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2016 Supreme(Mad) 2219

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
B. RAJENDRAN, J.
S.S. Perumal Tank Contractor - Petitioner
Versus
The Senior Regional Manager Hindustan Petroleum Corporation Limited - Respondent
Writ Petition (MD) No. 2676 of 2016
Decided On : 22-07-2016

Advocates Appeared:
For the Petitioner:Mr. M. Venkatachalapathy, Senior Advocate for Mr. Ananth C. Rajesh
For the Respondent: Mr. M. Sridhar

Headnote:Contract - Termination – Impugned order is set aside as the petitioner was not given chance to defend himself before the order of blacklisting was passed. Natural justice was not followed as respondent wrote in his show cause notice that any action can be taken against the petitioner.

ORDER :

The petitioner calls in question the order dated 20.01.2016 passed by the respondent by which the respondent terminated the contract awarded to the petitioner inter alia blacklisted and prohibited him from participating in the future contracts that may be awarded by the respondent.

2. The petitioner would contend that he was awarded a contract on 01.03.2015 by the respondent for five years commencing from 01.03.2013 to 31.03.2018 to run Trucks with capacity of 12 KL and above to transport bulk white oil petroleum products. An agreement dated 01.03.2015 was entered into between the petitioner and the respondent. In order to give effect to the terms of the contract, the petitioner has purchased five trucks, appointed 10 drivers and 10 cleaners besides a clerical staff for monitoring the day to day transactions.

3. According to the petitioner, on 03.12.2015, the respondent corporation made a surprise inspection of one of the trucks bearing TN 04 T 6220 owned by him and allegedly found that the locking system was tampered with. In connection with this incident, a show cause notice was issued to the petitioner on 09.12.2015 asking him to show cause as to why action should be initiated against him for violation of Clause Nos. 2.2.6, 3.2, 4.1.2 and 8.12 of the agreement dated 01.03.2015. The petitioner submitted a detailed reply dated 15.12.2015 contending inter alia that the alleged tampering is a result of defect in the fabrication of the lock and due to natural rusting owing to heavy rains and it is an act of God. In other words, the petitioner has specifically contended that there was no wilful tampering of the locking system. Inspite of such reply, the respondent has passed the order dated 20.01.2016, terminating the contract of the petitioner and also blacklisted him from the existing list of contractors thereby prevented him from participating in the future contracts to be awarded by the corporation. Challenging the same, the petitioner has come up with this writ petition questioning the correctness of the above order passed by the respondent.

4. The learned Senior counsel appearing for the petitioner would contend that the impugned order dated 20.01.2016 is in violation of the principles of natural justice and on that ground it is liable to be set aside. According to the learned Senior counsel for the petitioner, the respondent is a corporation, a statutory body and it is expected to give a personal hearing to the petitioner before passing any order adverse to him. The respondent has merely sent a show cause notice on 09.12.2015, obtained the explanation from the petitioner on 15.12.2015 and thereafter passed the impugned order which is not in consonance with the principles of natural justice.

5. The learned Senior counsel for the petitioner also contended that in the show cause notice dated 09.12.2015, the petitioner was not called upon to show cause as to why he should not be blacklisted. In other words, the show cause notice was issued calling upon the petitioner only to submit his explanation as to why his existing contract should not be terminated. Thus, there is no proposal in the show cause notice dated 09.12.2015 to blacklist the petitioner from the list of existing contractor. Therefore, the petitioner submitted his explanation on 15.12.2015 confining his objection only in so far as it relates to termination of his contract. Thus, without even putting the petitioner on notice regarding the proposed action to blacklist him from the existing list of contractors, the impugned order has been passed by the respondent and it is in violation of principles of natural justice.

6. The learned Senior counsel for the petitioner mainly contended that the impugned order in so far as it relates to blacklisting the petitioner would have adverse civil consequences against him. In such circumstances, the respondent ought to have given




































































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