Page No.# 1/5 GAHC010090742025 2025:GAU-AS:5349 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/2275/2025 M/S JOHN ENERGY LIMITED A COMAPNY INCORPORATED UNDER THE COMPANIES ACT, 1956 AND HAVING ITS REGISTERED OFFICE AT 220-G.I.D.C ESTATE- 1, MEHSANA- 384002 AND IS REP. BY ITS DULY AUTHORIZED REPRESTATIVE SHRI AJIT RAMESH SINGH, G.M- BUSINESS DEVELOPMENT, RESIDENT OF 101, SHAPATH-III, NEAR GNFC TOWER, S.G. HIGHWAY, AHMEDABAD, GUJARAT. VERSUS THE OIL INDIA LIMITED AND 2 ORS A COMPANY INCOPORATED UNDER THE COMPANIES ACT 1956, AND HAVING ITS REGISTERED OFFICE AT DULIAJAN, IN THE DIST. OF DIBRUGARH, ASSAM 786602, REP. BY THE RESIDENT CHIEF EXECUTIVE, OIL INDIA LTD, DULIAJAN, DIBRUGARGH, ASSAM. 2:EXECUTIVE DIRECTOR (C AND P) OIL INDIA LIMITED DULIAJAN DIBRUGARGH ASSAM. 3:CGM-CONTRACTS (HOD) CONTRACT DEPT. OIL INDIA LIMITED DULIAJAN DIBRUGARH ASSAM Advocate for the Petitioner : MR G N SAHEWALLA, MS T J SAHEWALLA,MS K BHATTACHARYYA,MS. S. TODI,MR M SAHEWALLA Advocate for the Respondent : SC, OIL, Page No.# 2/5 BEFORE HONOURABLE MR. JUSTICE MICHAEL ZOTHANKHUMA ORDER Date : 01-05-2025 1. Heard Mr. GN Sahewalla, learned senior counsel assisted by Mr. M Sahewalla, learned counsel for the petitioner. Also heard Mr. A. Sarma, learned Standing Counsel for the Oil India Limited (OIL) 2. The petitioner’s case is that the petitioner was awarded the contract of hiring of two numbers of 2000HP (minimum) drilling rig package (with top drive) for a period of 2 (two) years in Assam and Arunachal Pradesh. The mobilisation of one Rig being No. John#30 was completed on 08.07.2022. However, mobilisation of 2nd Rig being No. John#16 could not be completed on time. Further, when the site was handed over to the petitioner for mobilisation of John#16, the top drive of John#16 started to malfunction sometime in November, 2023, due to which the petitioner ordered for the supply of a new electrical top drive for John#16 on 11.12.2023 from China. Due to the delay in the arrival of the new electrical top drive for John#16, the respondents have issued a show-cause notice of suspension dated 24.04.2025, asking the petitioner to submit his reply to the same. Further, pending completion of the proceedings for putting the petitioner on the holiday list, the petitioner has been informed that he has been placed under suspension for a period of 3 (three) months, from the date of issue of the show-cause notice dated 24.04.2025. 3. The petitioner’s counsel submits that there is no termination of the contract between the petitioner and OIL in relation to John#16, while the Page No.# 3/5 contract work for the use of John#30 had been completed. 4. The petitioner’s counsel submits that unless and until there is a termination of the contract of the use of John#16, the petitioner cannot be given a show-cause notice for putting him on the holiday list and placing him under suspension. 5. The petitioner’s counsel submits that the petitioner has also been barred from participating in other contracts, besides his bid being rejected in other contracts/tender on the basis of the show-cause notice dated 24.04.2025, which is in violation of the laws of blacklisting. 6. The petitioner’s counsel submits that till a decision is taken by the respondents to put the petitioner on the holiday list/blacklisting pursuant the show-cause notice dated 24.04.2025, the effect of the suspension order, as provided in the show-cause notice dated 24.04.2025, would have to be set aside, as the same in effect puts the petitioner in the holiday list, prior to a decision being taken on the subject matter in issue in the show-cause notice dated 24.04.2025. 7. Mr. A. Sarma, learned Standing Counsel for the OIL submits that there has been a termination of the petitioner’s contract in relation to Rig John#16 as the petitioner has not been able to procure the top drive for John#16 within time, i.e. before 31.05.2024, inasmuch as, the e-mail dated 01.07.2024 providing that the top drive should be procured before 3:30 p.m. of 01.07.2024, has not been issued by the competent officer of the OIL. Mr. A. Sarma submits that as there was no infirmity with the issuance of the show-cause notice dated 24.04.2025, Page No.# 4/5 the issue raised by the petitioner in this case should not bar the OIL from taking a decision on the show-cause notice dated 24.04.2025 and the reply to be filed by the petitioner, which would be in terms of Clause 44.5 of the General Conditions of Contract (GCC). 8. I have heard the learned counsel for the parties. 9. The show-cause notice dated 24.04.2025 clearly shows that the matter pertains to the inability of the petitioner to procure the top drive for Rig John#16 within the time period provided by the OIL and as such, the show- cause notice has been issued due to termination of the petitioner’s contract and to put him on the holiday list in terms of Clause 44.5 of the GCC. Interestingly, the show-cause notice has placed the petitioner on suspension for a period of 3 (three) months from the date of issuance of the show-cause notice, which in effect bars the petitioner from participating in any other contract under the OIL. This Court is of the view that the placing of the petitioner under suspension in terms of the show-cause notice dated 24.04.2025, amounts to basically giving a decision on the issue to be decided by the OIL, prior to a decision being actually made as to whether the petitioner should be put on the holiday list. The same, in the view of this Court, is arbitrary and unreasonable. 10. In view of the reasons stated above, this Court is of the view that though there is no infirmity with the issuance of the show-cause notice dated 24.04.2025, as the issue raised therein would be decided on the basis of the reply made by the petitioner, the suspension of the petitioner prior to the contents of the show-cause notice being decided, is not sustainable and is to be set aside. Accordingly, though the show-cause notice dated 24.04.2025 is not Page No.# 5/5 being interfered with, the portion where it has suspended the petitioner is interfered with. The suspension of the petitioner in terms of the show-cause notice is accordingly set aside. The interfered portion of the show-cause notice dated 24.04.2025 states as follows:- “Further, pending completion of this proceedings, you are hereby placed on suspension for a period of 03 months from the date of issuance of this Show Cause Notice during which you shall not be eligible to carry out any business with the Company and/or participate in any tender.” 11. Consequently, any action taken by the respondents, pursuant to the suspension of the petitioner for a period of three months, as provided in the show-cause notice cum notice for suspension dated 24.04.2025, is hereby set aside. 12. It is also made clear that the observation made in paragraph-7 of the order dated 30.04.2025 passed by this Court, i.e., “A simple reading of the above prima facie shows that the OIL has not terminated the contract involving John#16” should not be considered to be the final observation of this Court. It is needless to add that the respondents can take a decision on the show-cause notice dated 24.04.2025, independent of the observation quoted above. 13. The writ petition is accordingly disposed of. JUDGE Comparing Assistant