Per : S.N. Jha, Chief Justice

The dispute in this letters patent appeal arising from a writ petition relates to the Canal Power House, Jammu. The Power House was handed over to the respondent. By the order impugned, the State Government decided to take over it. The respondents challenged the order by a writ petition. By the judgement and order under appeal the impugned order was quashed with a direction to the appellant to give effect to the earlier order. The State of Jammu and Kashmir and others have come in appeal.

2. The case of the respondent shortly stated, is that pursuant to a policy decision of the State Government regarding setting up of small power project in Jammu and Kashmir through private entrepreneurship, on 4-7-2001, they came forward with a proposal a revive and modernize Canal Power House, Jammu, which was lying defunct for more than two decades. Earlier, outside agencies had not shown any interest in making investments in the State, and in the circumstances the Chief Minister had approached the Chamber of Commerce to motivate local private entrepreneurs. On 29-8-2001 the Managing Director, J&K State Power Development Corporation Limited asked the respondents to submit a Detailed Project Report (DPR). On 18-9-2001 the respondents submitted the DPR on 18-09-2001, the Report was sent to the Central Electricity Authority for scrutiny. On receipt of comments from the Central Electricity Authority the respondents were asked to revise the Project report vide letters dated 17-11-2001 of the Power Development Corporation. A revised project report in conformity with the advice of the Central Electricity Authority/Power Development Corporation was submitted on 21-11-2001. No further clarification was asked for nor the respondents were asked to make any modification in the project report. On or about 29-1-2002 the Chief Minister approved the proposal for handing over the Power House to the respondents which was communicated by the General Administration Department vide letter dated 29-1-2002. In the light of the said decision, on 30-1-2002, Government Order no. 34-PDD of 2002 was issued direction handing over of possession of the Power House to the respondents. The terms and conditions for transfer of assets and liabilities were to be finalized by a Committee. The constitution of the Committee consisting of the Chief Secretary, Financial Commissioner (P&D), Financial Commissioner (Finance), Secretary, Power Development Department and Managing Director, Power Development Corporation was separately communicated by Government Order no. 35-PDD of 2002 on the same day. On 31-1-2002 the Power House except rooms/portions which were under the occupation of the Commercial Division and Workshop Division of the Corporation was handed over to the respondents:

3. Meanwhile, on 25-2-2002 the said Committee among other things decided to hand over five kanals of land pertaining to the Power House to the respondents for a period of forty years, extendable thereafter. As regards the machinery/equipments the Committee decided to get their book value evaluated and subject to negotiations with the respondents, transfer them on outright sale or lease basis. The committee further decided that the respondents would supply power to the Power Development Department at the rate of Rs.3/- per unit, -- to start with, subject to review and award of the State Electricity Regulatory Commission. The respondents, further, were to enter into Power Purchase Agreement, to be signed on behalf of the Government by Development Commissioner (Power).

4. The further case of the respondents is that for completing the formalities regarding execution of Power Purchase Agreement, the Special Secretary, Power Development Department vide his letter dated 15-3-2002 asked the Development Commissioner (Power) to take steps for preparing the draft of the Agreement and its execution. At this juncture, the general elections were declared and things came to a halt. The Power De

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