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IN THE HIGH COURT OF ALLAHABAD
MANOJ MISRA, VIKAS BUDHWAR, JJ.
M/S Atts Associates – Appellant
Versus
Bharat Petroleum Corporation Ltd. And Others – Respondents
Writ C No.16713 of 2022
Decided on : 11-10-2022
Blacklisting - Transportation Contract - OITDG Clause 8.2.2.2, 8.2.2.8, 8.2.2.11, 8.2.2.16 - The court addressed the issue of blacklisting the entire fleet of the petitioner's firm under the transportation contract. The notices issued to the petitioner did not unequivocally inform about the possibility of blacklisting the entire fleet if the reply was found unsatisfactory. The court held that the notices failed to meet the requirements of a valid show cause notice for imposing the penalty of blacklisting the entire fleet of TTs. The court allowed the writ petition and set aside the order blacklisting the entire fleet of TTs of the petitioner's firm.
Fact of the Case:
The petitioner, a firm engaged in transportation of petroleum products, sought quashing of notices and an order imposing penalties for breach of the transportation agreement with Bharat Petroleum Corporation Ltd. The petitioner's vehicle was seized on charge of pilferage, leading to the imposition of penalties including blacklisting the entire fleet.
Finding of the Court:
The court found that the notices failed to inform the petitioner about the possibility of blacklisting the entire fleet if the reply was found unsatisfactory, violating the principles of natural justice. The court set aside the order blacklisting the entire fleet of TTs of the petitioner's firm.
Issues: The issues included the validity of the notices and the order imposing penalties, particularly the blacklisting of the entire fleet of the petitioner's firm.
Ratio Decidendi: The court held that the notices failed to meet the requirements of a valid show cause notice for imposing the penalty of blacklisting the entire fleet of TTs, violating the principles of natural justice.
Final Decision: The court allowed the writ petition and set aside the order blacklisting the entire fleet of TTs of the petitioner's firm.
JUDGMENT :
1. We have heard Sri Udit Chandra for the petitioner and Sri Puneet Agarwal for the respondents 1 to 5.
2. At the outset, the learned counsel for the petitioner invited our attention to paragraph no.1 of the writ petition to indicate that first petition on the present cause of action was withdrawn with liberty to file a fresh petition therefore, the second petition is maintainable. It be observed that the first petition i.e. Writ C No. 34659 of 2021 was pending when this second petition was filed, however, by the time this second petition was filed, an application had already been filed to withdraw the previous petition and this fact was disclosed in this petition. In these circumstances, we deem it appropriate to address this petition on merit as any view to the contrary may render the petitioner remediless.
3. The relevant facts of the case are as follows: The petitioner is a firm engaged in the business of transportation of petroleum products. On an invite by Bharat Petroleum Corporation Ltd (for short the Corporation) to settle a contract for transportation of its products, the petitioner submitted a bid and was declared successful. Pursuant to which, an agreement was entered into between the petitioner and the Corporation on 16.01.2018, initially, in respect of engagement of 5 vehicles, which was subsequently enhanced to 14, for a period of 5 years. During the period of engagement, on 03.10.2021 a vehicle (Tank Lorry No. UP 85 BT 6975) was seized by the police on charge of pilferage of petroleum products. An FIR was also lodged, followed by impugned notices dated 3.10.2021 (Annexure no.1 to the petition) and 6.10.2021 (Annexure no.2 to the petition), which culminated in passing the impugned order dated 9.12.2021 (Annexure 3 to the petition). The petitioner seeks quashing of the notices dated 03.10.2021 and 06.10.2021; and the order dated 09.12.2021 by which, for breach of the terms and conditions of the agreement between the petitioner and the corporation, the petitioner has been visited with penal action as enumerated below:-
2. Forfeiture of Security deposit of all tank lorries amounting to Rs. 5 lacs.
3. Termination of Transport Agreement BPCL/ NR/ POL/BULK/ 2016-21/ Mathura dated 16.01.2018, with immediate effect, including blacklisting the entire fleet along with crew of following 14 tank lorries on Industry basis for a period of 5 years. The period of blacklisting shall be effective from 03.10.2021 to 02.10.2026.
| SL | TL Regn No. | TL Cap (KL) | Engine No. | Chasis No. |
| 1. | UP85BT5985 | 20.00 | 41K84186239 | MAT448022EAN1039 1 |
| 2. | UP85BT5432 | 20.00 | 591803111L84027599 | MAT448030B7N53211 |
| 3. | UP85BT5986 | 20.00 | 41K84188654 | MAT448022E5N12567 |
| 4. | UP85BT6455 | 20.00 | 41K84187223 | MAT448022EAN1033 5 |
| 5. | UP85BT6155 | 20.00 | 41K84187367 | MAT448022EAN1033 9 |
| 6. | UP85BT6975 | 20.00 | 11C63106431 | MAT448050B0C05536 |
| 7. | UP85BT8535 | 20.00 | 91F84890128 | MAT44861K0G09311 |
| 8. | UP30A8585 | 20.00 | 697TC5MSZ155320 | 444026MSZ021199 |
| 9. | UP86T0831 | 20.00 | ZFH376636 | ZFE80601 |
| 10. | UP85U9216 | 20.00 | 697TC57DRZ121618 | 444026DRZ008569 |
| 11. | UP14CT2647 | 20.00 | 11D84003889 | MAT448050BOE09293 |
| 12. | UP85U9996 | 20.00 | 697C58BQZ106256 | 46910191D08923 |
| 13. | UP85V9036 | 20.00 | 697TC58BQZ102603 | 46910BQZ104177 |
| 14. | NL01N4181 | 24.00 | BEFZL14675 | MA1PFALBCF6L48523 |
4. A preliminary objection has been raised by the learned counsel for the corporation with regard to maintainability of the writ petition as there exists an alternate dispute resolution mechanism (ADR mechanism) in the agreement between the parties. In response thereto, the learned counsel for th
The main legal point established is that a valid show cause notice for imposing the penalty of blacklisting the entire fleet of TTs must clearly inform the noticee about the possibility of such penal....
The corporation's decision to blacklist the entire fleet upon finding a duplicate dip rod in one truck was justified as per the transport discipline guidelines, emphasizing strict liability for viola....
The necessity of issuing a show cause notice before passing an order of blacklisting, specifying the grounds and proposed action in the notice to provide the noticee with an adequate opportunity to r....
The procedural fairness and reasonableness of the actions cannot be called into question as due opportunity was given to the Petitioner.
Blacklisting of a contractor's vehicles must be proportionate to the offense; lifetime blacklisting is impermissible and must be limited to a reasonable period.
The main legal point established in the judgment is the requirement for a clear mention of the proposed blacklisting action in the show cause notice, as well as the need to adhere to principles of na....
Administrative decisions must be reasoned and justified; failure to provide such reasoning can lead to judicial intervention.
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