The court held that the cancellation of a Letter of Acceptance was arbitrary as it was based on a miscalculation of the 30-day compliance period, violating principles of natural justice.

ORDER :

1. The case of petitioner is that pursuant to the Tender Notice issued by the 1^st respondent for Bunker supply of black oil and white oil through tanker barges to the coastal/foreign run sea going vessels berthed at inner harbor, outer harbor, and outer anchorage of Vizag Port, Petitioner along with others submitted tenders. The name of Petitioner's barge is CAPSTAR-1. After getting fully satisfied about Petitioner's barge, the 1^st Respondent accepted the tender submitted by them. Petitioner tendered for 30% transportation of the Oil and it stood as L2 among the Tenderers, L1 being for 50% transportation. It is submitted that the 1st Respondent issued Letter of Acceptance (LOA) dated 20.02.2025, as per which, the period of contract is three years from the date of the LoA, extendable for a further period of 9 months on mutual consent, in line, with GeM conditions. It is stated Petitioner had complied with all the formalities for clearance of its berth from Kakinada Port to Vizag Port for transporting the black oil/white oil, as per the requirement and the work orders of the 1st Respondent in accordance with the LOA.

1.1. It is stated, the 1^st Respondent issued Petitioner Work Order dated 12.03.2025 for transporting white oil and black oil to coastal and foreign-run vessels stationed at Vizag Port through tanker barges (small category barges). Under the relevant Rules and Regulations governing the movement of barges, petitioner applied on 03.03.2025 for clearance of its Barge from Kakinada port; the said port delayed issuance of clearance. Thereafter, on 12.03.2025, the 1^st Respondent issued work order which should be followed by due execution of the prescribed Contract and issuance of LOA. As Kakinada port was delaying clearance, petitioner re-submitted its Application on 22.03.2025. As there was no response, petitioner filed Writ Petition No. 8234 of 2025 and Kakinada Port issued clearance. By an e mail, petitioner informed the 1^st Respondent that its Barge would be ready in all respects at Vizag port by 27.03.2025.

1.2. As per normal practice and procedure in vogue, the 1^st Respondent has to follow up the said LOA with a written prescribed contract and issuance of LOA for transportation of the oil, pursuant to the said work order. The 1st Respondent did not get the prescribed contract duly executed by Petitioner and no LOA was issued to petitioner. Petitioner received an e mail dated 21.03.2025 from the 1^st Respondent to position the Barge within 30 days from the date of LOA i.e by 21.03.2025 failing which, the said LOA is liable for cancellation. According to petitioner, this communication is illegal and impermissible, as, by 21.03.2025, 30 days did not expire from the date of the LOA. The 1^st Respondent failed to notice that February has only 28 days.

1.3. Petitioner sent e mail dated 28.03.2025 informing that its Barge arrived at Vizag port on 28.03.2025 and is ready for the procedural inspections by the 1st Respondent, followed by e mail dated 29.03.2025 informing the 1st Respondent that survey of its Barge by Vizag port was completed and that VPT Harbour Craft license was also issued by the said port. Again, on 01.04.2025 at 12.58 hours, by another e mail all these aspects were communicated to the 1^st Respondent requesting them to issue Letter of Intent for transportation of oil, as per the said work order given to petitioner. However, Petitioner received an e-mail dated 01.04.2025 (at 19.25 hours) from one of the officials of the 1st Respondent stating that as per the earlier e mail dated 21.03.2025, the said LOA issued to petitioner stands cancelled, as, by 21.03.2025, they did not keep its barge ready. It referred to "Point 4 in the Tend