month of April 2024, the petitioner was contacted by the respondent authorities and was informed that the canopy which was constructed by the petitioner had collapsed due to bad weather and as such the petitioner concerned was required to give in writing as to whether the work was properly executed or not. The petitioner thereafter intimated the respondent authorities that the work was properly executed and the site was handed thereafter. It is also intimated that the owner of the filling station had repaired the canopy recently. However, although the respondents were intimated in writing, the petitioner concerned was shocked to receive a show-cause notice bearing No. IO AOD SO/ENGG/Show Cause/24-25/AK-01 dated 27.05.2024. In the said

¶29

show cause notice the petitioner was accused of using sub-standard

¶30

Page 4 of 33

¶31

materials for construction of canopy which caused serious security and safety lapses and thereafter sought reasons as to why the petitioner should not be placed on the “Holiday list” and thereafter debar the petitioner concerned from entering into contracts with the respondent authorities and further also delist the petitioner concerned as per the provisions of Clause 2.1.a and Clause 2.1.g of the Holiday listing guidelines.

¶32

4. It was stated in the show cause notice that on 04.04.2024 the canopy constructed by the petitioners concerned was shaken in heavy thunderstorm and the sales in the retail outlet were suspended. Again on 20.04.2024, the canopy structure (ceiling, roofing) got detached from the canopy columns and had collapsed which caused damaged to the structure and the RVI. It is further stated therein that a three member investigation committee was formed comprising of corporation officials to ascertain reasons for collapse of the canopy at site namely the retail outlet-M/S Jai Hanuman Filling Station (326749) under Silchar DO. In the investigation, certain lapses were found on the part of the petitioner concerned.

¶33

5. Upon receipt of the show cause notice, petitioner sought time

¶34

for reply. Thereafter, the petitioner was filed its reply on 16.06.2024.

¶35

Page 5 of 33

¶36

In the said reply, the petitioner denied all allegations mentioned in the show cause notice. It was stated that the three member investigation committee was comprised of officials of the respondent organization and no independent investigation was undertaken by any competent authority. The petitioner denied the charges of usage of sub-standard materials and/or non-standard materials for construction. It was stated that the materials used were from accepted brands and this was indicated in the bids raised which were duly settled by the respondent authorities. The TPI reports and the test reports of the raw materials also suggest the same. It was further stated that in the show cause itself it was mentioned that during the relevant point in time that is April, 2024, Silchar Town was hit by extreme rough weather and there are numerous reports of the entire Silchar Town being affected by the extreme weather conditions and trees were uprooted, and the ceilings and roofs of houses were being destroyed and blown to a distance etc. In such extreme weather conditions, pointing fingers at the petitioner only cannot be accepted to be fair especially when the show cause notice itself reveals cause of collapse as extreme weather/thunderstorms. Consequently, the “Holiday Listing” of the petitioner company under Clause 2.1.a and Clause 2.1.g is not justified and totally uncalled for.

¶37

Page 6 of 33

¶38

6. The learned Senior counsel for the petitioner submits that pursuant to the reply submitted, the petitioner requested for a personal hearing in the matter but no hearing took place. Thereafter, the respondent No. 3 issued the communication bearing No. IOAODSO/ENGG/HL/24-25/AK-01 dated 22.08.2024 whereby the petitioner concerned was put to “Holiday List” for a period of two years, the reasons cited were usage of sub-standard materials by the petitioner which was found to be questionable authenticity in the third party inspection report. According to the respondents the photographs attached to the reply of the writ petitioner could not dispel the allegation of poor welding. No records regarding deviation of design and fabrication has been found during the inspection carried out by the IOCL officials. Similarly several other deficiencies were highlighted in the order dated 22.08.2024.

¶39

7. The learned Sr. Counsel for the petitioner submits that while “Holiday Listing” the petitioner, the respondent No. 3 disbelieved the third party inspection report and relied entirely on the report and findings of the departmental investigation committee. It is submitted that the report of the investigation committee is based on a structure which has already collapsed and which was severely damaged due to thunderstorm. It is submitted that in the concerned filling station where the canopy was erected and was handed over to the IOCL/the

¶40

Page 7 of 33

¶41

owner and pursuant thereto some repairs were carried out by the owner itself without involving the petitioner. However, the third party inspection report disbelieved by the respondent authorities was carried out at the time of construction during the work in progress. As such, the action of the respondent authority in disbelieving the third party inspection report is absolutely arbitrary as the respondent authorities had placed relied only upon the departmental investigation committee and completely disregarded the third party report which was an authorized forum for investigation and requisitioned by the respondents themselves. It is submitted that the report of the departmental investigation committee is prepared unilaterally without giving an opportunity of the writ petitioner being heard and therefore, the respondent No. 3 arbitrarily passed the impugned order disbelieving the reports and the documents submitted by the petitioner. It is therefore submitted that the respondent authority had proceeded with the inspection and the show cause with a pre-determined attitude to hold only the petitioner responsible which is totally uncalled for and is without any basis. It is submitted that had there been any deficiencies noticed after the petitioner completed and handed over the work, the respondent authorities would not have cleared the bills raised by the petitioner. No allegation of deficiency of service in respect of the writ petitioner

¶42

Page 8 of 33

¶43

was raised at the relevant point in time. It is submitted that the finding of the departmental investigation committee that the petitioner had used sub-standard materials and/or that the welding carried out by the petitioner was deficient or was below standard could not have been concluded without sending the materials for proper laboratory test and reports. It is submitted that the unilateral investigation carried on by the respondent without affording any opportunity to the writ petitioner and placing the petitioner concerned in the Holiday List has far-reaching and grave civil consequences and therefore, the unilateral action of the respondent authorities in issuing the impugned order of Holiday Listing of the writ petitioner needs to be interfered with set aside and quashed.

¶44

8. The learned Senior counsel submits that there is a Holiday Listing guidelines issued by the IOCL and in terms of the Clause 2 of the said guidelines, there are various instances which reflect the circumstances under which a party can be placed in the Holiday List. It is submitted that the reasons cited for placing the petitioner in the Holiday List does not fall within the reasons specified in the Holiday Listing guidelines more particularly at Clause 2.1 onwards. It is submitted that there is no malpractice such as bribery, corruption, fraud, pilferage, rigging etc resorted to by the petitioner causing injury to the property of the IOCL or acting dishonestly causing

¶45

Page 9 of 33

¶46

wrongful financial loss to IOCL or that the petitioner submitted any fake, false, fabricated or forged documents or had used materials in lieu of material supplied by IOC or has not returned or short returned or unauthorisedly disposed of materials, documents, drawing, tools or plants or equipments supplied by IOC or had engaged in construction and erection of defective works or supply of defective materials etc. It is submitted that none of the clauses mentioned in Clause 2.1 of the Holiday Listing guidelines are applicable in respect of the writ petition to place the writ petitioner under Holiday Listing. Such action on the part of the respondents expose the high handedness of the respondent authorities which are completely arbitrary and therefore the constitutional rights of the writ petitioner have been violated requiring the petitioner to approach this Court and praying for appropriate writ direction or order.

¶47

9. The learned Sr. counsel for the petitioner therefore submits that the impugned order dated 22.08.2024 issued by the respondent No. 3 placing the petitioner on Holiday Listing should be interfered with, set aside and quashed and further not to give effect to the findings of the three members investigation committee constituting of the officials of the corporation. In support of his contentions the learned Sr. counsel for the petitioner has referred to and relied on the following Judgments:

¶48

Page 10 of 33

¶49

Raghunath Thakur Vs. State of Bihar and Ors, reported in (1989) 1 SCC 229

¶50

UMC Technologies Private Limited Vs. Food Corporation of India and anr. Reported in (2021) 2 SCC 551;

¶51

State Bank of India and ors. vs Rajesh Agarwal and Ors., reported in (2023) 6 SCC 1;

¶52

Daffodills Pharmaceuticals Ltd. Vs State of Uttar Pradesh and anr., reported in (2020) 18 SCC 550;

¶53

Assistant Commissioner of State Tax and Ors. Vs. Commercial Steel Limited, reported in (2022) 16 SCC 447 and

¶54

Isolators and Isolators Vs. Madhya Pradesh Madhya Kshetra Vidyut Vitran Co. Ltd. and anr., reported in (1989) 1 SCC 229

¶55

10. The learned Sr. counsel for the petitioner has strenuously urged by placed reliance on the Judgments and the authorities that the effect of “Holiday Listing” of the writ petitioner amounts to blacklisting the writ petitioner. Such blacklisting has serious civil consequences and therefore, it was incumbent on the respondent authority to grant the petitioner a personal hearing and also allow the petitioner to submit necessary documents at the time of hearing

¶56

in support of his case. The basic principle espoused under the audi

¶57

Page 11 of 33

¶58

alteram partem principle has been violated by the respondents. The respondents had constituted a three member committee and have returned a finding with a pre-determined mind to issue the impugned order putting the petitioner under Holiday Listing. The learned Sr. counsel therefore submits that the writ petition be allowed. The impugned order dated 22.08.2024 as well as the report of the three member investigation committee be interfered with, set aside and quashed.

¶59

11. The respondents have contested the matter by filing their affidavit. The respondent counsel submits that the petitioner was given the works for “fabrication and errection of canopy of size 16x8 Sq Mtr and constructions paver block and Jai Hanuman Filling Station” and in view of the collapse of the said canopy in the thunderstorm which caused losses to the corporation as well as to the owner of the retail outlet, a committee comprising of three officials was constituted to investigate into the matter. Upon due investigation, the report reveal that there was deviation from the original client which was resorted to by the petitioner and which deviation was caused without due permission.

¶60

12. It is further submitted that the materials used were found to be of sub-standard quality and various deficiencies were found upon

¶61

Page 12 of 33

¶62

examination on the site in respect of the execution of the works undertaken by the petitioner like welding and erection of the post etc. The petitioner was given ample opportunity to explain as to why steps for putting the petitioner under Holiday List will not be proceeded with. The petitioner filed a detailed reply and upon careful examination of the reply that the authorities have come to a conclusion that there was indeed deficiencies in respect of the writ petitioner and consequently steps were taken to put the petitioner under Holiday Listing after giving adequate opportunity of being heard. It is submitted that under the guidelines there is no procedure for personal hearing to be granted to the petitioner. That apart, there is a provision for an appeal and a review which the petitioner could have opted for instead of filing the present writ petition. It is further submitted that Holiday Listing is for a specific period and delisting from the Holiday List after expiry of the Holiday period will be automatic and does not require any approval. Under such circumstances, there are no violations of the Rules and regulations and the procedure adopted by the respondents is entirely as per the procedure prescribed.

¶63

13. It is further submitted that personal hearing is not always required to be offered and more particularly where the petitioner has been put to notice and sufficient opportunity was given to the

¶64

Page 13 of 33

¶65

petitioner to explain as to why the petitioner should not be brought into the Holiday Listing. There is no prejudice caused to the petitioner and therefore no personal hearing is called for as the same is not prescribed under the Rules. The learned counsel for the respondents submits that where the challenge to Holiday Listing is made by the petitioner on the ground of causing prejudice as it will have adverse effect of its business prospects; judicial review ought not to be allowed to be invoked in order to protect its personal interest at the cost of public interest or to decide contractual disputes. Since there are adequate provisions for the petitioner to ventilate his grievances like filing an appeal or review, this writ petition does not have any merit and the same should be dismissed as not maintainable. In support of his contentions, the respondents relied upon the Judgments of the apex Court rendered in Carborundum Universal Ltd. Vs Central Board of Direct Taxes, reported in (1989) Supp (2) SCC 462; Union of India and Anr. Vs. Jesus Sales Corporation, reported in (1996) 4 SCC 69 and Patel Engineering Ltd. Vs. Union of India & anr., reported in (2012) 11 SCC 257.

¶66

14. The learned counsel for the parties have been heard. Pleadings available on record have been carefully perused. Judgments cited at the bar have also been carefully noted.

¶67

Page 14 of 33

¶68

15. The facts which are not in dispute are that pursuant to the Letter of Intent issued to the petitioner for “fabrication and errection of canopy of size 16x8 Sq Mtr and constructions paver block and Jai Hanuman Filling Station”, the petitioner undertook the work and the work was duly completed and the petitioner was also granted completion certificate. Thereafter the final bills were also released. Pursuant to extreme weather conditions in the vicinity of the Silchar Town in which the retail outlet was located, the ceiling collapsed causing loss of business to the retail outlet. The respondent authorities thereafter undertook the investigation by constituting a departmental investigation committee comprising of three officers and issued a show cause to the petitioner asking the petitioner to show cause as to why petitioner should not be put in the Holiday List. The petitioner submitted his reply in his defence. The respondent authorities however were not persuaded to accept the explanation of the petitioner. Consequently, the impugned order dated 22.08.2024 was passed putting the petitioner in Holiday List. The question raised before the Court is whether while putting the petitioner company in the Holiday List notwithstanding the show cause notice being issued to the petitioner, whether personal hearing is also required to be given. It is to be mentioned here that although

¶69

the respondents did not “blacklist” the petitioner, however, the

¶70

Page 15 of 33

¶71

effect of putting the petitioner on Holiday List will certainly have adverse civil consequences as the petitioner will not be able to participate in the tenders floated by the respondent authority till the time the petitioner is placed in the Holiday List. That apart, as urged by the petitioner, the effect of putting the petitioner in Holiday List will debar him from participating in other public sector undertakings as such undertakings will refuse to award contracts to the petitioner in view of the said petitioner being put on Holiday List for the reasons cited. Therefore, in effect, it amounts to blacklisting the writ petitioner for the specific period of time as indicated.

¶72

16. In order to decide the issue in question, it is necessary to refer

¶73

to the Holiday Listing guideline issued by the IOCL, the relevant portions of the guidelines are extracted below:

¶74

1. Definitions:

¶75

a) Blacklisting/Holiday listing/Debarment/Banning :

¶76

The meaning of “blacklisting”, “holiday listing”, “debarment” and “banning” is legally one and the same. Hence hereafter the subject matter shall be referred as “Holiday listing:” only.

¶77

b) “ Approving Authority ” for holiday listing shall mean Refinery Head/Functional Head/Regional Head/ State Head/Departmental Head, not below Grade H. However, for placing a party on holiday for a period in excess of 2/3 years, Functional Director concerned shall be the Approving Authority.

¶78

c) “ Appellate Authority ” shall be one rank higher than the Approving Authority.

¶79

d) “ Corporation ” means Indian Oil Corporation Limited (IOCL) with its Registered Office at G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai- 400 051.

¶80

e) “ Party ” shall include Licencor/Consultant/ Contractor/ Vendor/ Bidder/ Supplier/ Agency/ Seller/ Sub-Vendor/ Sub-contractor/ Sub-

¶81

Page 16 of 33

¶82

consultant” and shall mean and include a public limited company or a private company or a Limited Liability Company, a Joint Venture, consortium, HUF, a firm whether registered or not, an individual, cooperative society or an association or a group of persons engaged in any commerce, trade, industry etc.

¶83

f) “ Trasgression ” and “ Integrity Pact” shall be as per the definition and details of Integrity Pact Policy as maintained on www.iocl.com

¶84

g)“Administrative Ministry” is Ministry of Petroleum & Natural Gas, Government of India

¶85

2. Reasons for putting a Party on Holiday:

¶86

2.1 The purpose of putting a party on holiday list is to protect the Corporation from dealing with an undesirable party. Reason for putting a party on holiday list may include any one or more of the following:

¶87

If a party

¶88

a) has indulged in malpractices such as bribery, corruption, fraud, pilferage, bid rigging/price rigging, injury to reputation or property of the Corporation, acting dishonestly causing wrongful financial loss to the Corporation or wrongful gain to the Party.

¶89

b) is bankrupt or insolvent or is being dissolved or has resolved to be wound up or proceedings for bankruptcy or liquidation or Insolvency resolution process or winding up or dissolution have been initiated

¶90

c) has submitted fake, false, fabricated, or forged documents/ certificates

¶91

d) has substituted materials in lieu of materials supplied by IOCL or has not retuned or has short retuned or has unauthorizedly disposed off materials/ documents/ drawings/ tools or plants or equipment supplied by IOCL.

¶92

e) has obtained official company information or copies of documents, in relation to the tender/ contract, by questionable methods/ means.

¶93

f) has violated and circumvented the provisions of laws including labor laws/ regulations/ rules, safety, environment norms or other statutory requirements.

¶94

g) has indulged in construction and erection of defective works or supply of defective materials

¶95

h) has not cleared IOCL's dues ,

¶96

i) has committed Breach of Contract or has failed to perform a contract or has abandoned the contract

¶97

j) has not accepted Notice of Acceptance / Letter of Acceptance / Purchase Order / Work Order after the same is issued by IOCL within the validity period and /or as per agreed terms & conditions.

¶98

Page 17 of 33

¶99

k) After opening of Bid, the techno-commercially qualified and acceptable bidder withdraws / revises his bid upwards within the validity period.

¶100

l) has parted with, leaked or provided confidential/ proprietary information of IOCL to any third party without prior consent of IOCL

¶101

m) if the security consideration, including questions of loyalty of the party to the State, so warrants

¶102

n) if the Director/ Owner of the party, proprietor or partner of the party is convicted by a Court of Law under process of law for offences involving moral turpitude in relation to its business dealings during the last five years.

¶103

o) If the party uses intimidation/ threatening/ coercion or brings undue pressure on IOCL or its official(s) in acceptance/ performances of the job under the contract.

¶104

p) Poor/ unsatisfactory performance of the party in one or several contracts.

¶105

q) Transgression of Integrity Pact for which in the opinion of IOCL makes it undesirable to deal with the party.

¶106

r) Based on the findings of the investigation report of any investigative agency, Government Audit, any law enforcement agency or government regulator.

¶107

s) If CBI, or any other investigating agency(ies) recommends such a course along with credible evidence in respect of a case under investigation and if a prima-facie case is made out that the party is guilty of criminal negligence or an offence involving moral turpitude in relation to business dealings which if established may result in business dealing with it being banned.

¶108

t) Any other ground which in the opinion of the Corporation makes it undesirable to deal with the Party.

¶109

Note: The grounds/ reasons for holiday listing indicated above are merely illustrative.

¶110

2.2. Communication by Administrative Ministry to IOCL :

¶111

a) If a communication is received from the Administrative Ministry of IOCL to ban a party from dealing with IOCL, the party shall be automatically put on Holiday list.

¶112

b) Holiday listing by other PSUs/ Government Departments shall not automatically extend to IOCL unless the Administrative Ministry of IOCL advises for the same

¶113

c) Where a Ministry seeks to debar a Vendor across Ministries/ Departments, they will write to Deptt of Expenditure (DoE), who, in turn, will take action after due diligence at their end. In case DoE

¶114

Page 18 of 33

¶115

takes a decision to debar a Vendor across Ministries/Departments, DoE will maintain list of such debarred firms, and display on the Central Public Procurement Portal. This list needs to be followed by all and can be accessed from the CPP Portal (present address: https://eprocure.gov.in/eprocure/app).

¶116

3. Show Cause Notice :

¶117

a) Before placing the party on holiday list, a fair opportunity of hearing the party shall be given by means of a Show Cause Notice. The Show Cause Notice should be issued to the Party before placing the party on holiday list except for cases under Cl 2.2.

¶118

b) A proforma of the Show Cause Notice is enclosed Attachment- 1 . A reasonable time (of 15 days) for a reply to the show cause notice shall be given. This time may be extended at the request of the party, if so warranted, for a period not exceeding 7 days.

¶119

c) The Show Cause Notice shall be issued to the party and a copy may be endorsed to its CEO (Chairman/ President/ Managing Director/ Proprietor/ Managing Partner etc.)

¶120

d) The decision to place the party on holiday list shall be taken considering the reply, if any, of the party, and by passing a reasoned Speaking Order in respect of all the allegations contained in the Show-Cause notice.

¶121

4. Effect of putting a party on holiday list :

¶122

4.1 No enquiry/ bid/ tender shall be issued to a party as long as the party’s name appears on the current holiday list (i.e. within the holiday period).

¶123

4.2 if a party is put on holiday list during tendering (of works/ purchase):

¶124

4.2.1 If a party is put on holiday after issue of the enquiry/ bid/ tender but before opening Technical bids, the EMD, if applicable, shall be returned to the party.

¶125

4.2.2 If a party Is put on holiday after opening technical bid but before opening the price bid, the price bid of the party shall not be opened and EMD submitted by the party shall be retuned to the party. –

¶126

4.2.3 In case a party is put on holiday after opening of price bid, EMD made by the party shall be retuned; the offer of the party shall be ignored & will not be further evaluated. The party will not be considered for issue of order even if the party is the lowest (L1). In such situation next lowest shall be considered as L1.

¶127

Page 19 of 33

¶128

4.3 if a party is put on Holiday List and is performing/ executing any other job(s), it may be allowed to complete such works which have already been awarded. In case of ongoing Rate Contracts on single vendor, Call Up orders shall be allowed on the holiday listed vendor till a new Rate Contract is finalized. In case of availibility of Multiple Vendors against Rate Contract/ Unit Rate contract, the holiday listed Vendor shall be allowed to complete such works for which Call up orders have already been placed. Fresh Call Up orders shall not be awarded once the Vendor is holiday listed.

¶129

4.4 The holiday listing shall be party specific & when the party is put on holiday, all the offices of the party shall be on holiday for ail locations of IOCL & for all Services/ locations of the party. The Functional Director may however, if he considers this to be in the interest of the Corporation, remove the bar in respect of any specific service/ location.

¶130

If the party placed on holiday, is a proprietary cocern, all the concerns of the same proprietor shall also be considered to be on holiday and if that proprietor is the partner of any firm, such firm shall also be considered to be on holiday.

¶131

In case where a joint venture (formed specifically for the bidding process) / consortium is debarred, ail partners of the joint venture / consortium shall stand debarred for the period specified in the debarment order. Communication of holiday listing shall be sent to all the partners.

¶132

4.5. Removal of party from Approved/ Registered list, wherever Approved/ Registered list of parties are followed.

¶133

5. Delisting (from Holiday list) procedure after expiry of the holiday period :

¶134

5.1. Delisting (from Holiday list) after expiry of the holiday period shall be automatic and will not need further approval unless any information towards extension of holiday period is received. The party may be considered for issue of enquiry/ bid after the specified holiday period is over.

¶135

5.2. However, where Approved/ Registered list of parties are followed, the party may, after expiry of holiday period, approach relevant Tender/ Enquiry issuing Authority, for getting itself re-listed. 6. Appeal and Review of holiday period (Delisting from holiday list within the holiday period) :

¶136

a) Appeal

¶137

The holiday listed party may file an appeal along with a nonrefundable fees of Rs. 10,000, before th ‘Appellate Authority’

¶138

Page 20 of 33

¶139

against the Speaking Order for Holiday Listing. Non-refundable fees to be paid by the way of a Demand Draft in favor of Indian Oil Corporation Limited. Such an appeal shall be preferred within one month from the date of the Holiday Listing Order.

¶140

Appeal Process may be completed within 60 days of filing of appeal with the Appellate Authority.

¶141

b) Review :

¶142

Suo moto, review of holiday period (delisting from holiday list within the holiday period) shall be done in exceptional cases and in the interest of the Corporation only with the approval of the Appellate Authority.

¶143

............
.............
............

¶144

10. Declaration of Holiday Listing

¶145

Every Bidder shall, at the time of submission of bid, give a declaration in the proforma of the Declaration attached as Attachment-2”

¶146

17. A perusal of the Guidelines reveal that the effect of Holiday listing as specified under Clause-4 reveal that no enquiry/ bid or

¶147

tender will be issued to the party as long as the party’s name appears in holiday list. Clause-10 provides that every bidder at the time of submission of the bid should give a declaration in the proforma of the Declaration as per the Attachment-2 as to whether

¶148

the petitioner has been placed under Holiday Listing. It is therefore seen that Holiday listing does carry civil consequences on the contractor and will have similar effect of blacklisting of a

¶149

18. This question has been addressed by the Apex Court in the Judgment which is pressed into service by the petitioner. In

¶150

Page 21 of 33

¶151

Raghunath Thakur Vs. State of Bihar & Ors, reported in (1989) 1 SCC 229, the Apex Court while addressing the issue of blacklisting of a contractor, held that blacklisting of any person in respect of business/ ventures will have civil consequences for the future business of the person concerned in any event. Even if the Rules do not expressly provide for, it is an elementary principle of natural justice that the parties affected by any order should have right of being heard and making representations against the order. This Judgment was based on the earlier precedent of the Apex Court rendered in Erusian Equipment & Chemicals Ltd. v. State of W.B., reported in (1975) 1 SCC 70. The relevant paragraph of the said Judgment is extracted below:

¶152

4. Indisputably, no notice had been given to the appellant of the proposal of blacklisting the appellant. It was contended on behalf of the State Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Insofar as the contention that there is no requirement specifically of giving any notice is concerned, the respondent is right. But it is an implied principle of the rule of law that any order having civil consequence should be passed only after following the principles of natural justice. It has to be realised that blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order. In that view of the matter, the last portion of the order insofar as it directs blacklisting of the appellant in respect of future contracts, cannot be sustained in law. In the premises, that portion of the order directing that the appellant be placed in the blacklist in respect of future contracts under the Collector is set aside. So far as the cancellation of the bid of the appellant is concerned, that is not affected. This order will, however,

¶153

Page 22 of 33

¶154

not prevent the State Government or the appropriate authorities from taking any future steps for blacklisting the appellant if the Government is so entitled to do in accordance with law i.e. after giving the appellant due notice and an opportunity of making representation. After hearing the appellant, the State Government will be at liberty to pass any order in accordance with law indicating the reasons therefor. We, however, make it quite clear that we are not expressing any opinion on the correctness of otherwise of the allegations made against the appellant. The appeal is thus disposed of.

¶155

19. Again in SBI Vs. Rajesh Agarwal & Ors., reported in (2023) 6 SCC 1, the Apex Court was considering the principles of natural justice in general and the principles of audi alterum partem in particular in matters of blacklisting or debarment which have civil consequences. The Apex Court held that the principles of natural justice are not mere legal formalities. They constitute substantive obligations that need to be followed by decision making and adjudicating authorities. These principles of natural justice act as a guarantee against arbitrary action both in terms of procedure and substance by judicial, quasi-judicial and administrative authorities. Two fundamental principles of natural justice are entrenched in Indian jurisprudence : (i) nemo judex in causa sua, which means no person should be a Judge in their own cause; and (ii) audi alteram partem, which means that a person affected by administrative, judicial or quasi-judicial action must be heard before a decision is taken. The courts generally favour interpretation of a statutory

¶156

Page 23 of 33

¶157

provision consistent with the principles of natural justice because it is presumed that the statutory authorities do not intend to contravene fundamental rights. The apex Court held that it is a settled principle of law that rule of audi alteram partem applies to administrative actions apart from judicial and quasi judicial functions. It is also the settled position in administrative law that it is mandatory to provide for an opportunity of being heard when an administrative action results in civil consequences to a person or entity. Every authority which has the power to take punitive or damaging action has a duty to give a reasonable opportunity to be heard. An administrative action which involves civil consequences must be made consistent with the rules of natural justice. The rule that a person to whose prejudice an order is intended to be passed is entitled to a hearing applies alike to judicial tribunals and bodies of persons invested with authority to adjudicate upon matters involving civil consequences. It is one of the fundamental rules of our constitutional set-up that every citizen is protected against exercise of arbitrary authority by the State or its officers. Duty to act judicially would therefore arise from the very nature of the function intended to be performed : it need not be shown to be super-added. If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power. If the essentials of justice be

¶158

Page 24 of 33

¶159

ignored and an order to the prejudice of a person is made, the order is a nullity. That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case. The apex Court held that the old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. The expression “civil consequences” encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations and nonpecuniary damages. In its wide umbrella comes everything that affects a citizen in his civil life.

¶160

20. In Isolators and Isolators Vs. Madhya Pradesh Madhya Kshetra Vidyut Vitran Co. Ltd., reported in (2023) 8 SCC 607, the Apex Court held that it would not be enough to put to a contractor concerned only on notice of debarment, without specifically putting it on notice on the issue of penalty. The apex Court held that Right to Hearing is specifically required on various issues particularly if the imposition of penalty is being proposed on the noticee.

¶161

21. The Judgment referred to by the petitioner rendered in UMC Technologies Pvt. Ltd. Vs. Food Corporation of India and Anr., reported in (2021) 2 SCC 551 is an authority for the proposition that

¶162

Page 25 of 33

¶163

the notice must specify the particular grounds on which an action is proposed to be taken to enable the petitioner to answer the case projected against him. However, a perusal of the show cause notice enclosed to the writ petition which is enclosed as Annexure-3 reflects that the lapses found by the committee are specifically mentioned and the action proposed to be taken on the petitioner is also explained. Therefore, the ratio of the Judgment rendered in this case need not be discussed as the question before this case is whether personal hearing is required in cases of blacklisting the petitioner or where civil consequences will fall on the petitioner.

¶164

22. In Daffodills Pharmaceuticals Ltd & Anr. Vs. State of Uttar Pradesh & Anr, reported in (2020) 18 SCC 550, the Apex Court held that no one can be inflicted with an adverse order, without being afforded a minimum opportunity of hearing, and prior intimation of such a move. In the facts of that case also it was held that while blacklisting the petitioner, an opportunity of hearing and the intimation of the move sought to be invoked by the authority considered was considered to be a prior requirement before passing order of blacklisting.

¶165

23. In Assistant Commissioner of State Tax and Ors. Vs. Commercial Steel Ltd., reported in (2022) 16 SCC 447, the Apex

¶166

Page 26 of 33

¶167

Court while considering the question of maintainability of a writ petition in the face of existence of an alternative remedy, it was held that existence of alternative remedy is not an absolute bar in maintainability of a writ petition. Writ petition can be entertained in

¶168

exceptional circumstances where there is:

¶169

(i) a breach of fundamental rights;

¶170

(ii) a violation of the principles of natural justice;

¶171

(iii) an excess of jurisdiction; or

¶172

(iv) a challenge to the vires of the statute or delegated legislation.

¶173

In these circumstances, there is no bar for a writ Court to entertain a writ petition notwithstanding the existence of alternative remedy.

¶174

24. Coming to the case laws referred to by the respondents, in State of Odisha and Ors, Vs. Panda Infra Project Ltd., reported in (2022) 4 SCC 393, the Apex Court while examining the orders passed for blacklisting for debarment held that where a high level enquiry was conducted and whereafter comprehensive report was submitted and the Government upon careful consideration of the report took a decision to blacklist the respondent contractor as per the provision of

¶175

the OPWD Code, a show cause notice was issued, the order of

¶176

Page 27 of 33

¶177

blacklisting was passed after considering the reply. The apex Court therefore held that the action initiated against the respondent contractor was not in a vacuum but after considering the enquiry report and after following the due procedure as required.

¶178

However the facts of the case in the above Judgment before the Apex Court are different than the present proceeding. Before the Supreme Court, the respondent was awarded a contract for construction of a flyover over the railway level crossing in a particular junction in Bhubaneswar. In pursuance to the said contract, the respondent contractor constructed the said flyover. In the year, 2017, a 10 meter slab of the flyover collapsed during concreting on the railway over bridge at the level crossing which resulted in loss of life and property. One person died and eleven others were injured. A high-level inquiry was conducted by the Chief Engineer (Design) and Chief Engineer (DPI and Roads). The committee submitted a comprehensive report after a detailed inquiry and found the respondent contractor therein guilty. It was found that the contractor did not submit the formwork design and adopted his own arrangement leading to collapse of such a huge structure during construction. Therefore in the case before the Apex Court in the facts of that case, the enquiry was pursuant to an accident which occurred

¶179

during construction of the flyover and certain lapses were found

¶180

Page 28 of 33

¶181

which can be attributed to the respondent contractor therein. Under such circumstances, the Apex Court held that personal hearing in all cases is not necessary where a detailed enquiry was conducted and the Government had taken a decision on the basis of the enquiry held.

¶182

25. In Nirma Industries Limited and Anr. Vs. Securities and Exchange Board, reported in (2013) 8 SCC 20, the Apex Court declined to accept the contentions of the appellants therein that personal hearing was required to be given before passing an order of blacklisting. The apex Court held that firstly the appellants or their merchant bankers did not request of an opportunity of a personal hearing. Secondly, the SEBI has not issued any instructions or directions under Section 11 of the Act, which requires that the rules of natural justice be complied with. Thirdly, it cannot be said that the appellants had been condemned unheard as the entire material on which the appellants were relying was placed before SEBI. It was under these circumstances, the claim of the contentions of the appellants that personal hearing is to be granted consequently rejected.

¶183

26. Coming to the facts of this case, it is seen that in response to the show cause notice in the reply which was submitted by the petitioner, it was mentioned that if the authority was not satisfied

¶184

Page 29 of 33

¶185

with the reply, a detailed review and site inspection could be conducted by any independent third party expert from IIT-Guwahati which will validate their claims and ensure an unbiased assessment. The collapse of the canopy was not during the process of construction undertaken by the petitioner. The contract was duly executed. It was handed over to the IOCL authorities/ Retail outlet owner and the completion certificate was also received. The payments required to be made to the petitioner have already been released and there is an averment that after due completion and handing over the works, the owner of the retail outlet had undertaken some repairs work at his own cost . There is no material placed before the Court by the IOCL authorities that prior to grant of completion certificate any detailed enquiry was conducted which revealed deficiencies in the constructions carried on by the petitioner.

¶186

It is only after the incident took place that an enquiry committee was constituted comprising of three officers of the IOCL authorities and they proceeded to conduct an unilateral enquiry and submit a report holding the petitioner to be guilty of deficiency of service. It is also seen from the pleadings that there was no report of any independent expert or laboratory report which has been referred to or relied upon by the respondent authorities that there was sub-standard material being used as have been alleged against the writ petitioner. These

¶187

Page 30 of 33

¶188

charges against the petitioner should have been confronted by a personal hearing granted to the petitioner company.

¶189

27. As have been held by the precedents discussed above, the principles of natural justice should be considered to be inherent in every judicial, quasi-judicial or even administrative orders. Ordinarily as a matter of principle, a show cause notice being issued to the person against whom action is contemplated may satisfy the rigors of the principle of natural justice. However, in the facts of the present case as have been discussed above, the incident occurred due to natural causes namely thunderstorm which hit the Silchar Town at the relevant period of time. There is no material before this Court to suggest that notwithstanding the severe thunderstorm which had affected the Silchar Town, the design or the technical specifications which are approved by the IOCL are sufficient to ensure that no such accident will occur even in cases of natural disasters like severe thunderstorms. The conclusion of the enquiry committee is that there was deviation from the design and uncertified materials being used by the petitioner. If that be so then how a completion certificate was issued to the petitioner and full and final payment pursuant thereto was by the IOC authorities. Whether any inspection was required to be undertaken in respect of construction prior to issuance of completion certificate is also not pleaded before this Court by either

¶190

Page 31 of 33

¶191

of the parties. Under such circumstances, where there are serious questions of facts in dispute in order to get to the root of the matter and hold the petitioner contractor responsible for any deficiency in service in respect of the incident which occurred well after the completion of the contract and after handing over of the site to the IOCL authorities/the owner of the retail outlet, a personal hearing was required to be afforded to the petitioner in the opinion of the Court. The conclusion and the findings of the committee- the investigating committee or enquiry committee and the authorities concerned are essentially matters which require proper verification by confronting its findings to the petitioner. However, such procedure was not followed by the respondent authorities and consequently the impugned Holiday Listing order was passed by the respondent authorities. The provision for an appeal or a review would not necessarily take care of the shortcomings which crept into the impugned order because of personal hearing not being granted prior to issuance of the impugned order. The authority which is reposed with the responsibility of conducting of hearing and passing an order in the first instance against the petitioner is required to examine the matter in great detail considering the technical specifications are in question and such orders being passed by the prescribed authority cannot be empty formalities. The authorities reposed with such

¶192

Page 32 of 33

¶193

responsibility must undertake independent finding on the report given by the enquiry committee. A bare perusal of the impugned order reflects that the authority merely relied upon the findings of the enquiry committee and rejected the reply furnished by the writ petitioner. This prima facie appears to the Court to be an order which was pre-determined to be passed by the concerned authority. Such action will not meet the requirements of natural justice as enshrined in law.

¶194

28. Under such circumstances, this Court is of the considered view that ends of justice will be met if the impugned order dated 22.08.2024 is interfered with and set aside and the matter is remanded back to the concerned authority to re-hear the matter upon giving an opportunity of personal hearing of the writ petitioner.

¶195

29. The writ petitioner will appear before the authorities concerned within 15 days from the date of receipt of a certified copy of this order and thereafter the authority concerned will re-hear the matter and thereupon pass appropriate orders.

¶196

30. The writ petition accordingly allowed to the extent indicated and disposed of. No order as to cost.

¶197

JUDGE

¶198

Comparing Assistant

¶199

Page 33 of 33

Ak Interior and Exterior Associates v. Indian Oil Corporation Limited and 5 Ors.

Case brief

What is this about?

What did the court decide?

Ak Interior and Exterior Associates v. Indian Oil Corporation Limited and 5 Ors.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

Similar cases

Zakaria Amanulla Choudhury Vs the State of Assam and 6 Ors.

Sanjay Das Vs the State of Assam and 5 Ors.

Sudha Sarma Vs North East Frontier Railway (Cons Organisation) and Anr.

Md. Muslim Ali Vs the State of Assam and 2 Ors.

MD Kurban Ali Vs J. B. Ekka IAS and Ors.

Dhanamanjuri Medhi Talukdar @ Dhan Manjuri Medhi Talukdar Vs J. B. Ekka IAS and Ors.