M/S Pranjal Bp Gohain vs. The Union Of INDIA And 4 Ors.

Held

The Court held that the termination of the petitioner's contract and their placement on the holiday list by ONGC constituted an abuse of power and was violative of Article 14 of the Constitution of India. The Court reasoned that the Notification of Award dated October 4, 2023, issued in favour of the petitioner, had lost its force and effect due to the orders passed in WP(C) No. 5870/2023. Consequently, the petitioner could not be deemed to have defaulted in mobilizing the water tanker, which would have attracted the second part of Clause C.7(ii) of the bid document. The termination of the Notification of Award by the communication dated January 16, 2024, was therefore deemed unfair, unjust, and arbitrary. Similarly, the communication dated August 22, 2024, placing the petitioner on the holiday list, was also considered an abuse of power. The ratio decidendi is that administrative actions based on non-existent facts or in contravention of prior court orders are invalid and constitute an abuse of power. The Court directed that the termination order and the holiday listing communication be interfered with.

Facts

The petitioner, M/s Pranjal BP Gohain, assailed communications dated January 16, 2024, terminating their contract, and August 22, 2024, placing them on a holiday list and debarring them from future contracts with ONGC. ONGC had issued an Invitation to Bid for Water Tanker Service. Clause C.7(ii) of the bid document stipulated that failure to mobilize the water tanker within quoted days would result in automatic cancellation of the Notification of Award (NOA). Another bidder, Mahmud Ali, challenged his bid rejection in WP(C) No. 5870/2023. This Court, by orders dated October 4, 2023, and November 10, 2023, in WP(C) No. 5870/2023, directed ONGC not to proceed further with the price bid opening or issue/act upon any work order if not issued by October 4, 2023. A subsequent order dated June 20, 2024, in WP(C) No. 5870/2023, declared the Notification of Award dated October 4, 2023, issued in favour of the petitioner as having lost its force and effect.

Key Issues

1. Whether the termination of the petitioner's contract and their placement on the holiday list by ONGC is arbitrary and amounts to an abuse of power, considering the prior orders passed by this Court in WP(C) No. 5870/2023? (Question of law and mixed fact and law). The petitioner argued that the termination and holiday listing were unfair, unjust, and arbitrary, constituting an abuse of power, particularly in light of the orders in WP(C) No. 5870/2023 which rendered the Notification of Award ineffective. They contended that they could not be deemed to have defaulted on mobilization due to these orders. The revenue/State (ONGC) did not record specific arguments in the judgment regarding this issue.