Blacklisting a contractor without a show cause notice violates natural justice, and such actions must not be taken for mere breaches of contract.

ORDER :

P.T. ASHA, J. 

Since the genesis for both the writ petitions is the same, a single order is being pronounced. The writ petition in W.P.No.48359 of 2025 had been filed by the petitioner challenging the communication dated 01.12.2025 in and by which the petitioner has been blacklisted and debarred from participating in any of the tender conducted by Indian Oil Corporation Limited (IOCL) for a period of six months effective from the date of the letter and the writ petition in W.P.No.48363 of 2025 is filed challenging the order cancelling the Letter of Acceptance dated 11.02.2025 issued in favour of the petitioner.

FACTS OF THE CASES:

2. The facts of the cases are set out briefly hereinbelow.

2.1. The petitioner is a private company engaged in the business of providing barges for re-fuelling of ships which come to the various ports at Chennai, Ennore, Kattupalli, etc. The petitioner has been in this business for over a period of 15 years and has carved a niche for themselves in the said business.

2.2. The petitioner was the successful bidder for a tender floated by the respondent corporation for the year 2017-2018 to provide barge services for the purpose of Bunker supply of black oil and white oil through barge to the coastal/foreign run vessels berthed in the ports of Chennai, Ennore, L&T Kattupalli port, Adani Kattupalli Port berth and outer anchorages of all the ports. The scope of the tender for the year 2017-2018 required the petitioner company to execute the work with two barges, barge of 1000 KL capacity and another of 600 KL capacity.

2.3. This tender is valid for three years from 30.08.2018 to 31.08.2021.The petitioner had also successfully executed the work for the period of three years without complaint from any quarters. Taking note of the excellence offered by the petitioner, the tender was extended for the period of two years from 31.08.2021 to 30.08.2022 and from 31.08.2022 to 30.08.2023. This extension was as per the terms of the tender condition. Thereafter, on 15.06.2023, the respondent corporation had issued a tender for the very same scope of work. However, the tender documents required the petitioner company to provide three barges – two barges of 800 KL each and one barge of 600 KL.

2.4. At the time of the issuance of the tender, the petitioner was in possession of the following three barges:

MV Vamsee-II-1000 KL capacity;

MV Jalabala – 600 KL capacity;

MV San Pride – 1095 KL capacity.

Of these barges, MV San Pride had been taken on lease. As per the tender conditions, the tender documents were to be opened on 11.07.2023 and the validity of the tender was for a period of 180 days from the date of opening of the technical bid. The tender was therefore, valid till 06.01.2024. The petitioner was the sole tenderer and instead of awarding the contract to the petitioner, the respondent corporation sought extension of the bid till 31.03.2024. The petitioner company agreed to the same and thereafter, once again by a letter dated 15.03.2024, the respondent corporation sought extension till 31.05.2024 and finally, the validity was extended till 28.02.2025. Thereafter, a Letter of Acceptance was given on 11.02.2025 accepting the tender of the petitioner company.

2.5. On account of the aforesaid circumstances, it took nearly 19 months for the respondent corporation to accept the tender of the petitioner company which it submitted on 11.05.2023. Meanwhile, since the tender had not been confirmed, the barge which was leased namely MV San Pride was recalled by its owner and redeployed to UAE. The petitioner company, therefore, after the issuance a Letter of Acceptance addressed letters to the respondent corporation vide letters dated 20.02.2025, 07.03.20