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2022 Supreme(AP) 647

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
PRASHANT KUMAR MISHRA, D.V.S.S. SOMAYAJULU, JJ.
Hindustan Petroleum Corporation Ltd. - Appellant
Versus
Coastal Marine Construction & Engineering Ltd., (a company incorporated under the
Companies Act, 1956) – Respondent
Writ Appeal Nos.650 and 660 of 2022
Decided on : 18-10-2022

Advocates:
Advocate Appeared:
For the Appellant : Sri K.S.Murthy for Sri Sreekanth Reddy Ambati
For the Respondents: Sri S.Sriram for Sri Sai Sanjay Suraneni

Headnote:

Constitution of India, 1950 – Article 226 – Quashing or setting aside order – Court has heard, learned senior counsel appearing for appellant in W.A, learned counsel appearing for appellant in W.A, learned senior counsel on behalf, learned counsel for writ petitioner/respondent No.1 in both appeals – Held, Court notices that ‘Enquiry Committee’ that has gone into causes of accident has also apportioned blame to both contractor (writ petitioner) and appellant also – Deployment of M.V. COASTAL JAGUAR and using vessel which was not ready for movement in open sea without the requisite clearances is commented upon – Report is disclosed as a material document – Accident led to death of four people – In line with judgment in case of Panda Infra project Limited (2 supra), Court has to notice seriousness of allegations and also act of omission and commission on the part of the Contractor/writ petitioner. Considering same, Court holds that impugned orders of holiday listing is correct – Ordered Accordingly.

JUDGMENT :

D.V.S.S.Somayajulu, J

These writ appeals are filed questioning the order dated 04.08.2022 in W.P.No.15139 of 2022.

2. This Court has heard Si K.S.Murthy, learned senior counsel appearing for the appellant in W.A.No.650 of 2022, Dr. Sujay Kantawala, learned counsel appearing for appellant in W.A.No.660 of 2022 and Sri S.Sri Ram, learned senior counsel on behalf of Sri Sai Sanjay Suraneni, learned counsel for the writ petitioner/respondent No.1 in both the appeals.

3. The services of the writ petitioner/contractor were engaged by the appellant/HPCL for the work of operation and maintenance for Single Point Mooring system at the Visakha refinery. Alleging that the action/inaction of the writ petitioner caused loss of human life and an oil spill etc., the writ petitioner was black listed for three years. In the technical parlance of the HPCL, it is known as “holiday listing”. By virtue of this holiday listing, the writ petitioner was prevented from participating in tenders for a period of three years by the initial order. Later, in the course of hearing by the appellate authority, this holiday listing period was reduced to one year. Challenging the said holiday listing orders of three years and one year respectively, the writ petition was filed. The same came to be allowed. Hence, the writ appeals.

4. Sri K.S.Murthy, learned senior counsel, points out that the order passed by the learned single Judge is not correct in holding that an ex parte order was passed. Learned senior counsel also points out that the learned single Judge also committed an error in holding that there are no ‘reasons’ given in the said order and that there is a failure of natural justice. It is also pointed out that learned single Judge committed an error in holding that clause 8.7 of the holiday listing guidelines was not followed and that the enquiry should have been completed within six months.

5. Learned senior counsel points out by relying upon the chronology of dates that the first show cause notice was issued to the writ petitioner on 26.02.2021. After considering the replies that were given by the writ petitioner, a final order dated 03.11.2021 was passed. Thereafter, an appeal was filed by the writ petitioner before the Executive Committee on 03.12.2021. After a personal hearing was given, final order was passed on 09.05.2022. Learned counsel laid great stress on the contents of the two orders dated 03.11.2021 and 09.05.2022. He submits that both the orders are reasoned orders and that the issues raised by the writ petitioner were considered and orders were passed. He also points out that the initial authority debarred the writ petitioner from future contracts for a period of three years, whereas the appellate authority reduced this period to one year. He also points out that both of these orders run into pages and have considered the issues raised.

6. Learned senior counsel also submits that clause 8.7 which is relied upon by the learned single Judge is not a mandatory clause and that the writ petitioner also did not raise a dispute that the enquiry was not completed within the stipulated time.

7. Relying upon N.G.Projects Limited v. Vinod Kumar Jain and others, (2022) 6 SCC 127, learned senior counsel submits that even if the action taken was wrong or contrary to law, the writ petitioner can sue for damages. Further, relying upon the State of Odisha and others v. Panda Infraproject Limited, (2022) 4 SCC 393, learned counsel argues that holiday listing or debarment is necessary for disciplining contractors who commit acts of omission and that the Court should not easily involve itself in such matters or exercise powers under 226 by quashing or setting aside the order.

8. Learned counsel lastly submits that the rules of natural justice are in fact followed as is visible from the show cause notices and the replies which were given.

9. In reply to this, Sri Sri Ram, learned senior counsel appearing for the writ petitioner (first respondent) in the app

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