Hindustan Petroleum Corp Ltd vs T N Selvarangam

  THE HON'BLE THE CHIEF JUSTICE SATISH CHANDRA SHARMA
                                             AND
            THE HON'BLE SRI JUSTICE A.RAJASHEKER REDDY

                               W.A.No.255 of 2020

JUDGMENT:      (Per the Hon'ble the Chief Justice Satish Chandra Sharma)



        The present writ appeal is arising out of the order dated

03.03.2020 passed by the learned Single Judge in W.P.No.13308 of

2017.

        The undisputed facts of the case reveal that an agreement

was     executed    between           the      appellants/Hindustan              Petroleum

Corporation Limited (HPCL) and the respondent before this court

for transportation of petroleum products to various places, for a period of five years, i.e., with effect from 01.03.2015 to 13.03.2020. The facts also reveal that there was some pilferage of the product (shortage of diesel) and in those circumstances, the appellants/HPCL conducted a domestic enquiry and after conducting the domestic enquiry, the appellants/HPCL passed an order dated 03.02.2017 terminating the contract and blacklisting the contractor. The facts of the case also reveal that no show cause notice of any kind was issued to the contractor before blacklisting and in those circumstances, the learned Single Judge has held the blacklisting to be improper. Accordingly, the order of blacklisting has been set aside. The learned Single Judge, at the same time, has also upheld the termination of contract. The appellants/HPCL are aggrieved only to the limited extent i.e., once the termination of contract was upheld, the question of release of security deposit does not arise and it could not have been ordered by the learned Single Judge.

This Court, after hearing learned counsel for the parties, is of the opinion that once termination of contract was upheld by the learned Single Judge, the order directing release of the security deposit could not have been passed as has been done in the matter.

Resultantly, the order passed by the learned Single Judge, to the extent release of security deposit has been ordered, stands set aside. However, it is made clear that the contractor shall be free to revoke the arbitration clause under the contract in respect of termination.

With the aforesaid, the writ appeal stands disposed of. Pending miscellaneous applications, if any, shall stand closed.

___________________________ SATISH CHANDRA SHARMA, CJ ___________________________ A.RAJASHEKER REDDY, J 19.11.2021 JSU