Gauhati HC: IOCL to verify and revoke terminations of bulk LPG work orders where RC was uploaded as its 15.01.2026 note allowed; rest stand

Court: Gauhati High Court
Date of judgment: 5 October 2026
Case: WP(C)/2749/2026
Parties: RAMKRISHNA SUTRADHAR Vs THE UNION OF INDIA
Bench: HONOURABLE MR. JUSTICE KAUSHIK GOSWAMI
Outcome: Partly allowed

Summary

Justice Kaushik Goswami of the Gauhati High Court partly allowed seven writ petitions under Article 226 challenging the termination orders of 11.05.2026 by which work orders for transportation of bulk LPG in Assam and Meghalaya were terminated by Indian Oil Corporation Limited (IOCL). The Court held that termination was unsustainable for bidders who had uploaded the updated Registration Certificate (RC) of their Agreement to Sale (ATS) tank trucks, with the PESO amendment application or an expected completion date, by 21:00 hours on 15.01.2026, because the Corporation itself had carved out that relaxation in its final reminder e-mail of 15.01.2026 and the termination orders did not consider it. Bidders who did not upload the updated RC by that deadline got no relief.

The petitions are WP(C) Nos. 2747/2026 (Gaman Sarkar), 2749/2026 (Ramkrishna Sutradhar), 2750/2026 (Balo Ram Kaibarta), 2751/2026 (M/s Pallab Saikia), 2753/2026 (Laxmi Transport), 2754/2026 (Juri Thakuria) and 2755/2026 (Suresh Rabha). All arise from NIT No. LPG/BULK/TT/IOC/AS/2025-30 dated 01.03.2025. Corrigendum No. 3 dated 04.04.2025 let a bidder offer tank trucks still running under the existing contract through an ATS, but required the RC transfer and amended PESO licence within four months of the Letter of Acceptance (LoA), failing which the trucks could be terminated, and said the timeline would not be extended under any circumstances.

The petitioners were issued LoAs on 16.09.2025, so the period ended on 15.01.2026. Work orders followed and they began operating. Show-cause notices were issued on 05.03.2026 and the vehicles were suspended. After WP(C) No. 1526/2026 was disposed of on 27.04.2026 with a direction to decide their replies, IOCL terminated the work orders on 11.05.2026.

The question before the court

Whether termination of work orders for failure to submit the RC and amended PESO licence within four months of the LoA was valid.
Whether IOCL could ignore the note to its final reminder e-mail of 15.01.2026 while terminating.
Whether extensions given to the earlier transporters under the old contract bore on the petitioners' deadline.
Whether State action even in the contractual sphere is subject to Article 14.

What each side argued

For the petitioners: the show-cause notices were belated, and the RCs and amended PESO licences were submitted after 15.01.2026 but before 31.01.2026, were accepted and the petitioners were allowed to continue.
For the petitioners: two extensions to the existing transporters, the last up to 31.12.2025, cut the effective time to about fifteen days, and the orders themselves admit practical difficulty.
For the petitioners: the NIT did not require strict submission within four months, as IOCL's e-mail of 15.01.2026 showed, and termination entails civil consequences, so the authorities had to consider all relevant facts, as the State must act fairly even in contractual matters (MP Power Management relied on).
For IOCL: the petitioners failed to upload the RCs and PESO licences despite reminders, the Corrigendum is a mandatory contract term that the Court cannot relax, and the earlier contract was separate, its extension being with the earlier contractor's consent.
For IOCL: the LoAs were conditional on compliance with the NIT read with the Corrigendum, and delay in issuing show-cause notices was no waiver.

The court's decision

The Court framed the short question as the legality of the termination orders, whose primary ground was breach of the time limit in Corrigendum No. 3. The four months from the LoAs of 16.09.2025 expired on 15.01.2026. The Bench noted the Corrigendum's ATS mechanism and the reminders of 08.12.2025, 11.12.2025 and 07.01.2026.

The Court found that the final reminder of 15.01.2026 did not extend the deadline beyond 21:00 hours that day, but a note to it allowed a limited relaxation. Where the RC was already transferred and the PESO amendment application was filed but the licence awaited, the bidder could upload the updated RC with a copy of the application. Where no PESO application had been made, the bidder could upload the RC and state the expected completion date in the remarks column. The Bench held that the note must be read with the Corrigendum, and that IOCL could not approbate and reprobate. Neither the show-cause notices nor the termination orders dealt with it. For petitioners who had met its conditions, the orders showed non-application of mind and were arbitrary and unfair.

It was submitted at the bar that the petitioners in WP(C) Nos. 2749, 2751 and 2753 of 2026 uploaded their RCs with the PESO applications in time. In WP(C) No. 2755/2026, one of two ATS vehicles was in time, and the other's RC came four to five days late. In WP(C) Nos. 2750 and 2754 of 2026 the RCs came one to three days late. The judgment does not separately mention WP(C) No. 2747/2026. All petitioners eventually submitted the updated RCs and amended PESO licences.

For petitioners who did not upload the updated RC by 15.01.2026, the essential condition for the relaxation was missing. The Court said it cannot rewrite tender terms, that interference is warranted only for mala fides, favouritism or arbitrariness or irrationality of a degree no reasonable authority would reach, and that there was no such material for them. Later completion of formalities did not make their termination perverse. The argument on extensions to the earlier transporters failed: those were given with their consent, the LoAs were independent and conditional on the NIT and Corrigendum, and the NIT contemplated no provisional extensions.

The respondents were directed to verify whether each petitioner uploaded the RC, with the amended PESO licence or the stipulated PESO completion time as per the note, by 21:00 hours on 15.01.2026. Where so, the terminations of those work orders are to be revoked. Terminations for the rest continue. The exercise must be completed within one month of receipt of a certified copy of the order, and the petitions stand partly allowed and disposed of.

Precedents referred to

Kumari Shrilekha Vidyarthi v. State of UP, (1991) 1 SCC 212
MP Power Management Company Limited v. Sky Power Southeast Solar India Private Limited, (2023) 2 SCC 703
Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489
Central Coal Field Ltd v. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622
Meerut Development Authority v. Pawan Kumar Agarwal, (2009) 6 SCC 171
N. G. Projects Limited v. Vinod Kumar Jain, (2022) 6 SCC 127
Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited, (2016) 16 SCC 818
Dresser Rand S.A. v. Bindal Agro Chem Limited, (2006) 1 SCC 751

Provisions referred to

Article 226 of the Constitution of India
Article 14 of the Constitution of India

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