THE HON’BLE SRI JUSTICE PULLA KARTHIK

ORDER:

This Writ Petition, under Article 226 of the Constitution of India, is filed seeking the following relief:

“…to issue writ or order more particularly one in the nature of mandamus, declaring clause 1.4 (b) of Work Order No. 7600009302 dated 14-11-2022, issued by respondent no. 2, in favour of petitioner is illegal, against public policy and in violation of Section 23 of Indian Contract and quash the said clause on such terms and conditions as this court deems fit and may pass…”

2. Heard Sri L. Harish, learned counsel for the petitioner and Sri E. Madan Mohan Rao, learned Senior Counsel, representing Sri P. Sri Harsha Reddy, learned Standing Counsel for the respondents.

3. Learned counsel for the petitioner submitted that the petitioner, being a joint-venture, obtained a work order from respondent No.2 vide order No.7600009305 dated 14.11.2022, for drilling, excavation, loading, transportation, dumping, spreading, leveling, etc. of 722.176 LBCM of IN-SITU overburden (which includes 3.982 LBCM of top soil, 7.715 LBCM of B.C. soil, 692.993 LBCM of hard OB and 17.486 LBCM of coal) with conventional equipment and additional works, viz., 1500 shovel hours, 500 dozer hours and 75,000 RMT drilling at Srirampur Open Cast-I and II integrated project Srirampur area for a period of forty-eight months (four years), commencing from 30.11.2022. Accordingly, as per the work order, the respondent Company shall supply diesel for running vehicles and machinery, and as per Clause 1.4(b) of work order, a fixed rate of Rs.143.26 per liter, as on 08.11.2022, was quoted for diesel, and it was also quoted that the diesel price during the contract period will remain the same irrespective of an increase or decrease in the diesel price. It was further submitted that the diesel price in the country has fluctuated and it has come down to Rs.96/- and the respondents, by taking undue advantage of Clause 1.4(b), are deducting the cost of diesel supplied from the bill raised by the petitioner at Rs.143.29 per liter. Accordingly, the differential amount calculated from September, 2023 to May, 2024 is about Rs.3,80,82,418.96.

4. Learned counsel contended that petroleum or petroleum products, which are essential commodities, are covered by the Essential Commodities Act, 1955. Therefore, the respondent Company cannot perform the business of purchasing diesel from the oil companies as per the prevailing market value and supply it to the petitioner at a higher price, i.e., Rs.143.26 per liter. Further, as per Section 3(2)(c) of the Essential Commodities Act, 1955, the Central Government is empowered to control the price at which any essential commodity may be bought or sold. Therefore, Clause 1.4(b) of the work order No.7600009302 dated 14.11.2022 issued in favour of the petitioner by respondent No.2, is unlawful, forbidden by law, and is hit by Section 23 of the Indian Contract Act, 1872, and the said clause is against public policy. Therefore, learned counsel for the petitioner prayed this Court to pass appropriate orders by setting aside Clause 1.4(b) of the Work Order No.7600009302 dated 14.11.2022. Reliance has been placed on the decisions of the Hon’ble Apex Court in ABL International Ltd. and another v. Export Credit Guarantee Corporation of India Ltd. and others, (2004) 3 SCC 553 and Gas Authority of India Limited v. Indian Petrochemicals Corporation Limited and others2

5. On the other hand, learned Senior Counsel appearing for the respondents submitted that the petitioner firm stood as L1 in the open market bidding enquiry No.E11220O137 dated 11.07.2022, for drilling, excavation, loading, transportation, dumping, spreading, leveling, etc. Therefore, a contract, vide work order No.7600009302 dated 14.11.2022, was awarded to the petitioner firm after completion of the tender process, and the work commenced from 30.11.2022. Further, as per Clause 1.1.1(e) of the Notice Inviting Tender (NIT), “SCCL will

2 (2023) 3 SCC 62