M/S Creation Advertising vs The Union Of India And Ors
- Court
- Gauhati High Court
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GAHC010027782026
2026:GAU-AS:6148
THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
Writ petition [c] no. 800/2026
M/s Creation Advertising, a proprietorship firm
having its registered office at Gitanjali Bhawan,
S.N. Bose Road, Deshbandhu Para, Siliguri –
734004 represented by Sri Soumen Das, Proprietor
of M/s Creation Advertising, Resident of Gitanjali
Bhawan, S.N. Bose Road, Deshbandhu Para,
Siliguri, Dist. – Darjeeling, West Bengal – 734004.
………………Petitioner
- VERSUS -
1. The Union of India, Represented by the Secretary
to the Government of India, Ministry of Petroleum
& Natural Gas, Shastri Bhawan, Janpath Road, New
Delhi – 110001.
2. The Indian Oil Corporation Limited, a Government
of India Enterprise represented by the Chief
General Manager, Indian Oil Corporation Limited
[IOCL], Indian Oil ADO State Office, Sector-III,
Noonmati, Guwahati - 781020, Assam.
3. The General Manager L.P.G. [Operations &Engg],
Indian Oil Corporation Ltd. [AOD State Office],
Sector-III, Noonmati, Guwahati - 781020, Assam.
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4. The Engineer-in-Charge, LPG Bottling Plant,
Dimapur, Indian Oil Corporation Ltd, Nagaland -
797103.
………………. Respondents
WitH
Writ petition [c] no. 804/2026
M/s Edison International, a proprietorship firm
having its registered office at 14, Lower Ground
Floor, T.N. Tower, A.T. Road, Guwahati – 781001,
Assam is being represented by Sri Heman Haloi,
Proprietor of M/s Edison International, R/o 14,
Lower Ground Floor, T.N. Tower, A.T. Road,
Guwahati – 781001, Assam.
………………Petitioner
- VERSUS -
1. The Union of India, Represented by the Secretary
to the Government of India, Ministry of Petroleum
& Natural Gas, Shastri Bhawan, Janpath Road, New
Delhi – 110001.
2. The Indian Oil Corporation Limited, a Government
of India Enterprise represented by the Chief
General Manager, Indian Oil Corporation Limited
[IOCL], Indian Oil ADO State Office, Sector-III,
Noonmati, Guwahati - 781020, Assam.
3. The General Manager L.P.G. [Operations & Engg],
Indian Oil Corporation Ltd. [AOD State Office],
Sector-III, Noonmati, Guwahati - 781020, Assam.
Page 3 of 23
4. The Engineer-in-Charge, LPG Bottling Plant,
Dimapur, Indian Oil Corporation Ltd, Nagaland-
797103.
………………. Respondents
WitH
Writ petition [c] no. 805/2026
M/s Rhino Enterprise, a partnership firm having its
registered office at Simlaguri, Barpeta Road, Dist:
Barpeta, Assam – 781313 is being represented by
Md. Mahirul Islam, Partner of M/s Rhino Enterprise,
R/o Simlaguri, Barpeta Road, Dist. Barpeta, Assam
781313.
………………Petitioner
- VERSUS -
1. The Union of India, Represented by the Secretary
to the Government of India, Ministry of Petroleum
& Natural Gas, Shastri Bhawan, Janpath Road, New
Delhi – 110001.
2. The Indian Oil Corporation Limited, a Government
of India Enterprise represented by the Chief
General Manager, Indian Oil Corporation Limited
[IOCL], Indian Oil ADO State Office, Sector-III,
Noonmati, Guwahati - 781020, Assam.
3. The General Manager L.P.G. [Operations & Engg],
Indian Oil Corporation Ltd. [AOD State Office],
Sector-III, Noonmati, Guwahati- 781020, Assam.
Page 4 of 23
4. The Engineer-in-Charge, LPG Bottling Plant,
Dimapur, Indian Oil Corporation Ltd, Nagaland-
797103.
………………. Respondents
BeFore
Hon’BLe Mr. JUStice MAniSH cHoUDHUrY
Advocates :
Advocate for the Petitioner : Mr. N.N.B. Choudhury, Advocate
Advocate for the Respondent no. 1 : Mr. B. Chakraborty, CGC
Advocate for the respondent nos. 2, 3 & 4 : Mr. M. Sarma, learned Standing
Counsel, IOCL
Date of hearing : 17.03.2026
Date of pronouncement of judgment : 06.05.2026
Whether the pronouncement is of the
Operative part of the judgment ? : No
Whether the full judgment has been
Pronounced ? : Yes
JUDGMent & orDer
[M. Choudhury, J]
1. All the three writ petitions have been preferred under Article 226 of the
Constitution of India to assail three separate Orders, all dated 22.01.2026,
whereby each of the petitioners has been placed on the Holiday List by the
respondent Indian Oil Corporation Limited [hereinafter also referred to as ‘IOC
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Limited’ or ‘IOCL’, or ‘respondent Corporation’, at places, for easy reference] for
a period of one year each. By the Orders, similar in nature, a direction has been
passed to make recovery of different amounts from the petitioners.
2. As the exchange of pleadings in all the three writ petitions is complete, the writ
petitions are taken up for consideration together, as sought for by the learned
counsel for the parties on the premise that the issues involved in all of them are
similar in nature.
3. Before any dilation on the issues raised and involved in the writ petitions, the
factual matrices require exposition for a better appreciation of the rival
contentions of the parties.
Writ Petition [C] no. 804 of 2026
4. A tender process was initiated by the respondent IOCL authorities vide Tender
no. RCC/PRO/37/2020-21/PT-108 for award of a contract on the subject : ‘Rate
Contract for Carrying out Capital and Revenue Works at Retail Outlets
[Including KSKs], Consumer Pumps, Depots, Terminals, Lube & LPG Plants,
Aviation Fueling Stations, Buildings, etc. under Tinsukia Divisional Office of
Indian Oil AOD State Office’.
5 In response to the tender process, the petitioner firm being a registered Vendor
under the respondent IOC Limited with Vendor no. 10231735, submitted its bid.
Upon evaluation of the bids, the petitioner firm emerged as the successful
bidder in respect of two jobs. The petitioner was issued a Purchase Order no.
28025147 on 31.07.2022 along with a Schedule of Rate in reference to Tender
no. 7504210201 and Contract Ref. no. 12024312 for a work :- ‘Revamping of
Fire Engine Room at LPG Bottling Plant, Dimapur’. The Purchase Order Value
was Rs. 13,37,030.40. The petitioner was issued another Purchase Order no.
28098139 on 26.08.2022 along with a Schedule of Rate in reference to Tender
no. 75044210201 and Contract Ref. no. 12024312 for a work :- ‘Revamping of
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Inner Boundary Wall at LPG Bottling Plant, Dimapur’. The Purchase Order Value
was Rs. 24,36,084.25.
6. The petitioner has stated that on issuance of the two Purchase Orders, it
proceeded to execute both of them and completed the works on 17.11.2022
strictly as per drawings, specifications, instructions, etc. issued by the
Engineers of the respondent IOC Limited and also under the continuous
supervision of the Site Engineers of the IOC Limited. After Completion of the
two works, the final measurements were duly recorded, verified and certified
by the Engineer-in-Charge of the IOC Limited. Based on the certified
measurements, the Service Entry Sheets [SESs] were generated, and the final
bills were processed and paid to the petitioner without any adverse remarks or
objections at that time.
7. The petitioner has stated that after successful execution of the two works, the
Defect Liability Periods [DLPs] started and the DLPs were also over in the year
2023. Even during the DLPs, no discrepancy, objection or allegation regarding
the quantities or payments charged for the two executed works were ever
raised by any of the authorities in the IOC Limited. Suddenly on 07.10.2025, a
Show-Cause Notice was issued to the petitioner in reference to Purchase Order
no. 28025147 dated 31.07.2022 and Purchase Order no. 28098139 dated
26.08.2022. In the Show-Cause Notice, it was inter-alia mentioned that during
a recent verification / inspection of the quantities executed under the two
Purchase Orders, it was observed that quantities billed were more than the
actual quantities executed for both the Purchase Orders and the same had
resulted in excess payments of Rs. 3,53,634.91 [excluding GST] and Rs.
3,64,777.00 [excluding GST] respectively. By referring to the Holiday Listing
Guidelines dated 19.01.2023, more particularly, Clause 2.1 [a] thereof, the
petitioner was asked to show cause in writing within fifteen days as regards the
alleged irregularities and as to why the petitioner should not be placed on the
‘Holiday List’ and debarred from entering into any contract with the IOC Limited
/ be not de-listed from the list of approved Vendors / Contractors of the IOC
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Limited. It was mentioned that the Reply, if any, should be supported by all
documents and evidence which the petitioner would wish to rely in support of
its Reply. It was further mentioned that in the event of failure to give any Reply
within the time and manner aforesaid, it would be presumed that the petitioner
had nothing to say in the matter and the matter would be proceeded
accordingly.
8. On receipt of the Show-Cause Notice, the petitioner submitted its Reply on
20.10.2025 responding to the allegations made regarding excess payments of
Rs. 3,53,634.91 and Rs. 3,64,777.00 and purported irregularities in execution of
the two works awarded vide Purchase Order no. 28025147 dated 31.07.2022
and Purchase Order no. 28098139 dated 26.08.2022. It was stated that both
the works were completed on 17.11.2022 and the petitioner had submitted the
final bills along with the Measurement Books and accordingly, payments of Rs.
13,31,579,64 and Rs. 24,29,004.50 were released. The petitioner had
highlighted that while carrying out the works, the petitioner was instructed to
do some extra works by the Engineer-in-Charge. Though the extra works were
not included in the Purchase Orders, the Engineer-in-Charge had assured that
the amounts would be adjusted in the Purchase Orders. In view of the good
relation, the petitioner had carried out the extra works also as instructed by the
Engineer-in-Charge. The extra works having total amounts of Rs. 3,41,840.44
and Rs. 3,56,802.13 respectively were included in the Measurement Books and
submitted to the Engineer-in-Charge in order to proceed for executing the extra
works.
9. After submission of the Reply, the impugned Order has been passed on
22.01.2026 whereby the decision to place the petitioner on the Holiday List has
been communicated. By the impugned Order, the petitioner has been debarred
from entering into any contract with the IOC Limited for a period of one year
effective from 22.01.2026 and removed from the list of approved Vendors /
Contractors. In addition, the petitioner has been given instruction to refund and
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deposit the excess amount of Rs. 7,18,411.91 [= Rs. 3,53,634.91 + Rs.
3,64,777.00] to the IOC Limited.
Writ Petition [C] no. 800 of 2026
10. The petitioner herein is a proprietorship firm and it is a registered Vendor of the
respondent IOC Limited with Vendor no. 10184094. In the tender process
initiated by the respondent IOC Limited vide Tender no. RCC/ERO/37/2020-
2021/Pt-108 for award of contract on the subject : ‘Rate Contract for Carrying
out Capital and Revenue Works at Retail Outlets [Including KSKs], Consumer
Pumps, Depots, Terminals, Lube & LPG Plants, Aviation Fueling Stations,
Buildings, etc. under Tinsukia Divisional Office of Indian Oil AOD State Office’,
the petitioner firm was issued two Purchase Orders on 16.06.2022 and
18.10.2022 respectively.
11. The petitioner firm was issued a Purchase Order bearing no. 27906400 on
16.06.2022 in reference to Tender no. 7504210201 and Contract Ref. no.
12024262 for a work : ‘Construction of New Cylinder Stacking Yard at LPG
Botling Plant, Dimapur, Nagaland – 797103’. The Purchase Order value was Rs.
6,15,163.80. The petitioner was also issued a Purchase Order no. 28248175 on
18.10.2022 for another work : ‘Construction of Cylinder Repainting Shed at LPG
Botling Plant, Dimapur’ with a Purchase Order value of Rs. 9,81,489.04.
12. The petitioner has asserted that on being awarded the two works, it had
successfully executed both of them within the stipulated time periods. The work
assigned by Purchase Order no. 27906400 was completed on 29.07.2022
whereas the work assigned by Purchase Order no. 28248175 was completed on
23.12.2022. The petitioner has stated that the final measurements were duly
recorded, verified and certified by the Engineer-in-Charge of the respondent
IOC Limited. Based on those certified measurements, the Service Entry Sheets
[SESs] were generated. For the Purchase Order no. 27906400, the petitioner
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was paid Rs. 6,15,016.73. The petitioner was paid a total amount of Rs.
9,79,137.53 for the work executed against Purchase Order no. 28248175.
13. After successful execution of the two works, the DLPs started and the DLPs
were also in 2023. It is asserted by the petitioner firm that during the DLPs, no
discrepancy, objection or allegation regarding the quantities or payments
charged for the two executed works was raised by the respondent IOCL
authorities. Subsequently, to the surprise of the petitioner, a Show-Cause Notice
dated 07.10.2025 was served upon the petitioner in reference to the afore-
mentioned two Purchase Orders. In the Show-Cause Notice, it was inter alia
mentioned that during a recent verification / inspection of the quantities
executed under the two Purchase Orders, it was observed that the quantities
billed were more than the actual quantities executed and the same had resulted
in excess payments of Rs. 42,465.12 and Rs. 2,92,923.00 respectively. By
referring to the Guidelines dated 19.01.2023 of Holiday Listing, more
particularly, Clause 2.1 [a] thereof, the petitioner was asked to show cause in
writing within fifteen days as regards the alleged irregularities and as to why
the petitioner should not be placed on the ‘Holiday List’ and debarred from
entering into any contract with IOC Limited / be not de-listed from the list of
approved Vendors / Contractors of IOC Limited. As the contents of the Show-
Cause Notice are similar to the contents of the Show-Cause Notice served upon
the petitioner in W.P.[C] no. 804/2026, the same are not repeated for brevity.
14. On receipt of the Show-Cause Notice, the petitioner submitted its Reply on
22.10.2025 responding to the allegations made regarding excess payments of
Rs. 42,465.12 and Rs. 2,92,923.00 respectively and purported irregularities in
execution of the two works awarded vide Purchase Order no. 27906400 dated
16.06.2022 and Purchase Order no. 28248175 dated 18.10.2022. It was
highlighted that the work contracts expired on 09.10.2023 and subsequently,
the DLPs were also over. It was mentioned that during the entire intervening
period, there was no correspondence, observation or intimation suggesting
about any discrepancy or irregularity in execution of the two works. The
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petitioner had stated that the works were executed strictly under the
supervision and guidance of the Site Engineer and the Engineer-in-Charge. The
Site Engineer reported daily to the concerned higher authorities in the IOC
Limited. The petitioner had highlighted that all measurements were taken by
the Site Engineer and the Engineer-in-Charge themselves and no separate
Measurement Book was prepared or submitted independently by the petitioner.
The invoices raised by the petitioner were based solely on the finalized
measurements duly approved by the authorized IOCL officials at the sites. By
the Reply, the petitioner requested to provide the following details : [i] specific
details of the alleged discrepancies in the Measurements Book; [ii] copies of the
relevant documents including the comparative measurements record; and [iii]
the date, time and names of the personnel present during any subsequent
measurement activity, if conducted; as without these details, according to the
petitioner, it would not be possible for it to meaningfully respond and defend its
case.
15. After submission of the Reply dated 21.10.2025, the impugned Order dated
22.01.2026 has been passed whereby the petitioner has been placed on the
Holiday List of the respondent IOC Limited. By the impugned Order, the
petitioner has also been debarred from entering into any contract with the IOC
Limited for a period of one year effective from 22.01.2026 and it has removed
from the list of approved Vendors / Contractors. The petitioner has also been
instructed to refund and deposit the excess amount of Rs. 3,35,388.12 [= Rs.
42,465.12 + Rs. 2,92,923.00].
Writ Petition [C] no. 805 of 2026
16. The petitioner is a partnership firm which is a registered Vendor under the IOC
Limited vide Vendor no. 11947454. Like the other two petitioners, the petitioner
firm herein was also awarded two works by the respondent IOC Limited. The
works were awarded to the petitioner firm vide Purchase Order no. 27886043
dated 07.06.2022 and Purchase Order no. 27981142 dated 14.07.2022.
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17. By Purchase Order no. 27886043, the petitioner firm was awarded the work of
‘Construction of Motorable Road in the Periphery of the License area of LPG
Bottling Plant, Dimapur, Nagaland – 797103’ and Purchase Order Value was Rs.
21,69,850.07 [excluding GST]. By the other work order, Purchase Order no.
27981142, the petitioner firm was awarded the work of ‘Construction and
Repair of Road at LPG Botling Plant, Dimapur’ and it had a Value of Rs.
25,40,967.52 [excluding GST].
18. It is the case of the petitioner firm that after being awarded the two works, it
had proceeded to execute the same and successfully completed both the works
within the stipulated time periods. The work assigned by Purchase Order no.
27886043 was completed on 02.09.2022 and the work assigned by Purchase
Order no. 27981142 was completed on 13.10.2022. The petitioner firm has
contended that it had executed the two works as per the drawings,
specifications, instructions, etc. issued by the Engineers of the IOC Limited. The
final measurements were duly recorded, verified and certified by the Engineer-
in-Charge of the respondent IOC Limited. Service Entry Sheets [SESs] were
thereafter generated based on those certified measurements and the final bills,
submitted by the petitioner firm for the two works, were processed and the
amounts found due were released to the petitioner. Against Purchase Order no.
27886043, an amount of Rs. 21,69,363.99 was released against the Purchase
Order Value of Rs. 21,69,850.07. On the other hand, an amount of Rs.
25,39,994.50 was released to the petitioner in respect of Purchase Order no.
27981142 which had a Value of Rs. 25,40,967.52.
19. Like the cases of the other two petitioners, the petitioner firm was also served
with a Show-Cause Notice dated 07.10.2025 on the same very grounds. By the
Show-Cause Notice, it was inter alia stated that during the recent verification /
inspection of the quantities executed under the two Purchase Orders, it was
found out that the quantities billed were more than the actual quantities
executed for both the Purchase Orders and the same had resulted in excess
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payments of Rs. 11,48,467.50 and Rs. 11,56,630.35 respectively. The contents
of the Show-Cause Notice dated 07.10.2025 served upon the petitioner were
similar to the Show-Cause Notices, dated 07.10.2025, served upon the other
two petitioners.
20. The Show-Cause Notice was responded to by the petitioner firm on 14.10.2025.
In the Reply submitted on 14.10.2025, the petitioner firm had asserted that the
entire works were executed under the strict supervision and direction of the
Engineer-in-Charge, who was a senior IOCL official. All technical decisions,
material approvals, and site instructions were provided by the Engineer-in-
Charge. It was mentioned that every stage of the works from site preparation
to completion was jointly inspected and approved by the Engineer-in-Charge
and his team and all activities were executed as per the approved methodology
and materials as per the IOCL’s quality standards and instructions received from
the Site officials. By the Reply, the petitioner firm requested the respondent
authorities to review the matter.
21. After submission of the Reply dated 14.10.2025, the impugned Order has been
passed on 22.01.2026. By the impugned Order, the petitioner has been placed
on the Holiday List of the respondent IOC Limited and debarred from entering
into any contract with IOC Limited for a period of one year effective from the
date of the impugned Order. The petitioner firm has also been removed from
the IOCL’s list of approved Vendors / Contractors. Additionally, the petitioner
firm has been instructed to refund and deposit the excess amount of Rs.
23,05,097.85 [= Rs. 11,48,467.50 + Rs. 11,56,630.35] within a period of seven
days from the date of the impugned Order failing which the respondent IOC
Limited would proceed to recover the amount as per the extant policy,
guidelines, tender conditions and applicable laws.
22. Being aggrieved by the impugned Orders, dated 22.01.2026, the petitioners
have preferred the three writ petitions assailing the impugned decision of the
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respondent IOC Limited to place them on the Holiday List for a period of one
year each and the direction to refund the alleged excess amounts.
23. I have heard Mr. N.N.B. Choudhury, learned counsel for the petitioners; Mr. B.
Chakraborty, learned Central Government Counsel [CGC] for the respondent no.
1; and Mr. M. Sarma, learned Standing Counsel, Indian Oil Corporation [IOC]
Limited for the respondent nos. 2, 3 & 4.
24. Mr. Choudhury, learned counsel for the petitioners in all the three writ petitions
has submitted that the sequence of events followed in case of all the three
petitioners are similar in the sense that all the petitioners were issued Purchase
Orders for certain works with definite limits. All the petitioners executed the
works assigned through the Purchase Orders fully and thereafter, they were
issued Completion Certificates. On issuance of Completion Certificates, the
petitioners submitted Final Bills in the year 2022. The Final Bills were checked,
verified and certified by the Engineer-in-Charge with the final measurements.
Based on the certified measurements, the petitioners were paid the Final Bills
according to the final measurements. The final Measurement Books / Sheets
were duly maintained by the authorities in the respondent Corporation. The
petitioners duly carried out their obligations during the DLPs too. But, on the
basis of certain inspection carried out behind their back and the reports
submitted thereafter, the petitioners were served with the Show-Cause Notices
on 07.10.2025 in reference to the Holiday Listing Guidelines dates 19.01.2023.
Such Holiday Listing Guidelines were not in vogue when the works awarded by
the Purchase Orders were completed. It is his contention that the respondent
Corporation had misconceivably invoked the provisions of such Guidelines
retrospectively to penalize the petitioners wrongfully. The allegation that the
quantities billed were more than the actual quantities executed was foisted
upon the petitioners without any basis. The Show Cause Notices mentioned
about a verification / inspection of the quantities executed at the Sites and
relevation about extra / additional items executed not included in the Purchase
Orders or the quantities billed were more than the quantities executed. He has
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submitted that though the impugned Orders do not mention about any
Vigilance Report or Joint Inspection Report but it has come to light from the
responses filed by the respondent Corporation that the decision to place the
petitioners on the Holiday List was taken on the basis of a Vigilance Report and
a Joint Inspection Report pursuant to a complaint. When the petitioners asked
for the relevant records pertaining the verification / inspection those were not
furnished on the ground that those were internal reports. When the Vigilance
Report and the Joint Inspection Report had become the basis behind the
impugned action and the findings recorded therein had influenced the decision
of the respondent Corporation it was incumbent upon the respondent
Corporation to furnish the copies of those Reports to the petitioners so as to
afford the petitioners a proper and effective opportunity of meeting the cases
and to rebut the allegation. Apart from such refusal, the respondent
Corporation also refused to carry out a verification exercise at the Sites in
presence of the petitioners, when requested. Mr. Choudhury has contended that
the respondent Corporation had proceeded in the cases against the petitioners
in sheer violation of the principles of natural justice. Mere service of a show
cause notice would not serve the cause of justice. Non-disclosure of the vital
materials which had influenced the final decision has made the decision-making
process of the respondent Corporation, an instrumentality of the State, an
unfair one. He has referred to the decisions of the Hon’ble Supreme Court of
India in M/s Erusian Equipment & Chemicals Limited vs. State of West
Bengal and another, [1975] 1 SCC 70; and Gorkha Security Services vs.
Government [NCT of Delhi] and others, [2014] 9 SCC 105 .
25. Per contra, Mr. Sarma, learned Standing Counsel, IOCL appearing for the
respondent nos. 2, 3 & 4 has referred to the statements and averments made
in the affidavits-in-opposition filed on behalf of the said respondents in each of
the writ petitions. The stand taken in the affidavits-in-opposition is similar. He
has submitted that after completion of the works awarded vide the Purchase
Orders having definite monetary limits, the petitioners were paid the amounts
as raised in the final bills. Subsequently, a detailed enquiry was carried out by
Page 15 of 23
the Vigilance Department of the respondent Corporation based on a complaint
received. During February 2023, a random checking of some of the Purchase
Orders including the Purchase Orders issued to the petitioners was carried out
and a visit was made to the respective site. During such visit, it was observed
that excess payments were made to the petitioners. Therefore, in order to
assess the extent of excess payments, detailed measurements and verifications
were carried out during August, 2023 – September, 2023 by two Engineering
Officers from the Divisional Office and the officials of the Vigilance Department
and the Plant. During the verification process, it was revealed that the
quantities billed by the petitioners were more than the actual quantities
executed and the same had resulted in excess payments to the extents
indicated in the respective Show-Cause Notices, issued on 07.10.2025. Mr.
Sarma has submitted that the Show-Cause Notices were issued in terms of
Clause 2.1[a] of the Holiday Listing Guidelines dated 19.01.2023. He has
further submitted that actions have been taken against the petitioners based on
the conclusions recorded in a Report of the Vigilance Department of the
respondent Corporation. The actions were initiated in accordance with the
comments made by the Vigilance Department. He has contended that any extra
items or deviation in works contracts can only be approved by the competent
higher authority and in the cases of the petitioners, no approval for any
additional works, as claimed, in respect of the Purchase Orders issued to the
petitioners was available. The respondent Corporation had also initiated and
taken action against two of its employees as they were found to be acting in
collusion with the petitioners, who had billed quantities in excess of the actual
works done. It is his contention that since the actions were taken as per the
Holiday Listing Guidelines of the respondent Corporation and after affording
due opportunity to the petitioners by serving them Show-Cause Notices, no
interference to any of the impugned Orders, dated 22.01.2026, is called for. He
has submitted that the writ petitions lack merit and are liable to be dismissed.
Page 16 of 23
26. I have given consideration to the submissions made by the learned counsel for
the parties and have also gone through the materials brought on record by the
parties through their pleadings apart from the decisions cited at the Bar.
27. Clause 2.1[a] of the Holiday Listing Guidelines dated 19.01.2023 has provided
the authority to place a party on Holiday List if the party has been found
indulging in malpractices such as bribery, corruption, fraud, pilferage, bid
rigging / price rigging or to cause injury to reputation or property of the
Corporation, acting dishonestly to cause wrongful financial loss to the
Corporation or to make wrongful gain to itself. The Holiday Listing Guidelines
published on 19.01.2023 do not have any statutory flavour and could not have
applied retrospectively. In the Show-Cause Notices, it is discernible that the
allegation brought against the petitioners was to the effect that the petitioners
acting dishonestly had caused wrongful loss to the respondent Corporation or
had made a wrongful gain to themselves. It is, therefore, required to find out
on what basis the respondent Corporation has arrived at a finding in affirmation
of such an allegation and also the process followed to reach such a decision.
28. Holiday Listing is similar to blacklisting or debarment. In the Holiday Listing
Guidelines – 2015 of the respondent Corporation, placed before this Court, it is
mentioned that the meaning of ‘blacklisting’, ‘holiday listing’, ‘debarment’ and
‘banning’ is legally one and the same. In M/s Erusian Equipment &
Chemicals Ltd. vs. State of West Bengal and another, [1975] 1 SCC 70 , it has
been held that a blacklisting order does not pertain to any particular contract.
The blacklisting order involves civil consequences. It casts a slur. Blacklisting
tarnishes one’s reputation. Blacklisting has the effect of preventing a person
from the privilege and advantage of entering into lawful relationship with the
Government for purposes of gains. The fact that a disability is created by the
order of blacklisting indicates that the concerned authority is to have an
objective satisfaction. Fundamentals of fair play require that the person
concerned should be given an opportunity to represent his case before he is put
on the blacklist.
Page 17 of 23
29. The fundamental purpose behind service of a show-cause notice is to make the
noticee understand the precise case set up against him which he has to meet.
In Gorkha Security Services vs. Government [NCT of Delhi] and others,
[2014] 9 SCC 105 , it has been held that the show-cause notice would require
the statement of imputations detailing out the alleged breaches and defaults
the noticee has committed, so that the noticee gets an opportunity to rebut the
same. In order to fulfill the requirements of principles of natural justice, a
show-cause notice should meet the twin requirements, firstly, the material /
ground is to be stated which according to the department necessitates an
action; and secondly, the particular penalty / action which is proposed to be
taken.
30. It is discernible from the responses of the respondent Corporation that a
random checking of some Purchase Orders was carried out at the Sites in
February, 2023 during a visit by officials of the Vigilance Department of the
respondent Corporation and it was observed during such checking that excess
payments were made to the Vendors / Contractors in respect of some items of
the Purchase Orders. A recommendation was made by the Vigilance Officials on
11.04.2025 as regards such excess payments. To assess the quantity of excess
payments, detailed measurements were said to be carried out during August,
2023 – September, 2023 by two Engineering Officers from the Divisional Office
in presence of Plant Officials and Vigilance Department Officials and a Joint
Inspection Report was prepared and submitted. In the Joint Inspection Report,
excess payments were reported to have been made in respect of four Vendors :
M/s Creation Advertising, M/s Edison International, M/s Rhino Enterprise, M/s
B.K. Construction, and those excess payments were quantified. Thereafter, the
Show-Cause Notices were issued to the said Vendors / Contractors on
07.10.2025.
31. A Committee was formed as per the Holiday Listing Guidelines of the
respondent Corporation for scrutinizing the Replies received from the Vendors /
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Contractors in response to the Show-Cause Notices. The Committee scrutinised
the Replies of the four Vendors / Contractors including the petitioners herein
and the facts and circumstances of the cases for decision. In order to arrive at
a decision, the Committee studied and analysed few documents namely, [i] the
Show-Cause Notices issued to the four Vendors / Contractors for Holiday
Listing; [ii] the Replies given by the four Vendors / Contractors including the
petitioners against the Show-Cause Notices; [iii] Vigilance recommendation
dated 11.04.2025; and [iv] Analysis and Report of the Vigilance Department
including the Joint Inspection Report.
32. The Committee examined the Replies of the petitioners to the Show-Cause
Notices. With regard to a request to supply a copy of the Joint Inspection
Report and the other documents regarding measurements by the Vendors, the
Committee observed that those were internal documents of the respondent
Corporation and the same could not be shared with the Vendors / Contractors.
With regard to another request for joint inspection of the works executed
against the Purchase Orders in presence of the Vendors, the Committee
observed that joint measurements were already carried out during August,
2023 – September, 2023 by two Engineering Officers from the Divisional Office
in presence of Plant Officials and Vigilance Officials and further joint re-
verification in presence of the Vendors could be carried out only after obtaining
approval from the competent authority. It is not known that there was any final
decision of the competent authority on such joint inspection requested by the
Vendors. The Committee in its Report had recommended for a minimum
penalty of Holiday Listing for a period of one year. The penalty was
recommended with reasoning that joint verification in the presence of the
parties was not done. Recovery of excess amounts was proposed by the
Vigilance Department purportedly on the ground that the four Vendors did not
deny that payments were made in excess of the Purchase Order quantities.
After the Report of the Committee, the impugned Orders of Holiday Listing have
been passed on 22.01.2026.
Page 19 of 23
33. As per the General Conditions of Contract [GCC] pertaining to the Purchase
Orders, ‘Completion’ or ‘Final Completion’ means the successful provision of all
materials and inputs and the successful completion and conclusion of all
activities required in all respects to complete the contractual works in
accordance with the contract, but shall not include the obligation to rectify
defects during the Defect Liability Period [DLP]. ‘Completion Certificate’ means
the Completion Certificate issued by the Engineer-in-Charge in accordance with
the provisions thereof. The ‘Engineer-in-Charge’ means the Engineer or other
officer of the Owner, Consultant or other organization for the time being
nominated by the Owner in writing to act as Engineer-in-Charge for the
purpose of the Contract or any specific works; and the ‘Site Engineer’ means
the Engineer[s] / Officer[s] for the time being designated by the Engineer-in-
Charge as his representative[s] in writing, and authorized by him to assist him
in performing his duties and functions for the purpose of the Contract.
34. The General Conditions of Contract [GCC] had also provided for the procedure
to prepare the Final Bill and to make payment on the basis of the Final Bill. On
the basis of the final measurements entered in the Measurements Books /
Sheets, the Contractor-Vendor had to prepare and submit to the Engineer-in-
Charge a Final Bill in the prescribed form with reference to the total works
covered by the Contract and such Final Bill was to be drawn up by applying the
applicable rates specified in the Schedule of Rates to the relative measured
quantities. If there was any difference or dispute between the Contractor and
the Owner as to the items, etc., the decision of the Engineer-in-Charge was to
be held as final and binding upon the Contractor. The Final Bill drawn was to be
submitted to the Engineer-in-Charge for certification accompanied by the
Completion Certificate relating to the works. The Final Bill so drawn was
checked, corrected and certified by the Engineer-in-Charge for forwarding it to
the Owner for scrutiny and payment.
35. In all the cases, the petitioners submitted the Final Bills against the Purchase
Orders in the prescribed form after issuance of the Completion Certificates. The
Page 20 of 23
Final Bills were checked, corrected and certified by the Engineer-in-Charge and
were forwarded for scrutiny and payment together with the Completion
Certificates. The amounts to the extent admitted by the respondent
Corporation on the certified Final Bills were released to the petitioners. It is the
case of the petitioners that all the works were carried out in strict supervision of
the Site Engineer and the Engineer-in-Charge. After completion of the works
and payments, the petitioners had duly carried out their duties during the
Defect Liability Period [DLP] of one year without any complaint, objection, or
adverse remark. There is no denial of the respondent IOCL authorities to the
above assertions made by the petitioners.
36. From the Show-Cause Notices dated 07.10.2025 and the impugned Orders
dated 22.01.2026, it is evidently clear that the findings recorded in a Vigilance
Report dated 11.04.2025 and a Joint Inspection Report had influenced the
decision of the respondent Corporation to take the drastic measure of Holiday
Listing against the petitioners as well as the decision to recover the alleged
excess payment amounts. The Vigilance Report and the Joint Inspection Report
were prepared and submitted prior to the issuance of the Show-Cause Notices
on 07.10.2025. The Vigilance Report and the Joint Inspection Report were
prepared after carrying out inspection of the works carried out by the
petitioners, which were completed in the year 2022. Both the Reports were
prepared behind the back and without the knowledge of the petitioners after
inspection at the Sites in February, 2023 and August, 2023 – September, 2023.
Neither the Vigilance Report nor the Joint Inspection Report was brought to the
notice of the petitioners at any point of time earlier to 22.01.2026.
37. When the petitioners requested to furnish those reports to them in the Replies
submitted in response to the Show-Cause Notices, there was disinclination on
the part of the respondent Corporation to supply them to the petitioners on the
ground that those were internal reports of the respondent Corporation whereas
it was all the more necessary to supply the copies of the Vigilance Report and
the Joint Inspection Report to the petitioners prior to taking any adverse action
Page 21 of 23
against them for adherence to the principles of natural justice, which calls for
affording them a real, meaningful and effective opportunity to meet the cases
set up against them. Even while serving the impugned Orders dated
22.01.2026, the copies of the Vigilance Report and the Joint Inspection report
were not supplied to the petitioners. The petitioners were kept in dark about
the manner in which the excess amounts for recovery had been arrived at. The
respondent Corporation in the impugned Orders did not traverse the contention
of the petitioners made in the Replies that some extra works were carried out
while executing the Purchase Orders at the instructions of the Engineer-in-
Charge and the Site Officials and it was assured that the amounts incurred
towards the extra works would be adjusted.
38. The proceedings initiated by a show-cause notice to a noticee, for the purpose
of blacklisting the noticee, must be in strict compliance with the principles of
natural justice. For such compliance, a real, meaningful and effective
opportunity must have to be afforded to the noticee to show cause against the
same. A fair hearing to the noticee proposed to be blacklisted is an essential
pre-condition for a proper exercise of the power to place the noticee on the
blacklist.
39. An adjudicatory authority, be it administrative or quasi-judicial, is not to base its
decision if such decision has an impact on right of a party, on any material
unless the person against whom it is going to be used has been apprised of it
and given an opportunity to respond to it. If the authority is to rely on any
material or document for its decision against a party, then the same must be
brought to his notice and he should be given an opportunity to respond to it. It
is regarded as the fundamental principle of natural justice that no material
ought to be relied on against a party without giving him an opportunity to
respond to the same. The right to know the material on which the authority is
going to base its decision is an element of the right to defend oneself. If
without disclosing any material to the party, the authority takes it into its
consideration, and decides the matter against the party basing on such material
Page 22 of 23
then the decision is vitiated for its amounts to denial of a real, meaningful and
effective opportunity to the party to meet the case against him.
40. In T. Takano vs. Securities and Exchange Board of India and another,
[2022] 8 SCC 162 , a show cause notice was issued to the appellant based on a
report after conducting an investigation. The appellant responded to the show
cause notice stating inter alia that the investigation report was not received by
him. The respondent authority denied to share the investigation report with the
appellant stating that the report is an internal document. The investigation
report was found to have been taken into consideration by the respondent
authority in arriving at its satisfaction for taking action against the appellant. In
that context, the Hon’ble Supreme Court has observed that as the investigation
report has been relied upon at the stage of adjudication by the authority, then
the principle of natural justice required its due disclosure.
41. In Southern Painters vs. Fertilizers & Chemicals Travancore Ltd. and
another, 1994 Supp. [2] SCC 699 , the Hon’ble Supreme Court has referred to
a dissenting opinion rendered in a Full-Bench decision of the Kerala High Court
in V. Punnen Thomas vs. State of Kerala, AIR 1969 Ker 81 . In the dissenting
view, it was inter-alia observed that an ex parte adverse adjudication that the
petitioner committed irregularities in connection with the tender on the basis of
a report of an officer without notice and an opportunity of being heard to the
petitioner and putting his name in the blacklist and debarring him from taking
any work by way of punishment is against all notions of fairness. The Hon’ble
Supreme Court has affirmed that the minority view as the law. It has been held
in the case that the deletion of the appellant’s name from the list of approved
contractors on the ground that there were vigilance report against it could only
be done consistent with and after due compliance with the principles of natural
justice.
42. From the facts and circumstances obtaining as above, it is evidently established
that the respondent IOCL authorities have arbitrarily denied the petitioners a
Page 23 of 23
real, meaningful and effective opportunity of being heard before being visited
with the drastic penalty of the Holiday Listing for a period of one year by the
impugned Orders, dated 22.01.2026. To take the action of Holiday Listing, the
respondent IOCL authorities have referred to the Holiday Listing Guidelines
dated 19.01.2023, which were issued much after the execution of the
concerned Purchase Orders. By non-disclosure of the findings in the Vigilance
Report and the Joint Inspection Report to the petitioners and at the same time,
placing reliance on them to reach a satisfaction for taking the drastic measure
of Holiday Listing and recovery, the respondent IOCL authorities have
proceeded with in clear violation of the principles of natural justice and such an
action is to be termed as one against all notions of fairness. For the above
reasons, the impugned Orders dated 22.01.2026 are found not sustainable
having failed to stand the scrutiny of law. Therefore, the impugned Orders
dated 22.01.2026 are liable to be set aside and quashed and they are
accordingly, set aside and quashed.
43. Consequently, in view of the discussions and observations made, the findings
reached at, and the order made, as above, the writ petitions stand allowed.
There shall, however, be no order as to cost.
Digitally signed by Ananta
Konwar
Date: 2026.05.06 15:35:30
+05'30'
JUDGE
Comparing Assistant