HC: No illegality in LPG transportation contract extension

CHENNAI: Holding that there was no illegality, perversity, arbitrariness or violation of equality in the decision to extend the contract for the LPG transportation for two more years, the Madras High Court dismissed the petition challenging the extension of the contract.

Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation in 2018 called for tenders for LPG transportation in the southern region. The five-year contract was extended by two years by the three oil companies for two reasons, firstly the issues faced by the transporters due to the COVID pandemic, the loan moratorium and increased operating cost and secondly,the inability to assess the requirement of tank trucks due to commissioning of pipelines.

Dismissing the writ petition filed by B Charumathy and J Gandhimathi, Justice M Dhandapani said that it is clear that the extension is not only by mutual consent. The court said the consent is left to the direction of the transport contractors, who were open to assessing their position before giving their consent and the oil companies have acted reasonably and no fault can be put on the stand taken by them. When the terms of the tender, particularly clause 1.9 provided for extension, which has been resorted to by the oil companies, the court said.

Meanwhile, senior counsel Vineet Subramanian representing the petitioners submitted that the extension will affect the petitioners, who are first-generation entrepreneurs and the tender conditions, which limit the usage of trucks belonging to them furthers the inequality beyond the initial period of tender.