Devi Engineering And Construction PVT. LTD. vs. Oil INDIA LTD. And Anr.

Held

The Court, while not delving into the technical merits of the rival claims regarding the termination, prioritized public interest and the early completion of the work. Recognizing that COVID-19 related road movement restrictions were no longer in force, the Court directed the petitioner to transport the materials from Kolkata port to the work site within 15 days. If the petitioner faced minor delays despite earnest efforts, they could submit a representation to OIL with an updated report for consideration. The Court also addressed the petitioner's need for an explosives license, directing OIL to cooperate in obtaining it. Consequently, OIL was ordered not to give effect to the termination notice dated 14.08.2020. However, the Court stipulated that if the petitioner failed to comply with these directions, OIL would be at liberty to take appropriate action. The writ petition was disposed of with these directions.

Facts

Devi Engineering and Construction Pvt. Ltd. (petitioner) was awarded a contract by Oil India Ltd. (OIL) for seismic data acquisition in Assam and Arunachal Pradesh, with an estimated cost of Rs. 110,60,32,240/-. The contract duration was 14 operating months from commencement, with a 90-day mobilization period. The petitioner contended that materials mobilized from China and France were held up at Kolkata port due to the COVID-19 pandemic, preventing transport to the work site. They relied on a Government of India Office Memorandum dated 19.02.2020, which stated that disruptions due to COVID-19 would be covered under the Force Majeure Clause (FMC). OIL issued a termination notice dated 14.08.2020, citing the petitioner's failure to mobilize within the prescribed period. The petitioner challenged this termination notice through a writ petition.

Key Issues

1. Whether the petitioner's inability to transport mobilized materials to the work site due to the COVID-19 pandemic constitutes a Force Majeure event, excusing their delay in mobilization under the contract, as per the Office Memorandum dated 19.02.2020 and the Manual for Procurement of Goods 2017? Petitioner's arguments: The petitioner argued that the COVID-19 pandemic and subsequent restrictions on road movement prevented them from transporting essential materials from Kolkata port to the work site. They contended that this situation falls under the Force Majeure Clause as per the Government of India's Office Memorandum dated 19.02.2020, which covers disruptions due to the spread of COVID-19. They asserted that they had issued a notice dated 16.05.2020 requesting the invocation of FMC. Respondent's arguments: OIL rejected the petitioner's request to invoke FMC, stating that mobilization should have been completed within 90 days from the letter of award. They relied on the contract's termination clause for unsatisfactory performance, which allows termination with 15 days' notice if performance is not up to expected standards.