Drillmec S.P. A Vs Oil India Ltd. (Guwahati High Court)
HC observed that provisions contained in Article 20 of the Constitution of India and Section 6 of the General Clauses Act, 1897 cannot be readily read into and applied to as the terms and conditions of a non-statutory contract.
FULL TEXT OF THE JUDGMENT/ORDER OF GAUHATI HIGH COURT
Heard Dr. A. K. Saraf, learned Senior Counsel assisted by Mr. P. Baruah, learned counsel for the petitioner and Mr. S.N. Sarma, learned Senior Counsel assisted by Mr. K. Kalita, learned counsel for both the respondents.
2. In this writ petition under Article 226 of the Constitution of India, the petitioner has assailed an order dated 09.11.2021 passed by the respondent no. 2. The operative part of the impugned order 09.11.2021 reads as under:
“AND NOW THEREFORE, the undersigned in terms of Section 3[1] of the Integrity Pact hereby holds M/s. Drillmec guilty for breach of Section 2[4] of the Integrity Pact and as such, debarring them from entering into any contract with Oil India Limited and also carrying out any business with Oil India Limited, for a period of 3 [three] years effective from the date of issue of this order, i.e. w.e.f. 09.11.2021. However, procurement of Proprietary Items, Proprietary Spares, Proprietary Services will remain outside the purview of this Order and procurement of such items will be carried out when requirement arises.”
3. The petitioner emerged as the successful bidder in a tender process initiated by the Tender Notice dated 21.11.2013. The petitioner was awarded the contract work by a Purchase Order dated 05.09.2015 and admittedly, the last payment in relation to the contract work was received on 29.05.2018, meaning thereby, a period of 12 months expired on 27.05.2019. The show cause notice which preceded the impugned order dated 09.11.2021 was issued to the petitioner on 24.03.2021.
4. It is the contention of the petitioner that if Section 2[1]4 and Section 9 of the Integrity Pact are read conjointly, the period of one year has since long expired. The respondent authorities in the OIL could not have taken resort to Article 20[1] of the Constitution of India and Section 6 of the General Clauses Act, 1897 to revive the period of limitation as the statutory provisions contained therein cannot be applied to the terms and conditions of the contract executed between the respondent OIL and the petitioner on 05.09.2015.
4.1. Dr. Saraf has further contended that the petitioner in its reply to the show cause notice has clearly averred that the petitioner did not make any payments to any of its sister concerns and the payments made to the entities, referred in the impugned order, neither falls in the category of sister concerns nor falls in the category of agents, brokers or intermediaries.
5. Mr. Sarma, learned Senior Counsel for the respondents has submitted that the petitioner had preferred an appeal against the impugned order dated 09.11.2021 in the meantime and an order has been passed by the appellate authority in the said appeal on 21.02.2022. By the appellate order, the appellate authority has reduced the duration of debarment of the petitioner from 3 [three] years to 1 [one] year from the date of the impugned order dated 09.11.2021 keeping in view Rule 151[iii] of the General Financial Rules, 2017. In such view of the matter, the petitioner may not have any grievance with regard to the order of debarment. It is submitted by him that it is open for the respondent authorities to take recourse to Article 20 of the Constitution of India and Section 6 of the General Clauses Act, 1897.
6. The Integrity Pact executed between the respondent Oil India Limited and the petitioner on 06.05.2014, more particularly, Section 2[1][4] and Section 9 thereof, which read as under:
“Section 2 – Commitments of the Bidder/Contractor
[4] The Bidder/Contractor will, when presenting his bid, disclose any and all payments he has made is committed to or intends to make to agents, brokers or any other intermediaries in connection with the award of the contract.
Section 9 – Pact Duration
9. This pact begins when both parties have legally signed it. It expires for the Contractor 12 months after the last payment under the respective contract, and for all other Bidders 6 months after the contract has been awarded.
If any claim is made/lodged during this time, the same shall be binding and continue to be valid despite the lapse of this pact as specified above, unless it is discharged/determined by Chairperson of the Principal.”
7. The Integrity Pact was signed between the parties on 06.05.2014. Admittedly, the last payment in relation to the contract in question was made on 28.05.2018 and a period of 12 [twelve] months had expired on 27.05.2019. It further prima-facie transpires that no claim was made/lodged during the subsistence of the Integrity Pact as the show cause notice was issued to the petitioner only on 24.03.2021, that is, much after 27.05.2019.
8. Prima facie, the contract executed between the respondent OIL and the petitioner on 05.09.2015 was non-statutory in character. It, thus, appears that the provisions contained in Article 20 of the Constitution of India and Section 6 of the General Clauses Act, 1897 cannot be readily read into and applied to as the terms and conditions of a non-statutory contract, as had been done in the impugned order dated 09.11.2021.
9. Issue notice of motion, returnable in 3 [three] weeks.
10. As Mr. Kalita, learned counsel has appeared and accepted notices on behalf of both the respondents, no formal notices need to be issued to the said respondents. Mr. Baruah, learned counsel for the petitioner shall furnish requisite numbers of extra copies of the writ petition along with the annexures, to Mr. Kalita within 3 [three] working days.
11. Having regard to the projections made on behalf of the petitioner and considering the provisions of Section 2[1]4 and Section 9 of the Integrity Pact, it is provided that till the returnable date, the operation of the impugned order dated 09.11.2021 is kept in abeyance.
