Delhi HC Rejects ‘Speculative’ Plea Against IOCL | Says “No Cause Of Action, No Violation, Only Conjecture”
Isabella Mariam
The High Court of Delhi Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela dismissed a writ petition seeking to restrain a public entity from proceeding with contract execution at the cost and risk of the petitioner. The Court held that no foundational cause of action had arisen and that the petition was based on mere speculation. The Court concluded that the petitioner was not entitled to any relief under Article 226 of the Constitution of India and dismissed the writ petition along with pending applications without costs.
The matter arose from a contractual dispute between the petitioner, a construction company, and the respondent, a public sector corporation. The petitioner had earlier been awarded two work orders dated 04.03.2021 and 10.03.2021 for civil and structural works at a refinery expansion project.
These contracts were issued under previous Notices Inviting Tender (NITs) dated 02.07.2020 and 29.09.2020. Clause 4.7.4.0 of the previous NIT allowed the respondent to complete unfulfilled works through another contractor at the risk and cost of the petitioner. Clause 2.9.1.0 further provided that decisions of the respondent’s engineer-in-charge would be binding after granting an opportunity to be heard and recording reasons.
Following alleged non-performance by the petitioner and disputes between the parties, a new tender was issued on 12.06.2024. The fresh NIT contained Clause 26, which explicitly named the petitioner as being liable for the risk and cost of incomplete works and simultaneously barred it from participating in the tender.
The petitioner challenged this clause and initially sought its quashing. However, during the hearing, the petitioner gave up this challenge and pursued only two remaining prayers: a direction restraining the respondents from executing the works at its risk and cost, and a direction to act in accordance with the minutes of a meeting dated 18.12.2024, which the petitioner claimed reflected a settlement.
The petitioner argued that Clause 26 of the fresh NIT predetermined liability without following the procedure prescribed in the earlier contracts.
It cited Clause 2.9.1.0 and Clause 4.7.4.0 of the previous NITs, alleging that no show cause notice had been issued, no opportunity of hearing had been granted, and no decision had been recorded. According to the petitioner, these procedural safeguards were prerequisites to imposing any financial burden or consequence.
Additionally, the petitioner contended that the meeting dated 18.12.2024 constituted a binding mutual understanding, under which certain works were to be descoped without any risk or cost implications.
This was supported by letters and emails exchanged thereafter, including a communication from the respondent’s project manager dated 23.04.2025 confirming that descoping was unconditional and without financial implication.
The petitioner relied on Section 20 of the Specific Relief Act, 1963 to assert that a formal notice was required before attributing risk and cost liability.
It also relied on Supreme Court judgments in Adi Saiva Sivacharyagal Nala Sangam v. State of Tamil Nadu and State of Uttar Pradesh v. Sudhir Kumar Singh to argue that even an apprehension of prejudice in a public law context could be grounds for a writ petition.
In response, the respondent submitted that the petitioner had failed to fulfil its contractual obligations and that the meeting minutes of 18.12.2024 were explicitly non-binding.
The respondent issued a letter dated 13.02.2025 clarifying that the minutes were still under review and that the petitioner’s performance continued to hinder project progress.
It argued that no actual cause of action had arisen since no new contract had been awarded and no amount had yet been deducted. Clause 26 merely indicated the respondent’s intention, which remained subject to due procedure under Clause 4.7.4.0 of the earlier contract.
The respondent further submitted that the issues raised were factual and contractual in nature, not suitable for adjudication under Article 226.
It pointed out that the petitioner had already been denied injunctive relief by a coordinate Division Bench on 15.12.2022 due to the determinable nature of the contract and the prohibition under Section 20A of the Specific Relief Act from injuncting infrastructure projects.
The Court recorded that the petitioner had expressly withdrawn the challenge to Clause 26 of the fresh NIT and thus, the challenge to its legality did not survive. Nevertheless, the entire petition was predicated on the implications of that clause.
It was recorded that “the petitioner is not privy to the fresh NIT” and has no legal right to challenge its contents, particularly since “no contract as yet has been awarded pursuant to the fresh NIT”.
The Court examined Clause 4.7.4.0 of the previous NIT, which empowered the respondent to complete works through alternative agencies at the original contractor’s cost and risk. It stated: “For justifiable reasons envisaged in Clause 4.7.4.0, the Engineer-in-Charge was entitled to get the works completed and levy damages/charges for such works falling within the definition of risk and consequences.”
The Court noted that the action contemplated under this clause had not yet been initiated and observed: “We fail to appreciate as to how the present writ petition can be instituted and maintained on a mere apprehension.”
The Court held that “no cause of action forming the edifice of a grievance has at all arisen” and termed the litigation as “speculative”. It stated that any previous deduction made without notice could not invalidate Clause 4.7.4.0 or pre-empt its future invocation.
Regarding Section 20(2) of the Specific Relief Act, the Court stated: “We have no means to ascertain today as to whether a condition where respondent no.1/IOCL would need to issue such notice will or will not arise in future.”
The Court also examined the petitioner’s reliance on meeting minutes dated 18.12.2024 and related correspondences.
It noted that “there are hotly contested disputed questions of facts arising from terms and conditions and breaches thereof in contractual matters”.
It referred to communications dated 08.02.2025 and 23.04.2025 which stated that the de-scoping was without financial implication but were also conditional and subject to verification.
On the public law element, the Court rejected the application of Sudhir Kumar Singh and Adi Saiva Sivacharyagal Nala Sangam.
It stated that “no such violation of such nature has occurred yet” and “the reliance... is wholly fallacious and misplaced.”
The Court concluded that the petition lacked foundational facts and recorded: “It is not the apprehension but the speculation of such apprehension which seems to be substratum of the present writ petition.”
The Court recorded that there was no reason to invoke its powers of judicial review under Article 226 of the Constitution of India, noting that the petition was speculative and lacked any actionable cause.
Consequently, the Court dismissed the writ petition along with all pending applications, stating that the matter stood disposed of without any order as to costs.
Advocates Representing the Parties
For the Petitioners: Mr. Jayant Bhushan, Senior Advocate with Mr. Amit Pawan, Mr. Hassan Zubari Waris, Ms. Aastha Shrestha, and Ms. Shivangi, Advocates
For the Respondents: Mr. Rajeev Sharma, Senior Advocate with Ms. Reeta Mishra, Mr. Abhishek Birthray, Mr. Kartikeya Tripathi, Ms. Shreya Sharma, and Mr. Nishant Kandpal, Advocates
Case Title: Ram Kripal Singh Construction Pvt. Ltd. v. Indian Oil Corporation & Ors.
Neutral Citation: 2025: DHC:4191-DB
Case Number: W.P.(C) 6153/2025
Bench: Chief Justice Devendra Kumar Upadhyaya, Justice Tushar Rao Gedela
[Read/Download order]
