Gauhati High Court
WP(C)/4550/2024 on 6 August, 2025
Author: Soumitra Saikia
Bench: Soumitra Saikia
GAHC010182852024
IN THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
PRINCIPAL SEAT
W.P(C) NO. 4550/2024
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,
........Petitioner
-Versus-
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)
2. The Chairman, Indian Oil Corporation Limited, G-
9, Ail Yavar Jung Marg, Bandra (East) Mumbai- 400
051
3. The General Manager (Engineering),Indian Oil-
AOD SO, Indian Oil Corporation Limited, Indian Oil
Bhawan, Sector-III, Noonmati, Guwahati-781020
(Assam)
4. Manager (Contracts),ERO, Indian Oil Corporation
Ltd. (MD), 9th Floor Central wing, Indian Oil
Bhawan, 2, Gariahat Road (South), Dhakuria,
Kolkata-700068
Page 1 of 33
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
6. Assistant Manager (Engineering), Indian Oil-
AOD, Indian Oil Corporation Limited, N.S. Avenue,
Silchar, Cachar, PIN- 788005, Assam
........Respondents
-BEFORE-
HON'BLE MR. JUSTICE SOUMITRA SAIKIA
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
JUDGMENT AND ORDER (CAV)
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
had duly executed the work to the satisfaction of all concerned. The
petitioner states that in the year 2021, the Manager (Contract), ERO,
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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.
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
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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.
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
show cause notice the petitioner was accused of using sub-standard
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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.
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.
5. Upon receipt of the show cause notice, petitioner sought time
for reply. Thereafter, the petitioner was filed its reply on 16.06.2024.
Page 5 of 33
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.
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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.
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
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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
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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.
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
Page 9 of 33
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.
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:
Page 10 of 33
1. Raghunath Thakur Vs. State of Bihar and Ors, reported in
(1989) 1 SCC 229
2. UMC Technologies Private Limited Vs. Food Corporation of
India and anr. Reported in (2021) 2 SCC 551;
3. State Bank of India and ors. vs Rajesh Agarwal and Ors.,
reported in (2023) 6 SCC 1;
4. Daffodills Pharmaceuticals Ltd. Vs State of Uttar Pradesh
and anr., reported in (2020) 18 SCC 550;
5. Assistant Commissioner of State Tax and Ors. Vs.
Commercial Steel Limited, reported in (2022) 16 SCC 447
and
6. Isolators and Isolators Vs. Madhya Pradesh Madhya Kshetra
Vidyut Vitran Co. Ltd. and anr., reported in (1989) 1 SCC
229
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
in support of his case. The basic principle espoused under the audi
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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.
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.
12. It is further submitted that the materials used were found to be
of sub-standard quality and various deficiencies were found upon
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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.
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
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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.
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.
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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
the respondents did not "blacklist" the petitioner, however, the
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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.
16. In order to decide the issue in question, it is necessary to refer
to the Holiday Listing guideline issued by the IOCL, the relevant
portions of the guidelines are extracted below:
1. Definitions:
a) Blacklisting/Holiday listing/Debarment/Banning:
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.
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.
c) "Appellate Authority" shall be one rank higher than the
Approving Authority.
d) "Corporation" means Indian Oil Corporation Limited (IOCL) with
its Registered Office at G-9, Ali Yavar Jung Marg, Bandra (East),
Mumbai- 400 051.
e) "Party" shall include Licencor/Consultant/ Contractor/ Vendor/
Bidder/ Supplier/ Agency/ Seller/ Sub-Vendor/ Sub-contractor/ Sub-
Page 16 of 33
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.
f) "Trasgression" and "Integrity Pact" shall be as per the definition
and details of Integrity Pact Policy as maintained on www.iocl.com
g) "Administrative Ministry" is Ministry of Petroleum & Natural
Gas, Government of India
2. Reasons for putting a Party on Holiday:
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:
If a party
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.
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
c) has submitted fake, false, fabricated, or forged documents/
certificates
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.
e) has obtained official company information or copies of documents,
in relation to the tender/ contract, by questionable methods/
means.
f) has violated and circumvented the provisions of laws including labor
laws/ regulations/ rules, safety, environment norms or other
statutory requirements.
g) has indulged in construction and erection of defective works or
supply of defective materials
h) has not cleared IOCL's dues ,
i) has committed Breach of Contract or has failed to perform a
contract or has abandoned the contract
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.
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k) After opening of Bid, the techno-commercially qualified and
acceptable bidder withdraws / revises his bid upwards within the
validity period.
l) has parted with, leaked or provided confidential/ proprietary
information of IOCL to any third party without prior consent of
IOCL
m) if the security consideration, including questions of loyalty of the
party to the State, so warrants
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.
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.
p) Poor/ unsatisfactory performance of the party in one or several
contracts.
q) Transgression of Integrity Pact for which in the opinion of IOCL
makes it undesirable to deal with the party.
r) Based on the findings of the investigation report of any
investigative agency, Government Audit, any law enforcement
agency or government regulator.
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.
t) Any other ground which in the opinion of the Corporation makes it
undesirable to deal with the Party.
Note: The grounds/ reasons for holiday listing indicated above are
merely illustrative.
2.2. Communication by Administrative Ministry to IOCL:
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.
b) Holiday listing by other PSUs/ Government Departments shall not
automatically extend to IOCL unless the Administrative Ministry of
IOCL advises for the same
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
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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).
3. Show Cause Notice:
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.
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.
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.)
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.
4. Effect of putting a party on holiday list:
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).
4.2 if a party is put on holiday list during tendering (of works/
purchase):
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.
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. -
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.
Page 19 of 33
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.
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.
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.
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.
4.5. Removal of party from Approved/ Registered list, wherever
Approved/ Registered list of parties are followed.
5. Delisting (from Holiday list) procedure after expiry of the
holiday period:
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.
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):
a) Appeal
The holiday listed party may file an appeal along with a non-
refundable fees of Rs. 10,000, before th 'Appellate Authority'
Page 20 of 33
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.
Appeal Process may be completed within 60 days of filing of
appeal with the Appellate Authority.
b) Review:
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.
............
………….
…………
10. Declaration of Holiday Listing
Every Bidder shall, at the time of submission of bid, give a declaration
in the proforma of the Declaration attached as Attachment-2″
17. A perusal of the Guidelines reveal that the effect of Holiday
listing as specified under Clause-4 reveal that no enquiry/ bid or
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
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
18. This question has been addressed by the Apex Court in the
Judgment which is pressed into service by the petitioner. In
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Raghunath Thakur Vs. State of Bihar & Ors, reported in (1989) 1 SCC229, 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:
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,Page 22 of 33
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.
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
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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
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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 non-
pecuniary damages. In its wide umbrella comes everything that
affects a citizen in his civil life.
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.
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
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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.
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.
23. In Assistant Commissioner of State Tax and Ors. Vs.
Commercial Steel Ltd., reported in (2022) 16 SCC 447, the Apex
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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
exceptional circumstances where there is:
(i) a breach of fundamental rights;
(ii) a violation of the principles of natural justice;
(iii) an excess of jurisdiction; or
(iv) a challenge to the vires of the statute or delegated
legislation.
In these circumstances, there is no bar for a writ Court to
entertain a writ petition notwithstanding the existence of
alternative remedy.
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
the OPWD Code, a show cause notice was issued, the order of
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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.
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
during construction of the flyover and certain lapses were found
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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.
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.
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
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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.
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
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charges against the petitioner should have been confronted by a
personal hearing granted to the petitioner company.
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
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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
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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.
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.
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.
30. The writ petition accordingly allowed to the extent indicated
and disposed of. No order as to cost.
JUDGE
Comparing Assistant
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