Devendra Singh Jodha vs Indian Oil Corporation Ltd.

M.N. Bhandari, J.—It is a case where tender was floated by the respondent-corporation for transportation of LPG Cylinders from Ex-Ajmer. The petitioners along with others participated therein. After opening technical bid, financial bid was opened and the petitioner being lowest bidder was given work order on 16.04.2014. After the aforesaid, the order was passed by the respondents to cancel/terminate the contract and for that purposes, a notice was given on 23.09.2013, which is impugned herein. Learned counsel for petitioner submits that after issuance of work order, the respondents had no authority to cancel/terminate the contract unilaterally. It is moreso when it is not a consequence of any default in working of the petitioner or violation of terms and conditions of the agreement. The unilateral act of the respondents is discriminatory in nature as the reason for cancellation/termination of the contract is due to some discrepancy in tender document though based on same conditions, contract was awarded and has been maintained for other routes like ex-Jhunjhunu, Jaipur, etc. In view of the above, the impugned order may be set aside. The petitioners are plying trucks during the intervening period under old contract and otherwise the contract is for one year which is going to lapse in the month of April, 2014 though with mutual consent, it is extendable by two years.

Learned counsel for respondents, on the other hand, submits that after floating tender and issuance of work order, the respondents felt discrepancy in the tender document inasmuch as number of trucks were inducted without capacity. The respondent-Corporation was to hire trucks having capacity to carry 306 and 450 cylinders. The bifurcation aforesaid was not made thus committee was constituted and as per decision of the committee, notice was given to terminate the contract. So far as other contracts are concerned, similar action was not taken for the reason that participants in the tender documents were equivalent to the size required thus action of the respondent is not in discrimination.

I have considered the rival submissions made by the parties and perused the record.

Learned counsel for respondents has referred judgment of Hon''ble Apex Court in the case of Maa Binda Express Carrier & Ann v. Northeast Frontier Railway & Ors., Civil Appeal No. 0751/2013, decided on 29th November, 2013. Therein, similar claim as made by the petitioner was not accepted by Hon''ble Apex Court

It is not in dispute that after floating tender and opening technical as well as financial bid, the petitioner was awarded contract and work order was issued in his favour. It was sometime in the month of April, 2013. The impugned order for termination of the contract was passed in the month of September, 2013 based on the report of the committee. It is precisely on the ground that number of trucks required have been indicated in the tender document without indicating the capacity. It seems that the Corporation was in need of trucks having capacity to carry 306 cylinders and 450 and the aforesaid was not given in the tender document. The question is as to whether contract already granted can be terminated by the respondents unilaterally, that too, after showing some discrepancy in the tender document and not after showing default in the working. The answer to the aforesaid is to be given in favour of the petitioner as award of contract cannot be nullified unilaterally and that too, in reference to reason given by the respondent corporation. It is moreso when their act is in discrimination because other than one contract from ex-Ajmer, similar tender and award of contract to others has not been terminated. The respondents have tried to give justification for the aforesaid but it is not at all satisfactory.

The question as raised by learned counsel for respondents is regarding capacity of the truck required by them. If that was issue for cancelling/terminating the contract herein then similar act was required for other contract also though question would again be as to whether it can be done after issuance of work order in favour of the petitioner. The agreement entered between the parties cannot be terminated by unilateral act.

So far as judgment in the case of Maa Binda Express Carrier (supra) is concerned, the facts therein are quite distinguishable. The claim made by the petitioner for contract therein was being highest bidder. The right of contract is not created being highest bidder. Accordingly Hon''ble Apex Court dismissed the appeal.

The case in hand is not of similar nature rather tender document referred in the instant case is operating for other routes without cancellation/termination of the contract. In view of the above, the impugned orders qua petitioners are set aside. It is however made clear that work so awarded to the petitioners would be governed by the terms and conditions and for the period given in the agreement unless so extended by mutual consent. In case, it is not extended, the respondent Corporation would be at liberty to float new tender. With the aforesaid, writ petitions so as stay applications are disposed of.