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2004 Supreme(J&K) 36
IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
S.K. Gupta, J.
Trehan Industries Pvt. Ltd. - Appellant
Versus
State Of J&K & Ors. - Respondent
OWP No. 467/2003
Decided On : 26 February, 2004
Advocate For Appellant: M.L. Verma
Advocate For Appellant: D.C. Raina
Advocate For Appellant: Sunil Sharma
Advocate For Appellant: Vikram Singh
Advocate For Respondent: A.H. Naik
Advocate For Respondent: Shaishta Hakim
Headnote:
The court held that the government's decision to take over a canal power house from a private company was arbitrary and unreasonable, and violated the principles of natural justice. The court found that the government had previously approved the company's proposal to renovate and modernize the power house, and that the company had spent a significant amount of money on the project. The court also found that the government had not given the company a proper opportunity to be heard before making its decision.
Fact of the Case:
The petitioners, M/s Trehan Industries Pvt. Ltd., through its Managing Director, Ravish Trehan, claim to have come forward with a proposal for setting up of a power project as an Independent Power Producer (IPP). Managing Director, J&K State Power Development Corporation Limited (J&KSPDC) vide its communication dated 29-8-2001 advised the petitioners to prepare a Detailed Project Report (DPR) of the Canal Power House, Jammu on the basis of a residual life and I.F. Studies to be got conducted through any of the consultants enlisted by Power Finance Corporation of India. The petitioners were further advised by respondent-3 to submit the Detailed Project Report (hereinafter referred to as DPR) within a period of six months, failing which State Government would be at liberty to make alternative arrangements. In response to the advice of the respondent-3, a DPR was submitted by the petitioners on 18th September, 2001 addressed to respondent-3. It is further averred in the petition that the aforesaid communication along with Detailed Project Report indicated that the said Report has been prepared in association with T.A. Deo Dass, Ex-Member, Central Electricity Authority for renovating, modernizing and upgrading the Canal Power House, Jammu. It is further stated that the report submitted by the petitioners after having been thoroughly evaluated, was advised to be revised on the lines suggested and observations and the comments made by the Central Electricity Authority. It is further stated that respondent-3 advised and requested the petitioners vide its letter No. MD/PDC/CJ/1108-9 dated 17-11-2001 to revise the DPR in the light of the observations made by the Central Electricity Authority and keeping in view the following:
Finding of the Court:
The court found that the government's decision to take over the canal power house was arbitrary and unreasonable, and violated the principles of natural justice. The court found that the government had previously approved the company's proposal to renovate and modernize the power house, and that the company had spent a significant amount of money on the project. The court also found that the government had not given the company a proper opportunity to be heard before making its decision.
Issues: Whether the government's decision to take over the canal power house was arbitrary and unreasonable, and violated the principles of natural justice.
Ratio Decidendi: The court held that the government's decision to take over the canal power house was arbitrary and unreasonable, and violated the principles of natural justice. The court found that the government had previously approved the company's proposal to renovate and modernize the power house, and that the company had spent a significant amount of money on the project. The court also found that the government had not given the company a proper opportunity to be heard before making its decision.
Final Decision: The court allowed the writ petition and quashed the impugned Cabinet Decision No. 90/6 dated 19-05-2003 followed by order dated 21-05-2003 and all other consequential orders based upon the aforesaid decision. Respondents are further commanded and directed to give effect to orders No. 34-PDD of 2002 dated 30-1-2002 and No. 35-PDD of 2002 dated 30-1-2002 and consequent decision of the designated Committee on negotiated terms and conditions in this behalf, based upon the aforesaid orders, reflected in communication dated 15-03-2002 addressed to the Development Commissioner, Power, J&K, by the Special Secretary to Government, Power Development Department, pertaining to taking steps for the execution and signing of the P.P.A. with the petitioners on the terms and conditions finalized and settled in this behalf by the High Power Committee.
(a) No expenditure becomes infructuous.
(b) The important installations and offices etc. and their infrastructure requirement may not be sparable by PDD.
(c) It is also required to be ensured that the R&M cost are economized for reducing the generation cost.
2. A Detailed Revised Project Report, in conformity with the advice of the J&K SPDC as approved by the Central Electricity Authority and technically cleared by the consultants, was submitted on November 21, 2001. It is further stated that the respondents thereafter did not ask for any clarifications or changes in the Revised Detailed Project Report submitted by the petitioners, which, it is stated, clearly amounted to the acceptance of the Project Report in its totality and entirety. That after the fulfillment of the necessary requirements and observance of requisite formalities, the Government finally cleared the Project on 29-1-2002 and conveyed the approval of the Honble Chief Minister to departmental proposal in anticipation of approval of the Cabinet. The Department was directed to issue necessary orders for the handing over of the assets of the Canal Power House to M/s Trehan Industries Corporation, petitioners, and be allowed to proceed with the Project, by the aforesaid Order of sanction for construction of Mini Hydro Electricity Project and modernization and renovation of the old d
