The existence of an arbitration clause in a contract agreement may preclude the maintainability of a writ petition challenging the termination of the agreement.

1. Heard Mr.N.R.Chandran, learned Senior Counsel, appearing for the petitioner and Mr.O.R.Santhanakrishnan, learned counsel appearing for the respondents.

2. The petitioner / Transport Contractor has filed this Writ Petition praying for issuance of a writ of certiorari to quash the order passed by the second respondent dated 16.12.2014. By the impugned order, the Transport Contract Agreement entered into by the petitioner with the respondent Corporation dated 17.01.2014, was terminated and all the Tank Trucks offered by the petitioner were blacklisted permanently and also on industry basis, by referring to various clauses in the Transport Contract Agreement.

3. The petitioner is a Partnership Firm engaged in the business of Transport by offering Trucks owned by them to various Oil Companies. In response to the tender notified by the respondent Corporation during May 2013, for transportation of Bulk While Oil Petroleum Products (MS/HSD) by Road Ex Ennore/Chennai Terminal for a period of five years with effect from 01.10.2013, the petitioner was declared as a successful bidder and they entered into a contract agreement on 17.01.2014, with effect from 01.10.2013. Under the contract agreement, the petitioner was awarded work for 25 trucks. During the course of contract, the petitioner was issued with a show cause notice dated 14.7.2014, stating that they have violated the Transport Contract Agreement entered by offering three tank trucks which were blacklisted by the Indian Oil Corporation on permanent basis vide their letter dated 13.11.2013 and that the petitioner provided false information in the tender and agreement was entered with the respondent Corporation. This according to the respondent Corporation is in violation of the Industry Transport Discipline Guidelines and Transport Agreement clauses 2.1.1, 2.1.2, 5.1, 5.2, 5.3, 8.2.1, 8.2.2.13, 8.2.2.14, 8.2.2.16 and clause 17 respectively.

4. The petitioner was called upon to show cause as to why action should not be taken as deemed fit including the termination of transport agreement dated 17.01.2014. The petitioner was granted seven days time to submit his explanation. Pending receipt of the explanation, three tank trucks bearing Registered Nos. TN34l 6305, TN04U 1256 & TN34E 1014, were kept under suspension. Further, the crew who operated those three trucks were also debarred from entering into terminal, till further advise. The petitioner submitted their explanation on 31.07.2014, stating that the aforementioned blacklisted tank trucks were operated in IOCL and the contract expired on 31.10.2013 and the tank trucks were blacklisted on 13.11.2013, only for two years which was after the submission of tender documents. Further, it is stated that the tank trucks were not blacklisted by any other Oil Company during the submission of tender documents and requested for replacement of few tank trucks before induction of tank trucks under the contract and were instructed by the HPCL that replacement will be approved only after the induction of original tank trucks offered in the tender. Therefore, the petitioner justified their conduct in inducting all tank trucks under the contract and subsequently planned for replacement of few tank trucks including the blacklisted tank trucks from the contract with equivalent latest tank trucks. The petitioner apologised and regretted for inclusion of the three tank trucks which were blacklisted by IOCL for two years till 12.11.2015 due to ignorance. The petitioner offered to replace the tank trucks immediately for uninterrupted operation.

5. After the reply was submitted to the show cause notice dated 17.01.2014, another show cause notice was issued on 22.09.2014, stating that the explanation given for the show cause notice dated 14.07.2014, is under perusal, while so, it was noticed that another tank truck bearing Registration No. TN-03-F-5511, was found to have indulged in malpractice/irregularity of having additional solid hollow pi