GAUHATI HIGH COURT ISSUES ORDER ON SIMPLEX INFRASTRUCTURES V/S OIL INDIA LIMITED AND 2 ORS.

GUWAHATI, India, Sept. 12 -- Gauhati High Court issued the following order on Aug. 12:

1. Heard Mr. S. Choudhury, the learned Senior Counsel assisted by Mr. T. Bose, the learned counsel appearing on behalf of the petitioner. Mr. D. Saikia, the learned Senior Counsel assisted by Mr. P. Nayak, the learned counsel appears on behalf of the respondents.

2. The petitioner herein has approached this Court challenging the termination of the contract bearing No. 6119345/ CDG3526P24/DRLG/24 vide the termination notice dated 09.06.2025 as well as the subsequent communication dated 18.06.2025, whereby the petitioner has been asked to vacate the drilling site with immediate effect.

MATERIAL FACTS ON THE BASIS OF PLEADING

3. The case of the petitioner herein is that an E-Tender bearing No. CDG3526P24 dated 23.05.2023 was floated inviting competent and experienced contractors for Charter Hire of 5 (five) numbers of 2000 HP (minimum) drilling rigs package. The petitioner participated in the said tender process and a Letter of Award (for short, "the L.O.A.") dated 12.03.2024 was issued in favour of the petitioner for Charter Hire of 1 (one) number of 2000 HP (minimum) drilling rig package at a total estimated contract value of Rs. 222,52,44,000/- for a duration of 4 (four) years. The petitioner was also directed to furnish a performance security for an amount of Rs. 4,96,71,000/- in the form of Bank Guarantee. The petitioner accepted the L.O.A. and furnished the cash security for a sum of Rs. 4,96,71,000/-.

4. Clause 2.0 of the L.O.A. dated 12.03.2024, stipulated that the contract shall be effective from the date of issuance of the L.O.A. Clause 3.0 of the L.O.A. relates to mobilization. The said clause has relevance to the present proceedings and as such, the said clause is reproduced herein under.

"3.0 MOBILIZATION: Mobilization of the Rig should be completed within 120 days from the date of issue of Mobilization Notice. However, if the Rig is in operation with OIL, the rig shall be deployed within 60 (sixty) days from date of de-hiring from the ongoing contract or 120 days from the date of issue of Letter of Award (L.O.A.), whichever is later."

5. From a perusal of the above quoted clause, it would reveal that the mobilization of the rig should be completed within 120 days from the date of issue of Mobilization Notice. It was also mentioned that if the rig was in operation with Oil India Ltd. (OIL), the rig shall be deployed within 60 days from the date of de-hiring from the ongoing contract or 120 days from the date of issuance of the L.O.A., whichever is later.

6. It is an admitted case of both the parties that for 403 days from the date of issuance of the L.O.A., the petitioner did not mobilize the rig. On 05.05.2025, a final notice was issued by the respondent No. 2 stating inter alia that the mobilization against the contract have not yet been completed by the petitioner even after 403 days from the date of issuance of the mobilization notice i.e. a lapse of more than 280 days from the scheduled mobilization completion date i.e. 26.07.2024. It was further mentioned that if the petitioner would not mobilize the rig in question within 20.05.2025, the contract would automatically stand terminated w.e.f. 21.05.2025 without serving any further notice and other punitive actions as mentioned in Paragraph No. 6.0 of the notice dated 05.05.2025 would be taken against the petitioner.

*Rest of the document can be viewed at: (https://hcservices.ecourts.gov.in/ecourtindiaHC/cases/display_pdf.php?filename=A9S7c5LDIsB6RXaCf816x%2FlUbL0zKHfvx5iXe4XoqAKELOgrm5u4uaz6erWPKnf1&caseno=WP(C)/3645/2025&cCode=1&cino=GAHC010138262025&state_code=6&appFlag=)

Disclaimer: Curated by HT Syndication.