Hexxa Geo Systems Integrators Pvt Ltd vs Indian Oil Corporation Limited And Others

947-2025 (O & M)
-1-
CWP-389


IN
THE HIGH COURT OF PUN
NJAB AND HARYANA AT
GARH
CHANDIG


CWP-38947-2025 (O & M)

Reserved
on
d Pronounced Uploaded
on on
Whether only
the operative
part of the
judgment is
pronounced
Whether t
full judgme
is
pronounced
the
ent
d
03.08.202
26 31.08.2026 02.09.2026
Yes/No Yes/No


S PVT LTD ...PETITIONER
R
HEXXA G
GEO SYSTEMS INTEGRATORS
VERSUS

AND OTHERS . .RESPONDEN
NTS
INDIAN O
OIL CORPORATION LIMITED

CORAM

M: HON'BLE MR. JUSTICE S
SUVIR SEHGAL
DEEPINDER SINGH NALWA
D
HON'BLE MR. JUSTICE

Present:

Advocate with
Mr. Sanjay Kaushal, Senior A
Ms. Arushi Dubey, Advocate
Ms. Ojaswini Gagneja, Advoc

for the petitioner.

and

cate


e and
Mr. Ashish Kapoor, Advocate

Mr. M.S. Rana, Advocate
for the respondents.
*

SEHGAL, J.


SUVIR S
1.
Petitioner has approached th
his Court under Article 226/227
7 of
the Cons
stitution of India assailing tw
wo orders both dated 17.12.20
025,
Annexure
e P-18 and P-20, respectively, iss
sued by Indian Oil Corporation L
Ltd.
(IOCL)-re
espondents.
SHEETAL
2026.09.02 17:37
I attest to the accuracy and
authenticity of this order/judgment
High Court, Chandigarh
2.
The genesis of dispute is a
tender, Annexure P-1, floated
by

947-2025 (O & M)
-2-
CWP-389


IOCL for
design, supply, installation, test
ting and commissioning of IP ba
ased
CCTV su
urveillance system along with as
sociated works at various LPG a
and
AFS locat
tions in the State of Punjab. Peti
itioner was declared successful a
and
was issue
ed a letter of acceptance dated 18
8.01.2023, Annexure P-2. This w
was
followed
by work order on 23.02.2023, A
Annexure P-3. During the execut
tion
of contrac
ct, some disputes arose between
n the parties pertaining to delay
y in
completio
on of the work. Contract was te
erminated by IOCL on 08.01.20
025.
Thereafte
r, a show cause notice dated
27.01.2025, Annexure P-12, w
was
issued pro
oposing to place petitioner on h
holiday list for failure to compl
lete
the work
k within prescribed time. Pe
etitioner submitted its reply
on
10.02.202
25, Annexure P-13, and was af
fforded an opportunity of perso
onal
hearing. B
By the first impugned order d
dated 17.12.2025, Annexure P-
-18,
IOCL pla
aced petitioner on the holiday l
list for one year and he has b
een
debarred
from entering into contracts w
with IOCL. Some allegations w
were
leveled ag
gainst petitioner regarding defec
cts and deficiencies in material a
and
equipmen
nt supplied by it. By second impu
ugned order, Annexure P-20, issu
ued
on the sam
me day, a monetary demand of
f Rs.1,11,64,906.64 has been rai
ised
from the p
petitioner towards cost of execut
tion of balance work.
3.
Mr. Sanjay Kaushal, learned
d senior counsel for the petition
ner,
has urged
d that placement of petitione
r in the holiday list is found
ded
essentially
y upon the alleged delay and non
n-performance of contract, which
h is
a contract
tual dispute. He has emphasized
that there is no allegation of fra
aud,
corruption
n, dishonesty, misrepresentati
ion or misconduct against
the
SHEETAL
2026.09.02 17:37
I attest to the accuracy and
authenticity of this order/judgment
High Court, Chandigarh
petitioner
r. He submits that although petiti
ioner submitted a detailed respo
onse

947-2025 (O & M)
-3-
CWP-389


to show c
cause notice, but it has not bee
en given due consideration bef
fore
passing th
he impugned orders. In the altern
native, it is his argument that pe
enal
action tak
ken against petitioner is not pr
roportionate to allegations leve
eled
against it.
He has placed reliance upon:-
(i) Isolators and I
Isolators through its proprie
etor
Sandhya Mishra Versus M
Madhya Pradesh, Madhya Kshe
etra
Vidyut Vitran Company Lim
mited and another , (2023) 8 S
SCC
607 ;
(ii) Blue Dreamz Adve
ertising Private Limited & anot
ther
Versus Kolkata Municipal C
Corporation and others, (2024)
15
SCC 264 ;
(iii) Techno Prints
Versus Chhattisgarh Textbo
ook
Corporation and another 20
025 SCC OnLine SC 343.

4.
Per contra, Mr. Ashish K
Kapoor, counsel for IOCL,
has
supported
d the impugned action and ha
as urged that petitioner failed
d to
perform c
contractual obligation within the
e stipulated period. He submits t
that
impugned
d action has been taken unde
er Clause 56 of the contract
tual
conditions
s, which empowers the IOCL t
to place a defaulting contractor
on
the holida
ay list. He has also made a ref
ference to Clause 6 of the Holid
day
Listing G
Guidelines of IOCL to contend
that petitioner has an efficaci
ous
remedy of
f filing an appeal before the spe
cified appellate authority, which
h he
has failed
d to avail and instant petition i
is not maintainable. Insofar as
the
monetary
demand raised vide impugned o
order, Annexure P-20 is concern
ned,
SHEETAL
2026.09.02 17:37
I attest to the accuracy and
authenticity of this order/judgment
High Court, Chandigarh
counsel c
contends that same arises purel
ly from a contractual relations
ship

947-2025 (O & M)
-4-
CWP-389


between t
the parties and involves disputed
d questions of fact which cannot
t be
adjudicate
ed in proceedings under Article 2
226 of Constitution of India.
5.
We have given due considera
ation to the arguments addressed
d by
counsel fo
or the parties and have perused th
he material referred to by them.
6.
The question relating to blac
cklisting or holiday listing stands
s on
a footing
distinct from ordinary contractu
ual remedies available to a tende
erer.
While te
ermination of contract, recov
ery of damages, risk and c
cost
consequen
nces or power to forfeiture may
flow from contractual stipulatio
ons,
but blackl
listing is a harsh penalty extendi
ing beyond a contract as it affec
ts a
contractor
r's commercial standing and ab
ility to participate in future pub
blic
contracts.
In Isolators and Isolators’
’s case (supra) , Supreme Co
ourt
interfered
d with the debarment and penalty
y orders upon finding that relev
vant
material a
and contractor's defence had not
received due consideration and t
that
penalty h
had been imposed without ad
dequate notice. In Blue Drea
amz
Advertisin
ng Private Limited’s case (
(supra) , Supreme Court drew
w a
n between a bona fide contr
distinction
actual dispute and conduct o
f a
contractor
r as would warrant, stigmatic con
nsequence of blacklisting. Supre
eme
Court obs
served that penalty of blacklis
sting may be imposed when it
t is
necessary
y to safeguard public interest
t from irresponsive or dishon
nest
contractor
r and in case, there is a genuine
e dispute between the parties ba
ased
on the ter
rms of the contract, penalty of b
lacklisting cannot be imposed. T
The
issue rec
ceived further consideration in
n Techno Prints’s case (supr
ra) ,
wherein S
Supreme Court emphasised that a
a contractor is not to be visited w
with
SHEETAL
2026.09.02 17:37
I attest to the accuracy and
authenticity of this order/judgment
High Court, Chandigarh
punitive
consequences of blacklisting m
merely on the alleged breach
of

947-2025 (O & M)
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CWP-389


contract.
The nature of conduct of a co
ontractor must possess a degree
e of
deviance
or aberration sufficient to ju
ustify the grave consequence
of
blacklistin
ng/debarment.
7.
Impugned action of holiday l
listing petitioner has to be tested
d on
the anvil
of the aforesaid principles. Sho
ow cause notice dated 27.01.20
025,
Annexure
e P-12, was issued to petitione
er alleging failure to complete
the
work with
hin the stipulated period. This w
was responded to by petitioner
r by
submitting
g a reply, wherein he alleged tha
at respondents were responsible
for
the delay.
It, therefore, amplifies that ther
re was a dispute between the par
rties
as to wh
ich of the two contracting par
rties were at fault. Petitioner h
had
specifical
ly stated that delay had occ
curred on account of site-rela
ated
impedime
ents attributable to IOCL. This
shows that dispute was regard
ding
performan
nce of contractual obligations
. There is no allegation agai
inst
petitioner
r regarding fraud, corruption,
forgery etc. A perusal of f
first
impugned
d order, Annexure P-18, shows t
that defence taken by petitioner
has
not receiv
ved consideration from IOCL. Th
he impugned order merely refers
s to
show cau
use notice and reply, followed
by reiteration of allegations. T
This
does not
satisfy the requirement of an
adjudicatory exercise particula
arly,
when the
penalty imposed has a serious
and a castigating impact upon
the
commerci
ial reputation of petitioner. As a
a result, this Court has come to
the
conclusio
n that impugned order, Annexu
ure P-18, cannot withstand judic
cial
scrutiny a
and is liable to be set aside.
8.
Insofar as the objection rais
sed by IOCL regarding availabi
ility
SHEETAL
2026.09.02 17:37
I attest to the accuracy and
authenticity of this order/judgment
High Court, Chandigarh
e is to notice that a xerox copy
of alterna
ate remedy is concerned, suffice
y of

947-2025 (O & M)
-6-
CWP-389


holiday li
sting guidelines of IOCL has be
en produced by Mr. Ashish Kap
poor
during the
e course of hearing. These guid
delines do not mention the date
e on
which the
ey were issued. Petitioner is also
o not shown to be signatory to th
hese
guidelines
s. Even if, there is any alternate
e remedy of filing an appeal un
nder
these guid
delines, same would not be app
licable as petitioner cannot be s
said
to be boun
nd by them.
9.
A different consideration w
would arise in relation to seco
ond
impugned
d order, Annexure P-20, where
eby IOCL has raised a monet
tary
demand. T
This demand is stated to include
e amounts relatable to execution
n of
unfinished
d work at petitioner's risk and c
cost and alleged deficiencies in
the
material a
as well as equipment supplied. T
The determination of the correctn
ness
of such
a demand would necessarily
require adjudication of dispu
uted
questions
relating to contractual performa
ance, responsibility of delay, sco
ope
and qual
ity of work undertaken, exp
penses incurred, reconciliation
of
accounts
and other related matters. The
ese disputes cannot fall within
the
realm of a
adjudication of a writ petition un
nder Article 226 of the Constitut
tion
of India
as they would require a d
etailed adjudicatory exercise
for
determini
ng liability of either of the parti
es. Furthermore, an examination
n of
the contra
actual agreement between the p
parties shows that Section 9 of
the
contract
agreement, Annexure P-4, pr
rovides for an alternate disp
pute
resolution
n machinery. It specifically pro
ovides for conciliation as well
l as
arbitration
n as alternate mechanism for res
solution of disputes and differenc
ces.
In view t
thereof, this Court does not int
end to examine the correctness
s or
SHEETAL
2026.09.02 17:37
I attest to the accuracy and
authenticity of this order/judgment
High Court, Chandigarh
otherwise
e of impugned order, Annexure P
P-20.

947-2025 (O & M)
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CWP-389


10.
Consequently, present petitio
on is disposed of in the follow
wing
terms:-

(i) first impugned order d
ated 17.12.2025, Annexure P-
-18,
whereby p
petitioner has been placed on a
holiday list, is quashed. Petitio
oner
shall not
suffer any disqualification in an
ny future tender process on acco
ount
of debarm
ment order, Annexure P-18;

(ii) insofar as second im
mpugned order dated 17.12.20
025
Annexure
e P-20 is concerned, this Court re
efrains from expressing any opin
nion
on merits
. Liberty is granted to petitione
er to challenge this order by tak
king
recourse t
to alternate remedy as mutually a
agreed upon between the parties
s by
virtue of
contract agreement, Annexure
P-4. In case, petitioner decides
s to
avail this
remedy, it shall be open to both
h the contracting parties to raise
e all
the issues
s before the authority concerned.
. Any such proceedings, if initiat
ted,
shall be a
adjudicated on their own merits
s, without being influenced by
the
setting as
ide of the order, Annexure P-18
8, or any observation made in t
this
judgment
.
11.
Pending miscellaneous app
plication(s), if any, shall sta
and
disposed o
of.






(SUVIR SEHGAL)
JUDGE
DE
(
26
EEPINDER SINGH NALWA
)

31.08.202
sheetal

)
JUDGE
Whether Speaking/reasoned Ye
Whether Reportable Ye
es
es

SHEETAL
2026.09.02 17:37
I attest to the accuracy and
authenticity of this order/judgment
High Court, Chandigarh