IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
V.M. Sahai, R.P. Dholaria, JJ.
Shiv-Vani Oil and Gas Exploration Services Ltd. and Ors. - Appellants
Vs.
Oil and Natural Gas Corpn. (India) Ltd. and Ors. - Respondents
SCA No. 4263 of 2015
Decided On: 08.05.2015
Constitution of India,1950 - Article 226 - Tender - Blacklisting or putting on holiday causes economic loss and cast slur on reputation of contractor - Putting contractor on holiday/banning without observance of principles of natural justice - Failure to give reasons for disagreeing with report of inquiry Officer - Procedural fairness is required whenever exercise of power adversely affects an individuals right including a right under a Government or corporation contract - It is an implied rule of law that any action entailing economic loss should be taken after following principles of natural justice - That affected parties should not be deprived of a proper opportunity to put their case effectively is the elementary principle of natural justice - Impugned order is very cryptic, unreasoned and non-speaking - Respondent-Corporation has not provided inquiry report as well as not afforded any participation of contractor before reviewing authority who recommended to pass impugned order of placing contractor on holiday/banning - Impugned order clearly appears to be not in consonance with material available on record for the reason that except one opportunity of showing cause no opportunity was granted at the stage of review by EPC - The impugned order is neither in consonance with recommendations made by inquiry Officer nor it is in consonance with observance of principles of natural justice as it is based upon decision of reviewing authority - impugned order quashed and set aside - Petition dismissed.
R.P. Dholaria, J.
1. The present petition under Article 226 of the Constitution of India is directed against the order dated 28.1.2015 passed by respondent No. 2 putting the petitioner on holiday for a period of 1 year with effect from 28.1.2015, decision dated 23.2.2015 whereby respondent No. 1 decided to issue LOA to John Energy and going for re-tendering for remaining 3 rigs and the orders/communications dated 7.1.2014 and 23.6.2014 passed by the respondents. The facts in brief of the case are that on 1.10.2008, contract No. 9010010856 was awarded to petitioner No. 1 by respondent No. 1 to drill exploratory wells of well depth range 6000 to 7000 metres from spud to completion for a period of three years effective from the date of completion of mobilization and spudding of first well. According to the petitioners, the said job was required to be carried out using one number of Type IV category Drilling Rig, capable of drilling up to 7000 metres at Sivasager (Assam Asset). The petitioner No. 1 deployed its Rig Shiv No. 50 under this contract.
2. It is the case of the petitioners that on 3.4.2012 second contract No. 9010015145 was awarded to petitioner No. 1 by respondent No. 1 to hire one 1000 HP Mobile Drilling Rig for a period of three years for deployment in Non-PEL/ML area of Ahmedabad asset commencing from the date of completion of mobilization and spudding of first well. The petitioner No. 1 deployed Rig Shiv No. 39 under this contract.
3. It is further case of the petitioners that on 22.6.2012 third contract No. 9010015146 was awarded to petitioner No. 1 by respondent No. 1 for providing 2 Nos. of Drilling Rigs, Type-III, upto the capacity of 6000 metres, minimum BHP-2000 for ONGC, Cauvery Basin, Karaikal commencing from the date of completion of mobilization and spudding of first well for a period of two years. The petitioner No. 1 deployed Rig Shiv Nos. 25 and 26 under this contract.
4. According to the petitioners, on 18.10.2013 respondent No. 1 issued 30 days three separate notices under clause Nos. 22.5, 3.5(1) and 3.9 of the Assam, Ahmedabad and Cauvery-Basin contract stating that in case petitioner No. 1 fails to rectify the deficiencies specified in the respective notices and commence drilling operations within 30 days from the date of this letter to the fullest satisfaction of respondent No. 1, further proceedings for termination may be initiated by respondents. 1. Pursuant thereto, the petitioners replied to notices dated 18.10.2013 vide its letters dated 30.10.2013. According to the petitioners, surprisingly, without giving any notice of any opportunity of being heard, respondent No. 1 passed an order on 7.1.2014 putting the petitioner on holiday for one year with effect from 1.1.2014 and decided not to consider any offer made by the petitioners for the period of one year with effect from 1.1.2014. Against the said order, the petitioners made various representations to the Chairman and Managing Director of respondent No. 1 requesting him to withdraw the order dated 7.1.2014 and to consider the offer of the petitioner and open the price bid of the petitioners for work-over Rigs/. e. Tender No. BN6AC13001 for Charter hiring of 4 numbers of drilling rigs for Assam Asset. It is the case of the petitioners that in spite of various representations made by the petitioners, the same have not been responded and surprisingly on 21.4.2014, respondent No. 1 issued notices terminating the contract of Ahmedabad and Assam in respect of Rig Nos. 39 and 50 respectively. According to the petitioners, there is no termination of contract in respect of Rig No. 26 and the contract was on-going and now it is over. The petitioners replied to the termination notices dated 21.4.2014 vide their letter dated 24.4.2014, inter alia, contending that in view of recommencement of operations, respondent No. 1 cannot take any action and termination notices dated 21.4.2014 are inoperative, null and void.
5. It is the case of the petitione
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