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| High Court reverses Azad’s Cabinet decision on Sawalakote power project | | |
EARLY TIMES REPORT
Jammu, Feb 1: Taking a poor view of the applicability of mind of the members of state cabinet in their meeting in November 2006, the Jammu and Kashmir High Court has quashed the government order terminating arrangement with three firms –jointly known as Sawalakote Consortium –engaged for construction of prestigious and ambitious 1200 MW Sawalakote hydro-electric power project on Chenab River in Kishtwar district.
In 62-page judgment, Justice JP Singh of J&K High Court Jammu Wing has felt that the decision of state cabinet headed by then Chief Minister Ghulam Nabi Azad was arbitrary in nature and apparently influenced by the opinion of a Cabinet Minister. The decision to review arrangement with Sawalakote consortium was initiated only after a Cabinet Minister expressed his opinion about the capability and reputation of the consortium. Interestingly, the same Cabinet Minister later put as a member of the Cabinet Sub Committee that order scrap of arrangement.
Justice J P Singh of Jammu and Kashmir High Court, Jammu wing today in a much publicized Sawalakote Hydro Power Project controversy, allowed the petition filed by M/S Sawalkote Prosjektutvikling as of Norway, M/s Hindustan Constructions Company Mumbai and M/s Ozaltin Construction Trade and Industry company Inc of Ankara Turkey and quashed the government order passed on November 21, 2006 whereby the arrangement with the said firm had been terminated with the cost Rs 15000.
According to the petition that the petitioners are members of a consortium (Sawalkote consortium) entrusted with the works of designing, Executing and Completing the 1200 MW Sawalkote Hydro Electric Project in Doda District of J&K State for a cost of Euro 763 Million (crores of rupees), which consortium has been duly approved by three successive cabinets of state of J&K First in April 19, 2001, Second December 21, 2005 and April 4, 2006 as well as approved by the Power Development Corporation. The petitioners are engineering procurement and Construction (EPC) contractors for the project which EPC contract has been entered into between the petitioners and Chief Engineer Power Development Corporation.
In the landmark judgment Justice JP Singh while quashing the government order observed that perusal of the record produced by the Advocate General to justify the state action in issuing the impugned order needs reference to the facts leading to the constitution of the cabinet sub-committee and the process undertaken by the committee in making its recommendations on the implementation of the Sawalkote Hydro Electric Project.
One of then Minister of the State government appears to have brought to the notice of then Chief Minister that there was a vide spread whispering campaign regarding the transparency of execution of Sawalakote Project which had been considered appropriate by him to examine the details of the contract and different opinions of legal experts. He is stated to have prepared a comprehensive report detailing all the facts after examining details of the contract, different opinions of legal experts, facts and circumstances in which the contract was purposed to be executed. The said minister is indicated to have firmly believed that the consortium with whom the contract was proposed to be executed had one of the members M/s SPAS which claims to be the successor of M/s NCC. According to the said minister there was however no document which would suggest regarding its technical capacity financial capacity, past experience and present engagements.
The eagerness with which the contract was purposed to be awarded had prepared to the minister actuated by considerations opposed to the public policy. According to the note of the minister were not placed before the cabinet when it had issued its order on December 19, 2005, concluding the request made to the Chief Minister a fresh look to the entire decision had been sought for, so that no contract was entered by the government which runs contrary to the public policy.
According to the instructions of the then Chief Minister the matter was examined by the Ministry of Power of state government which suggested legal opinion in matter before placing the matter with the cabinet, a cabinet sub-committee to go into all the aspects of the projects including the concerns of the minister. Cabinet Sub-Commitete was constituted on October 19, 2006 under the chairmanship of Mangat Ram Sharma then Minister of Health and Medical Education, Abdul Aziz Zargar then Minister for Agriculture, Hakim Mohd Yaseen then Minister for Transport, Qazi Mohd Afzal then Minister for Forest, Nawang Rigzin Jora Minister for Power and Taj Mohi-Ud-Din Minister of CAPD. The committee after holding two seating prepared its recommendation on November 15, 2006, the recommendations of the cabinet sub-committee were placed before the cabinet on the same day, as a non-agenda item on which cabinet decision No 259/15 dated November 15, 2006 was taken to supersede government order No 366-PDD of 2005 dated December 21, 2005 and implement the Sawalakote Hydro Electric Project through a process of competitive bidding as per guidelines of the Govt of India.
It is further mentioned in the judgment that from the facts as discerned from the record of the respondents, it is apparent that the minister on whose complaint, Chief Minister had taken cognizance to place the matter of implementation of Sawalakote Project and issues related there too, before the state cabinet was one of the member on the cabinet sub-committee who had to examine the issue complained by the Minister concerned. The question that falls for consideration is whether the proceedings held by the Cabinet Sub-Committee and the recommendations made by it to the state government are vitiated because of the presence of the complainant-Minister in the decision making forum.
To ensure fairness of its actions, the administration in a democratic set-up, too is enjoyed to follow the principle flowing from the above mentioned maxim in that such is even otherwise the requirement of the principles of natural justice that justice should not only be done but manifestly and undoubtly be seen to be done. It is indeed unthinkable that in a democracy government by the rule of law the executive government or any of its officers should possess arbitrary power over the interests of its subjects. Every action of executive government must therefore be informed with reasons and should be free from arbitrariness.
Justice J P Singh after hearing senior advocate A M Shingavi with advocates Ritu Bhalla, Pranav Kohli and Misha appeared for the petitioner whereas M/s M I Qadiri, D C Raina present and former Advocates General, Shaista Hakim Deputy AG, P N Raina and Reshihash Barva advocates appeared for the state and other respondents, observed that the presence of the complainant minister in the cabinet sub-committee may thus genuinely raise eye-brows regarding his unbiased approach in discharging the functions of minister on the cabinet sub-committee with independent, free and unbiased mind, regardless of the view which he had reflected in his complaint in respect of the consortium, its constitution and the implantation of the Sawalkote Project, in these circumstances a presumption, arises that not only would have the minister influenced the mind of other members of the committee what would have certainly done all, he could possibly so do, to project his view point when there was none in the committee to speak for and on behalf of the petitioners, whose agreement with the government for implementation of the Sawalakote Project was the subject matter of decision before the committee.
The record produced by the Advocate General bear testimony to the fact that while forming its opinion on the implementation of the project on the two aspects, the cabinet sub-committee does not appears to have correctly appreciated the power finance corporation’s communication of July 21, 2006 in terms the corporation had itself, advised the state government to take up the matter with the ministry of power to obtain clarification, which in view of the correspondence resting on the subject between the power finance corporation and the J&K State Corporation indicates that Sawalakote Project being a state owned project, and not an IPP, the Government of India’s guidelines were not required to be followed for award of EPC contract. The state respondents have admitted in their pleadings, that the Guidelines for implementation of Project were not attracted and in this view of the matter, an important aspects appears to have escaped notice of the Cabinet Sub-Committee which had made its recommendations without noticing that the power finance corporation was no longer of the view that the guidelines were necessarily required to be followed for implementation of the Sawalkote Project to enable it to reach financial closure and had rather, on the other hand suggested the State Corporation to approach the Union Ministry of Power, apprising it that there was no requirement of following the guidelines for competitive bidding in case of state owned projects like the Sawalkote Project.
Court further observed that the recommendations of the Cabinet Sub-Committee proceed on the premises that the power finance corporation had expressed reservations in financing the project for not following the guidelines of Govt of India in competitive bidding in implementation of the project which is however not true & correct construction of power finance corporation’s communication of July, 2006. This communication as its reading would so demonstrate had advised the state Power Development Corporation and even the Union Ministry of Power to issue clarification that competitive guidelines were not attracted to Sawalkote Project which was a state owned project and not an IPP to which the Guidelines would apply.
The State Govt, therefore, acted illegally in accepting the recommendations of Cabinet Sub-Committee which were based on the misconstruction of the communications issued by the Power Finance Corporation in respect of the implementation of the projects. While allowing the petition of the petitioners, Justice JP Singh observed that the state government is found to have acted against law in issuing the impugned government order, because it had issued the impugned order on the basis of the recommendation of the Cabinet Sub-Committee whose constitution suffered from the voice of unfairness because of the presence of minister who himself was the complainant in the case. With these observations allowed the petitioner and quashed the Govt order dated Nov, 21, 2006 with costs quantified at Rs 15000.
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