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2025 Supreme(Gau) 202

THE HIGH COURT OF GAUHATI (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
MANISH CHOUDHURY, J
The Chairman And Managing Director, Oil And Natural Gas Corporation Ltd. And 5 Ors - Appellant
Versus
Oval Projects Engineering Private Limited - Respondent
I.A.(Civil) 24 / 2025
Decided On : 28-01-2025

Advocates Appeared:
For the Appellants :MR S CHAKRABORTY, Advocate
For the Respondent: MS M HAZARIKA, MS V V THANYU,MS. S NEWAR

IMPORTANT POINT
A show cause notice does not constitute a final decision; it allows the affected party to respond before any action is taken.

Headnote:

(A) Contract Law - Clauses 8.3 and 16 of the Contract Agreement - Show Cause Notice issued for termination of contract due to submission of forged documents - The court held that the issuance of a show cause notice does not amount to a final decision and provides an opportunity for the contractor to respond before any action is taken. (Paras 5 , 11 , 22 )

(B) Writ Jurisdiction - The court emphasized that ordinarily, a writ petition against a show cause notice is not maintainable unless it is shown to be wholly without jurisdiction or illegal. (Paras 18 , 19 )

(C) Fair Hearing - The court noted that the contractor must be given a fair chance to present its case in response to the show cause notice. (Paras 21 , 24 )

Facts of the case:

The applicants sought modification of an interim order regarding a show cause notice issued for the termination of a contract due to alleged forgery in submitted documents. The contractor was given an opportunity to respond to the notice.

Findings of Court:

The interim order was recalled, allowing the contractor to respond to the show cause notice within 14 days.

Issues: The main issues included the validity of the show cause notice and the contractor's right to a fair hearing.

Ratio Decidendi: The court ruled that a show cause notice is a preliminary step and does not constitute a final decision, emphasizing the need for a fair hearing.

Result: The interim order dated 29.11.2024 stands recalled.

ORDER :

MANISH CHOUDHURY, J.

Heard Mr. I. Choudhury, learned Senior Counsel assisted by Ms. S. Chakraborty, learned counsel for the applicants-respondent nos. 1 to 6; and Ms. M. Hazarika, learned Senior Counsel assisted by Ms. V.V. Thangu, learned counsel for the opposite party-writ petitioner.

2. The instant interlocutory application is preferred by the applicants-respondent nos. 1 - 6 seeking vacation / modification of an interim order dated 29.11.2024 passed in the accompanying writ petition, W.P.[C] no. 6299/2024, which was passed ex-parte.

3. The accompanying writ petition has been preferred by the opposite party as the writ petitioner to assail a Show Cause Notice dated 21.11.2024 issued to the opposite party-writ petitioner by the Chief General Manager, Head MM [the respondent no. 2].

4. The interim order which has been sought to be vacated / modified, read as under :-

    This writ petition is directed to put into challenge the show cause notice dated 21.11.2024, putting the petitioner to show cause as to why the contract presently being executed by the petitioner with ONGC should not be terminated on the grounds mentioned in the show cause notice.
    Issue notice in the interim prayer returnable in 3 weeks.
    Since the respondents are not represented by counsels, steps be taken within a course of 1 week by usual course and by registered post A/D.
    List this matter on 22/01/2025.
    Till the returnable date the further proceedings in pursuant to the show cause notice dated 21.11.2024 shall be kept in abeyance.

5. As the genesis of this interlocutory application is the Show Cause Notice dated 21.11.2024 which came to be issued after a series of communication exchanged between the parties, mentioned in the reference clause of the Show Cause Notice, the relevant excerpts of the Show Cause Notice are extracted hereinbelow, for better appreciation of the issues raised by the contesting parties, :-

    * * * * *
    Sub : Show-Cause Notice for termination of contract, invocation of PBG and suspension of business dealings on account of submission of forged document in respect of Contract of Civil Works and Tank Repair at Lakwa & Lakhmani Fields’ ONGC, Assam Asset – Outline Agreement no. 9030010800.
    * * * * *
    Sir, Please refer to Contract vide no. SIB/AA/SUPPORT/MM/RO- MM/2021/DSCOPARP/845005/R15NC21001/9030010800 for Civil Works and Tank Repair at Lakwa & Lakhmani Fields’ ONGC, Assam Asset, awarded on 09.03.2022 for Rs. 27,00,64,435.71 with completion period upto 08.03.2025.
    In this connection, you appointed M/s Kavin, as Design Engineering Consultant for the Contract. However, during a review of technical document, submission of drawing document submitted by you for the subject job has been not found in order as signature and stamp on the drawing seems to be forged by your company. The authentic of signature and stamp was sought from M/s Kavin vide mail dated 16.02.2024. In response, they confirmed vide mail dated 16.02.2024 that sign and stamp in the document were not done by them. Copy of the aforesaid mail dated 16.02.2024 received from M/s Kavin is annexed herewith.
    In this regard a mail was sent to you on 19.02.2024 citing above issue. You have responded as follows :
    Quote This has reference to your email dated 19.02.2024 on the subject cited above. The matter has come to my knowledge and the same has been investigated by myself. In this regard, the following is clarified.
    On behalf of Oval Projects Engineering Pvt. Ltd. I regret and condemn the unfortunate incident at the highest level. The individual has committed the error inadvertently in a rush of work pressure. Please restasured that such lapses will not be allowed in future. In order to fully plug such lapses to reoccur in future, the DEC, M/s Kavin shall be kept in loop during all design engineering documents approval process between OPEPL and ONGC on this project. The erring i






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