Rajasthan High Court Urges Swift Decision on Stay Vacation Pleas in Public Projects, Modifies Interim Order Harming Power Supply

Jaipur: The Rajasthan High Court, helmed by Chief Justice Manindra MohanShrivastava , has underscored the necessity for expeditious disposal of applications seeking to vacate ex-parte interim orders, particularly when such orders impede crucial public projects and services. Partly allowing an appeal by an electricity supply company (appellant, RVVNL), the Court modified an interim stay that had halted the procurement of essential conveyor belts for thermal power plants for nearly six months, directing the original writ petition to be decided within one month.

Case Background: A Stay Order Stalls Essential Procurement

The dispute originated from a Notice Inviting Tender (NIT) dated December 7, 2023, for the supply of conveyor belts. The appellants (official respondents in the writ petition) issued a letter of intent on June 10, 2024, to Respondent No. 2 (the L-1 bidder, also referred to as Respondent No. 3/NRC Industries in proceedings). This award was challenged by Respondent No. 1 (the writ petitioner and second-lowest bidder).

On June 25, 2024, a learned Vacation Judge passed an ex-parte interim order, restraining the appellants from issuing the work order. The appellants filed an application to vacate this stay on July 10, 2024. Despite repeated requests and a previous High Court directive on August 6, 2024, for an early hearing (preferably within a week), the application remained pending. This led the appellants to seek restoration of their appeal, which was allowed on September 21, 2024, bringing the matter before the Chief Justice's bench for a decision on merits.

Arguments Before the Court

Appellants' Stance (Electricity Company & L-1 Bidder): The primary argument from the appellants, supported by the L-1 bidder, was the critical public interest involved. They contended: * Conveyor belts are "extremely essential for transportation of coal to boiler in the thermal plants," and failure to procure them timely "would lead to serious complexities resulting in stoppage of thermal power production and obstruction in supply of electricity in the State." * The ex-parte interim order was passed without hearing them and without considering material facts. * The decision to award the contract to the L-1 bidder was based on "fiscal prudence" and their satisfactory performance, even supplying NTPC during an alleged debarment period. * Citing the Supreme Court in N.G. Projects Ltd. vs. Vinod Kumar Jain & Ors. [2022(6) SCC 127] , they argued that injunctions in public projects should not be lightly granted and that judicial review in tender matters is limited. * The prolonged stay, despite their application for vacation, was causing significant harm.

Respondent No. 1's (Writ Petitioner) Objections: The writ petitioner raised several objections: * The appeal was not maintainable, arguing that the appellants should have pressed their vacation application before the Single Judge and that Rule 134 of the Rajasthan High Court Rules, 1952, didn't permit an appeal against such an interim order. * On merits, they alleged the L-1 bidder was ineligible due to a debarment by NTPC from August 10, 2020, to August 9, 2023, making the award arbitrary and against public interest. * They cited precedents like Ramana Dayaram Shetty and Michigan Rubber (India) Ltd. to support their claims of arbitrariness in the tender award.

High Court's Scrutiny and Reasoning

The Division Bench, led by Chief Justice Shrivastava , first dismissed the preliminary objections regarding the maintainability of the appeal. The Court clarified that its earlier order restoring the appeal was final and could not be collaterally challenged, and that Rule 134 does permit appeals against interim orders, albeit with a limited scope of interference.

The Court expressed its disapproval of the manner in which the ex-parte interim order was handled:

"Once there is an ex-parte interim order passed, as soon as the application for vacating stay is filed, the application is required to be decided one way or the other expeditiously and it cannot be allowed to remain pending for a long time... in such matters, ordinarily ex-parte interim order ought not to have been granted and even it was granted, the application for vacating stay was required to be considered expeditiously or the writ petition itself ought to have been decided finally."

The Court highlighted the severe consequences of the delay:

"Continuing interim order without hearing application for vacating stay and keeping the matter pending, virtually amounts to allowing the petition. Over and above the rights of the parties, delay in procurement of conveyor belt by six months has seriously and adversely affected electricity production."

Referring to the Supreme Court's observations in N.G. Projects Limited (supra) concerning infrastructure projects, the judgment noted:

"Since the construction of road is an infrastructure project and keeping in view the intent of the legislature that infrastructure projects should not be stayed, the High Court would have been well advised to hold its hand to stay the construction of the infrastructure project." And further: "A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good."

While refraining from a detailed examination of the writ petition's merits, which is pending before the Single Judge, the Court acknowledged the appellants' submission that the eligibility of the L-1 bidder was considered by experts before awarding the contract.

Final Decision and Directives

The High Court partly allowed the appeal with the following directions:

1. The writ petition itself is to be finally decided by the learned Single Judge within one month .

2. The interim order dated June 25, 2024, shall continue for a further period of one month or until the decision in the writ petition, whichever is earlier, and thereafter it shall lose its efficacy .

3. No adjournment shall be granted to any of the parties during the hearing of the writ petition.

4. This order is to be brought to the notice of the learned Single Bench within three days.

This judgment emphasizes the judiciary's role in balancing individual rights with larger public interest, especially in cases involving essential services and infrastructure development, and signals a low tolerance for procedural delays that hamstring public projects.