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Delhi High Court - Orders

Sandeep Kumar vs Union Of India & Anr on 5 March, 2021

Author: Prathiba M. Singh

Bench: Prathiba M. Singh

                                                                                          Signature Not Verified
                                                                                          Digitally Signed By:DINESH
                                                                                          SINGH NAYAL
                                                                                          Signing Date:08.03.2021
                                                                                          19:04:22


                                $~28
                                *    IN THE HIGH COURT OF DELHI AT NEW DELHI
                                +    W.P.(C) 2890/2021, CM APPLs. 8713/2021 & 8714/2021
                                     SANDEEP KUMAR                              ..... Petitioner
                                                     Through: Mr. Avtaar Singh, Advocate.
                                                               (M:9999789891)
                                                     versus

                                       UNION OF INDIA & ANR.                             ..... Respondents
                                                     Through:          Mr. Vivek Goyal, CGSC for UOI.
                                                                       Mr. S. Srish Kr. Advocate.
                                                                       (M:989911748)
                                       CORAM:
                                       JUSTICE PRATHIBA M. SINGH
                                                ORDER

% 05.03.2021

1. This hearing has been done through hybrid mode (physical and virtual hearing).

2. The present petition has been filed by the Petitioner challenging the action of Respondent No. 2 - Indian Oil Corporation Limited (hereinafter 'IOCL') in stopping the payment of its monthly running bills.

3. The case of the Petitioner is that it has entered into contracts with IOCL for providing vehicles to some of IOCL's refineries. The Petitioner currently has a total of four operational work orders, two each in the Delhi Refinery Division and Panipat Refinery Division of IOCL. The Petitioner has valid contracts with respect to these work orders, and monthly running bills pertaining to the same have been submitted to IOCL.

4. The dispute between the parties pertains to the finality of the contract pursuant to a tender process where the Petitioner participated for providing vehicles at the Mathura Refinery Division of IOCL. The case of the Petitioner is that it has no concluded contract with IOCL in respect of its Signature Not Verified Digitally Signed By:PRATHIBA M SINGH W.P.(C) 2890/2021 Page 1 of 3 Signing Date:08.03.2021 16:51 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:08.03.2021 19:04:22 Mathura Refinery Division. However, the stand of IOCL is that there is a concluded contract between the parties.

5. According to IOCL, the Petitioner refused to perform the concluded contract qua the Mathura Refinery Division. Consequently, IOCL terminated the contract pertaining to its Mathura Refinery Division and made allotment of the contract to a third party and imposed liquidated damages on the Petitioner. As per IOCL, under Clauses 7.0.9.0 and 8.16.1.0 of the contract, IOCL can hold back monies and securities under different contracts in order to recover its dues under the terminated contract.

6. This is disputed by the Petitioner who submits that if this interpretation is accepted by the Court, the Petitioner would not be entitled to the payment of invoice amounts with respect to its operational contracts with IOCL even while the amounts under the terminated contract are yet to be adjudicated. The invoice amounts run into lakhs of rupees in the operational contracts, wherein the Petitioner is paying toll tax, salaries for drivers, cost of diesel and incurring various other expenses which constitute about 97% of the running bills. Thus, this interpretation would completely put the Petitioner out of business inasmuch as the variable are less than 5% qua each of the invoices which has been submitted.

7. Accordingly, the Petitioner prays that the running bills qua the contracts pertaining to the Delhi Refinery Division and Panipat Refinery Division, ought to be honored by IOCL. The Petitioner's case is that there has been no adjudication of the liquidated damages imposed by IOCL on the Petitioner and no calculation or debit note has been raised till date, against the Petitioner. Ld. counsel appearing for IOCL seeks time to take instructions and also place on record the relevant documents.

8. It is not disputed that there are arbitration clauses in the running contracts between the parties. However, IOCL, apart from the terminating the contract with respect to its Mathura Refinery Division, has also put the Petitioner on a holiday period for one year i.e., Petitioner cannot enter into fresh contracts with IOCL for one year. The Petitioner submits that it has issued a legal notice questioning the said holiday period which is yet to be replied to by IOCL.

9. Be that as it may, the question in writ petition, at this stage, is whether IOCL can be directed to make the payments qua the other operational contracts, considering the large amount of expenses which the Petitioner is incurring. Ld. counsel for the Respondent seeks time to take instructions in the matter as to whether the reimbursement of expenses can be made, and if so, to what extent.

10. List on 22nd March, 2021.

PRATHIBA M. SINGH, J.

MARCH 5, 2021 Dj/Ap Signature Not Verified Digitally Signed By:PRATHIBA M SINGH W.P.(C) 2890/2021 Page 3 of 3 Signing Date:08.03.2021 16:51