M/S Pallab Saikia vs The Union Of India And 5 Ors on 19 March, 2026

Author: Manish Choudhury

Bench: Manish Choudhury

                                                                 Page No. 1/9

GAHC010055532026




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                      THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                         Case No. : WP(C)/1590/2026

         M/S PALLAB SAIKIA
         REPRESENTED BY ITS SOLE PROPRIETOR MR. PALLAB SAIKIA, AGED
         ABOUT 63 YEARS OLD, SON OF LATE MOHAN SAIKIA, RESIDENT OF
         PACHIM BONGAL PUKHURI, JORHAT EAST, ASSAM785001.
         VERSUS

         THE UNION OF INDIA AND 5 ORS.
         THROUGH THE MINISTRY OF PETROLEUM AND NATURAL GAS THROUGH
         ITS SECRETARY, A-WING, SHASTRI BHAWAN, DR. RAJENDRA PRASAD
         ROAD, NEW DELHI110001

         2:THE INDIAN OIL CORPORATION LIMITED (IOCL)
         THROUGH THE CHIEF GENERAL MANAGER
          INDIAN OIL CORPORATION LIMITED IOCL
          INDIAN OIL AOD STATE OFFICE
          SECTOR-III
          NOONMATI
          GUWAHATI
         ASSAM-781020.

         3:THE GENERAL MANAGER

          LPG (OPERATIONS)
          INDIAN OIL CORPORATION LIMITED IOCL
          INDIAN OIL AOD STATE OFFICE
          SECTOR-III
          NOONMATI
          GUWAHATI
          ASSAM- 781020

         4:THE MANAGER
          LPG (OS)
          INDIAN OIL CORPORATION LIMITED IOCL
          INDIAN OIL AOD STATE OFFICE
                                                                                  Page No. 2/9

             SECTOR-III
             NOONMATI
             GUWAHATI
             ASSAM- 781020.

            5:THE DEPUTY MANAGER
             LPG FINANCE
             INDIAN OIL CORPORATION LIMITED IOCL
             INDIAN OIL AOD STATE OFFICE
             SECTOR-III
             NOONMATI
             GUWAHATI
            ASSAM- 781020

            6:THE DEPUTY MANAGER
             LPG (SALES)
             INDIAN OIL CORPORATION LIMITED IOCL
             INDIAN OIL AOD STATE OFFICE
             SECTOR-III
             NOONMATI
             GUWAHATI
            ASSAM- 78102

Advocate for the Petitioner   : MR K TALUKDAR, MS C DAS

Advocate for the Respondent : DY.S.G.I., MR. S S ROY(C.G.C.)R1,SC, I O C


                                    BEFORE
                   HONOURABLE MR. JUSTICE MANISH CHOUDHURY

                                          ORDER

Date : 19.03.2026

Heard Mr. K. Talukdar, learned counsel for the petitioner; Mr. S.S. Roy, learned Central Government Counsel [CGC] for the respondent no. 1; and Mr. M. Sarma, learned Standing Counsel, IOCL for the respondent nos. 2 - 6.

2. The Indian Oil Corporation Limited [IOCL] published a Notice Inviting Tender [NIT] on 01.03.2025 inviting Bids under two-bid system from bidders for a contract-work, 'Bulk LPG transportation contract by road for the State of Assam & Meghalaya' ['the Transport Contract-Work', for short]. As per the Pre-Qualification Criteria [PQC]

prescribed in the NIT/Bidding Document, bidders must offer at least one owned Tank Truck [TT], as on the original closing date of tender, and the bidder should also possess a valid Petroleum Explosive Safety Organisation [PESO] license, as on the original date of closing date of tender, for carrying LPG.

3. Prior to the bid submission closure date, the respondent Corporation published a Corrigendum on 04.04.2025 to bringing certain changes in the terms and conditions of the NIT/Bidding Document. A new provision was introduced by the Corrigendum allowing a bidder to offer more than one TT if the bidder had entered into an Agreement to Sell [ATS] with owner[s] of TT[s] and if the bidder had entered into an ATS, then he can offer such TTs as owned TTs. As per the Corrigendum, in case of TTs offered under ATS were then in any existing contract[s] with any OMCs whose ownerships cannot be transferred during the pendency of the running contract and the formalities for transfer of ownership could not be completed as on the due date of the tender process initiated by the NIT dated 01.03.2025, both the seller and the purchaser [bidder] were to submit an affidavit as per the prescribed format along with the valid registration document and PESO license in the name of the seller. Such TTs shall be considered as the 'owned' trucks of the bidders for bid qualification and allocation purpose. It had been provided that in case the bidder would fail to submit the required documents with change of name in the Registration Certificate and PESO license. within four months of issuance of the Letter of Intent, suitable penal action would be taken, which would include forfeiture of EMD and caution money and also, termination order of such TTs and blacklisting of such TTs. In the Corrigendum, it was mentioned that under no circumstances, the timeline would be extended.

4. The petitioner apart from its owned trucks, had also offered TTs under ATS, which were executed with the sellers prior to submission of bid. After the bid closure date, the technical bids and the financial bids of the participant bidders were evaluated. Thereafter, the petitioner was issued Letter of Acceptance [LoA] on 16.09.2025. Subsequently, the petitioner was also issued Work Order to allow him to proceed with the Transport Contract-Work.

5. As stipulated in the Corrigendum, the petitioner could not place the and PESO license for the TTs in respect of which the petitioner had entered into ATSs, in its name A Show Cause Notice dated 05.03.2026 came to be served upon the petitioner while putting the concerned TTs under suspension with immediate effect. In the Show Cause Notice, it was inter alia mentioned that the petitioner had failed to submit the RC and the PESO license in its name within the stipulated time period of four months from the date of Letter of Acceptance [LoA] and therefore, it would call for action as stipulated specifically in the Clause mentioned in the Corrigendum in the following manner :-

In case the bidder fails to submit the required documents with change of name, etc. within 4 months of issue of LOI, suitable penal action shall be taken, which may include EMD forfeiture, caution money forfeiture, termination of order of such TTs and blacklisting of such TTs. Under no circumstances will the above- mentioned timeline be extended. In such cases, the contracting corporation reserves the right and shall be at liberty to induct TTs as per the methodology mentioned in the tender to fulfil the shortfall arising thereof.

6. The petitioner was asked to submit his Reply to the Show Cause Notice within a period of seven days as to why action in terms of the said Clause should not be taken. It was further mentioned that if the petitioner would fail to respond or provide an unsatisfactory response, the respondent Corporation would be left with no other option but to terminate the contract of such TTs along with other actions.

7. The learned counsel for the petitioner has submitted that the petitioner had entered into ATSs wherein the proposed sellers were under existing contracts of transportation with the respondent corporation only, with the term ending in August, 2025. The respondent corporation had, however, extended the terms of those contracts firstly, upto 30.10.2025 and thereafter, by another extension order, upto 31.12.2025. Due to such extensions, the petitioner could not complete the requisite formalities to obtain the RC and the PESO license within the window period of four months. A

Representation on behalf of the petitioner and similarly situated LoA holders was submitted by the Truck Owners Association, North East LPG [Bulk] before the respondent Corporation on 15.01.2026 to extend the time period upto 31.01.2026 so as to enable the LoA holders to complete all the formalities as regards RC and PESO license in respect of the TTs offered under ATSs. It is contended that in the Reply to the Show Cause Notice which was submitted within the time, all the difficulties faced by the petitioner due to extension of the term of the existing contracts of the proposed sellers with the respondent corporation upto 31.12.2025 and the consequential delay to complete formalities in obtaining the RC and the license of transfer of ownership and obtaining PESO licenses for the TTs offered under ATSs have been duly highlighted.

8. Mr. Talukdar, learned counsel for the petitioner has contended that in the Representation the causes why the requisite conditions could not be complied with within a period of four months from the LoAs were mentioned and from the reasons mentioned therein, it is evident that despite best endeavour from the end of the petitioner, the timeline stipulated in the NIT/Bidding Document could not be completed and for such causes which are evidently bona fide, the respondent corporation could not have issued the Show Cause Notice indicating penal actions. As it has been indicated in the Show Cause Notice that action would be initiated against the petitioner, the petitioner is before the Court challenging the Show Cause Notice and the Order of Suspension. Mr. Talukdar has submitted that after issuance of the LoA and the Work Order, the petitioner completed the formalities of obtaining the RC and the PESO license in his name subsequently, and before the date of the Show Cause Notice. The respondent corporation did not also suffer any loss as during the period upto 05.03.2026 as the TTs placed by the petitioner was allowed to operate till 05.03.2026.

9. Mr. Talukdar has strenuously contended that there was no occasion on the part of the respondent corporation to place the TTs under suspension at the time of issuance of the Show Cause Notice. The action of placing the TTs under suspension at the time of issuance of the Show Cause Notice is clearly with a premeditated, closed and biased mind. In such view of the matter, the Show Cause Notice along with the Order of

suspension are required to be stayed first and thereafter, quashed. As the petitioner has a strong case for stay of the Show Cause Notice, the respondent Corporation shall be restrained from giving effect to the Suspension Order passed for the concerned Tank Trucks [TTs] and from taking any further action, such as forfeiture, termination, etc. To buttress his submissions for the prayer for stay, Mr. Talukdar has referred to decisions in Siemens Limited vs. State of Maharashtra and others, [2006] 12 SCC 33; and Orix Fisheries Private Limited vs. Union of Indian and other, [2010] 13 SCC

427.

10. Mr. Sarma, learned Standing Counsel, Indian Oil Corporation Limited [IOCL] has submitted that the writ petition is premature for the reason that the competent authority in the respondent Corporation is yet to give consideration to the Reply to the Show Cause Notice to arrive at any final decision. He has further submitted that all the events which had occurred in the interregnum, have already been highlighted by the petitioner in the Reply to the Show Cause Notice and the same would be given due consideration and a decision as regards the further course of action shall be taken thereafter.

11. Mr. Sarma has submitted that by issuance of the Show Cause Notice, the noticee has been asked simply to respond to the proposed action. The petitioner has not assailed the validity of the Show Cause Notice on the ground of jurisdiction or otherwise. It is not a case that the legality or validity of the Show Cause Notice has been questioned by the writ petitioner on the ground that the respondent Corporation has no jurisdiction to issue Show Cause Notice. In the absence of any challenge on such counts in the present writ petition, the court is not to embark on any other issue at this stage.

12. In Siemens Limited [supra], it is held that when a notice is issued with premeditation, a writ petition would be maintainable. In such an event, even if the court directs the statutory authority to hear the matter afresh, ordinarily such hearing would not yield any fruitful purpose. While deciding the appeal in the afore-stated manner, the

Hon'ble Supreme Court looked at the contents of the Show Cause Notice and the counter affidavit of the respondents.

13. In Oryx Fisheries Private Limited [supra], a Show Cause Notice dated 23.01.2008 was issued to the appellant asking him to show cause as to why its Certificate of Registration should not be cancelled. The appellant replied to the Show Cause Notice on 04.02.2008 seeking to refute the allegations levied upon it and stated that it would not be justified to cancel its certificate of registration on the grounds mentioned therein. But the respondent without giving any reason and without giving the appellant any personal hearing, by an Order dated 19.03.2008, cancelled the registration certificate of the appellant. Thereafter, an appeal was preferred by the appellant, but the appeal was dismissed on 19.08.2008 holding that there was no lapse on the part of the authority who had cancelled the registration certificate of the appellant. It was thereafter, a writ petition was preferred by the appellant before the High Court and subsequently, the appeal was filed before the Hon'ble Supreme Court. One of the questions which fall for consideration was whether respondents in cancelling the registration certificate of the appellant acted fairly and in compliance with the principles of natural justice and also, whether the respondents acted with an open mind. The Hon'ble Court has stressed for disclosure of reason by a quasi-judicial authority in support of its order. The Hon'ble Court has further observed that the bias of the concerned authority which was latent in the show cause notice became patent in the order of cancellation of the registration certificate. The cancellation order was found to be a non-speaking one. The Hon'ble Court has further held that since the order was an appealable one, it was incumbent on the concerned authority to give adequate reasons. It was in such backdrop, the Hon'ble Supreme Court has held that a quasi-judicial authority while acting exercise of its statutory power must act fairly and must act with an open mind while initiating a show cause notice.

14. This Court is of the view that an authority, which has the power to appoint and the power to terminate, also has the power to suspend. An order of suspension does not assume penal character. But if it is a case of prolonged suspension then it assumes

penal character. In the case in hand, the petitioner has been placed in suspension on 05.03.2026 at the time of issuance of the Show Cause Notice and the petitioner has been asked to submit its Reply to the Show Cause Notice within a period of seven days. As on date, the period of suspension is less than two weeks.

15. The contents of the Show Cause Notice, annexed as Annexure-13 to the writ petition, are perused. Having gone through the same, this Court is not persuaded to reach a view, at this juncture, that the Show Cause Notice has been issued with a closed and biased manner. In such view of the matter, the prayer for interim relief is in the form of stay of Show Cause Notice and the Order of Suspension is called for at this stage.

16. Let notice be issued. The notice is made returnable on 27.04.2026.

17. As Mr. Roy has appeared and accepted notice on behalf of the respondent no. 1; and Mr. Sarma has appeared and accepted notices on behalf of the respondent nos. 2 - 6, issuance of formal notice in respect of the said respondents stand dispensed with. The learned counsel for the petitioner shall serve requisite nos. of extra copies of the writ petition along with annexures, to Mr. Roy and Mr. Sarma within 2 [two] working days from today.

18. The law regarding show cause proceeding is well settled in that the event of issuance show cause notice is a step towards taking a final decision in the matter by the competent authority. A tentative view taken in the process cannot be deemed to be the final view taken in the matter. The final view will always be dependent upon the response received from the noticee and if the noticee is able to show sufficient cause as to why no action has contemplated under the notice should not be taken. The final view may all together be different.

19. The issue of maintainability of the writ petition in the present facts and circumstances, is kept open for consideration on the returnable date.

20. The observations made hereinabove are tentative only, made for consideration of the interim prayer for stay and the same shall not be construed as final observation on the issues raised in the writ petition.

JUDGE

Comparing Assistant