WP/39878/2026 of M/s. Sun Kouture LLP Vs Tamil Nadu Power distribution corporation Limited on 9 October 2026

ORDER

The petitioner being aggrieved by the impugned order of the third respondent cancelling the sub-vendor approval issued to the fourth respondent for procuring 33 kV polymer composite disc insulator from the petitioner and the decision not to issue RDSS works to the petitioner, is before this Court.

2. The facts are briefly set out herein below :

(a) The first respondent acting through the third respondent had awarded turnkey contract to the fourth respondent for supply and installation of materials towards the loss reduction works under the Revamped Distribution Sector Scheme (RDSS) for High Voltage Distribution System works in Gobi Electricity Distribution Circle, Erode District, vide Notification of Award dated 17.11.2023.

(b) In connection with this contract, the fourth respondent had approached the petitioner for supply of 33 kV 70 kN Ball and Socket type Polymer Composite Disc Insulators. The petitioner had accordingly furnished its Guaranteed Technical Particulars (GTP) appraising themselves of the same.

(c) The third respondent had considered the fourth respondent's application dated 22.08.2024 (which was also preceded by its letter's dated 25.07/2024, 13.08.2024, 16.08.2024) had granted sub-vendor approval to the petitioner on 16.09.2024 vide proceedings in D.No.099/2024. The approval was subject to the materials supplied conforming to the approved GTP and drawing.

(d) Pursuant to the approval, the petitioner's factory at Khurja, Uttar Pradesh was inspected on 09.07.2025. Thereafter, on 24.07.2025, despatch instructions were issued and materials were supplied to the warehouse on 31.07.2025. On 01.09.2025, the officials of the first respondent had inspected the materials and issued Material Receipt Certificate on the same date.

(e) The petitioner would submit that in total they had supplied 1,522 units of products to five Electricity Distribution Circles, namely, Kancheepuram (569 units); Villupuram (186 units), Karur (461 units), Thiruvallur (276 units) and Tirunelveli (30 units). In all, 1,216 units was supplied to date and the balance 306 units are pending supply to Thiruvallur and Tirunelveli EDCs. The substantial quantity was erected in the field without any complaint.

(f) Between 24.11.2025 and 03.12.2025, the Third Party Quality Monitoring Agency (TPQMA) appointed by REC Limited, had drawn the first sample of the product for testing at Robust Testing Solutions Pvt Ltd., a NABL-Accredited laboratory. After testing, the report recorded a non-conformity only with reference to the mechanical load parameters, namely, the tightness of the interface between the end- fittings and the insulator housing, and the specified minimum failing load test, breakage of the sample having been observed at 27.25 kN as against the requirement of no breakage upto 100% of the Specified Minimum Failing Load of 70kN.

(g) The petitioner would submit that it came to its knowledge through the fourth respondent that the second sample tested by the same laboratory on 18.03.2026 was not conforming to the requirements. The petitioner would allege that neither the detailed report of the second sample nor the parameters said to have been failed, were furnished to them. Thereafter, without issuing notice to the petitioner or calling for the explanation on the test results or without affording an opportunity of hearing to the petitioner or to the fourth respondent, or to have the samples re-tested or to be heard on the isolated mechanical load result against the backdrop of over a thousand units already supplied, erected and being commissioned without complaint, the third respondent had proceeded to pass the impugned order cancelling the petitioner's sub-vendor approval.

Aggrieved by the said rejection order, the petitioner is before this Court seeking to quash the same.

3.1 The counter affidavit has been filed by the third respondent, whose order is the subject matter of challenge in the present writ petition. The initial argument is that the writ petition is not maintainable as there is no privity of contract between the petitioner and the respondents 1 to 3. On merits, the third respondent would rely upon the sub-vendor approval letter issued to the fourth respondent dated 18.09.2024, wherein it has been clearly stipulated that the first respondent reserve its right to withdraw / cancel the approval at any time in case of violation in the technical specification, poor performance, adverse reports etc., without assigning reasons. 3.2 The third respondent would also rely upon Clause 10 (Concurrent Quality Monitoring by Nodal Agencies) of the Conditions of Contract and Contract Forms (Part-3), Scope of Works. In Clause 10, it has been stated that in addition to in-house quality checks and processes followed by the Employer, the Nodal Agency of RDSS (REC/PFC) shall also carry out concurrent inspection of works through TPQMA. It is pursuant to these provisions, the sample materials have been drawn and forwarded to M/s.Robust Testing

Solutions Pvt. Ltd., a NABL-Accredited Lab for testing. The first sample drawn discloses that the sample had failed the mechanical load test and this was officially communicated by REC Limited to the second respondent on 16.01.2026. The second sample which was drawn and sent for re-testing to National Test House (NR), Ghaziabad, also certify that the mechanical load tested was found unsatisfactory and the sample failed to meet the GDP requirement. Thereafter, REC Limited by its communication dated 01.04.2026 directed the first respondent to withdraw and reject the entire lot of 1,522 units, that are lying in the store, erected, in transit, or commissioned. It is based on this direction, the impugned order came to be passed. The respondent would also contend that the consequential order of debarment for five years vide Letter No.110/2026 dated 27.05.2026, is also issued by strictly following the terms of Conditions of Contract and Contract Forms.

3.3 The petitioner's plea regarding the violation of natural justice has been turned down by stating that there is no privity with the petitioner and it is only with the fourth respondent the contract had been entered into, and the fourth respondent had been kept appraised of every stage of testing. It is also alleged in the counter that the petitioner cannot seek a personal hearing. The respondents also raised a defence that as per the terms of the contract, parties have to settle their dispute through arbitration and therefore, on this ground also, the writ petition is not maintainable.

4. The learned counsel appearing for the petitioner would submit that the sub-vendor approval had been granted after the third respondent had inspected the petitioner's factory at Khurja, Uttar Pradesh on 09.07.2025. Thereafter, the despatch instructions were issued on 24.07.2025 and the materials were supplied on 31.07.2025. The samples have been drawn and negative reports have been submitted by two laboratories. The result of the testing has not been made available to the petitioner. Likewise, no show cause notice has been issued nor an explanation was called for from the petitioner, and also without affording an opportunity of hearing, the impugned order came to be passed and the petitioner has been banned for a period of five years. Therefore, the impugned order cannot be sustained.

5. The counsel for the respondents 1 to 3 on the other hand would submit that the writ petition is not maintainable inasmuch as there is no privity of contract between the petitioner and the respondents 1 to 3. The contract is only between the fourth respondent and the petitioner. Further, the impugned order has been passed by following the conditions stipulated in the terms of contract and therefore, the impugned order cannot be set aside.

6. Heard the learned counsel on either side and perused the materials available on record.

7. A perusal of the impugned orders of the third respondent dated in Lr.No.SE/GEDC/Gobi/AEE/RAPDRP/F.Sub Vendor/D.No.085/2026 dated 27.04.2026 and the subsequent Lr.No.SE/GEDC/Gobi/AEE/RAPDRP/F.Sub Vendor/D.No.110/2026 dated 27.05.2026, stating that the cancellation was for a period of five years, is one passed without giving an opportunity to the aggrieved person to submit their explanation, hear them and thereafter, pass orders. The impugned order has been addressed to the fourth respondent. Even the fourth respondent has not been heard nor their objections were called for.

8. In a similar case in W.P.No.36087 of 2026, the Co-ordinate Bench by its order dated 09.09.2026, has observed as follows with reference to privity of contract : "8. Even though normally a sub vendor has no privity of contract and therefore need not be heard, as per the tender conditions (specifically condition No.6.6.13), it can be seen that if the product is disapproved, the debarment will also result in the petitioner being unable to participate even with reference to other agencies in respect of the product for a period of 5 years. Therefore, when such an order visits the petitioner with penal consequences, it goes without saying that, dehors the contractual provisions, the petitioner shall also be given an opportunity. This is especially so when the petitioner was called upon to submit a revised GPT on 29.01.2026 and when the petitioner successfully submitted the same on 29.01.2026."

9. The facts of the case cited supra is also similar to the case on hand. Therefore, the impugned order is a clear violation of principles of natural justice. The cancellation being an excessive order, the aggrieved party ought to have been heard prior to the passing of the impugned order. Therefore, without going into the merits of the case, the impugned orders of the third respondent are set aside and the matter is remitted back to the third respondent for fresh consideration. The third respondent shall issue show cause notice to the petitioner herein as well as to the fourth respondent, give them a personal hearing and thereafter pass a speaking order, within a period of six weeks from the date of receipt of a copy of this order.

10. Accordingly, the writ petition stands allowed. No costs. Consequently, connected miscellaneous petitions are closed. 09-10-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No DS

To:

1. The Chairman and Managing Director Tamil Nadu Power Distribution Corporation Limited (TNPDCL) No. 144 Anna Salai, Chennai - 600 002.

2. The Chief Engineer, IT and RAPDRP Tamil Nadu Power Distribution Corporation Limited Chennai - 600 002.

3. The Superintending Engineer Gobi Electricity Distribution Circle Vettaikarankovil , Nagadevanpalayam (PO), Gobichettipalayam - 638 476.

P.T.ASHA J. DS WP No. 39878 of 2026 and WMP Nos. 44834 & 44837 of 2026 09-10-2026