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Judgment
Nisar Ahmad Kakru, J.—Writ Petition on hand owes its origin to the policy evolved by the Government vide Govt. order No. 78-PDD of
2003 dated 08-04-2003, superseded by order No. 211-PDD of 2003 dated 09-10-2003, called ""the State Hydel Policy"" (Policy hereinafter),
with an objective to encourage generation of power through small hydro power sources of energy, aimed at promotion of all round development of
the region and in pursuance of the said policy, the Government invited bids for identified projects, from the Central Power Utilities, State
Governments, Government Entities and their Joint Ventures, besides, Independent Power Producers (for short IPPs). In response thereto, the
petitioner applied for three projects, namely Athwatoo (Bandipora), Tangmarg (Baramulla) and Mandi (Poonch) which came to be allotted to him
vide allotment Nos. CE/CPD/234-39 dated 02.05.2005, CE/CID/PDC/633-36 dated 20.06.2005 and CE/CID/238-41 dated 02.05.2005
respectively, requiring the parties to enter into the agreements i.e. Implementation agreement and Wheeling and Banking agreement, on mutually
agreed terms and conditions within two months to be reckoned from the date of issuance of allotment letters. Case set up by the petitioner is that
despite his representations and reminders, the respondents failed to execute the agreements, leaving no option for him but to invoke the extra
ordinary writ jurisdiction of this Court. Per contra, the respondents have attributed delayed execution of the agreements to the petitioner.
Significantly neither of the parties disputes obligation to execute the agreements which intention was expressed unambiguously on 26.03.2009 by
Learned Counsel for the parties during the course of final arguments. It was in that context that the Learned appearing Counsel for the parties were
asked to explore the possibility to come round by execution of agreements. Accordingly, the petitioner was directed to report before the
Respondent 3-Managing Director (MD hereinafter) on 30.03.2009 with a further direction to inform the Court about the outcome of the meeting
on the next date but instead of reporting before the MD, the petitioner through his Counsel laid a motion supported by documents to be read as
part of his pleadings, contending therein that the petitioners appearance before the MD would be of no relevance because he (MD) had already
proposed and recommended the amendments to the draft agreement. The averments made in the application were replied evasively, suggesting
neither admission nor denial of the documents, giving rise to a presumption of correctness thereto, for, law is settled that if denial of a fact or a
document is not specific but evasive, it amounts to admission of that fact or document as the case may be. The respondents having opted for an
evasive reply, the documents could be taken to have been admitted, requiring no further proof, yet with a view to do substantial justice between
the parties, further opportunity was granted to the respondents to answer the point of substance, viz. as to whether they admit or deny the
documents which was availed of and replies on affidavits were filed, authenticating the contents of the documents filed by the petitioner excepting
'annexure A'. In that view of the matter, I choose to adjudicate upon the controversy on the basis of those documents only which are admitted by
the respondents and to proceed in that direction, the objections filed by the respondents are summarized hereunder;
i) In absence of execution of the agreements, the petitioner was not supposed to commence the work on the projects.
ii) The petition raises disputed questions of fact therefore, in terms of Clause 18 of the policy, the petitioner was required to approach the
Government for settlement of the dispute.
iii) The delay in execution of agreements is caused by the petitioner and not by the respondents;
iv) Because of non execution of the Implementation agreement, wheeling and banking agreement could not be executed and signed.
Having taken note of the objections, I would like to scrutinize them in seriatim. Beginning with the first one that the petitioner could not have
commenced the work without execution of agreements, reference to condition (4) of the allotment letters becomes imperative which reads;
Notwithstanding execution of formal agreement on a subsequent date, the milestones mentioned in the bid document will be reckoned from the
date of issuance of this letter of allotment....
In addition to that, the respondents had reminded the petitioner about the import of the condition vide their communication bearing No.
CE/C1D/PDC/2185 dated 10.01.2006, relevant paragraph whereof reads:
...Delay in drawl/acceptance shall have no impact on the allotment of projects.
Gravamen of the condition extracted above is, that non execution of the agreements on a subsequent date would not furnish an escape route to the
petitioner in achievement of milestones mentioned in the bid document and same shall have to be reckoned from the date of issuance of the letter of
allotment. That being the mandate of the condition of the allotment letters, absence of a formal agreement by no stretch of imagination could work
as an impediment for execution of the project, obviously objection fails.
This takes me to the second objection traceable to Clause 18 of the policy, extracted hereunder:
POWER TO RESOLVE DIFFICULTIES:
18.1. In the event of a dispute, the interpretation of these guidelines made by the Government of Jammu & Kashmir shall be final. In all such
matters, to the extent practicable, an opportunity shall be given to the affected stakeholders to be heard before the Government takes any decision.
Relying on the Clause, Mr. Beg has questioned the maintainability of the writ petition on the ground that non execution of the agreements has given
rise to a disputed question of fact which could be resolved by arbitration by the Government. The argument is raised for the sake of argument and
is liable to be summarily rejected for the simple reason that the parties are not at variance in respect of requirement of execution of the agreements.
Going by Clause 18 and its title, it is clear that in case difficulties arise to understand the guidelines, interpretation shall be by the Government but
fact remains that both the parties have no difficulty in understanding the ambit of the guidelines necessitating execution of the agreements to which
requirement and understanding, none of them is averse, therefore, no interpretation of the guidelines in terms of Clause 18 is called for. Apparently,
the objection is based on misunderstanding of the Clause and same being bereft of logic, fails.
Dealing with the delayed execution of the agreements attributed to the petitioner by the respondents, reference to the admitted documents
forming part of the pleadings becomes obligatory, perusal whereof reveals that failure of the respondents to execute the agreements within the
stipulated period had constrained the petitioner to demand in writing execution of the agreements vide his communications (annexure E & F to the
writ petition) which were replied by them vide their communication bearing No. CE/CID/PDC/2185 dated 10-01-2006 and the relevant
paragraph reads:
It is to inform that the agreements are under process of scrutinizing with the corporate office and are to be drawn shortly...
The agreements were not executed. Demands were reiterated by the petitioner, resultantly a meeting was taken by authorities at the helm on 14-
05-2006 in the Corporate office of the Jammu & Kashmir State Power Development Corporation (for brevity J & K SPDC) under the
Chairmanship of the MD, which ended with a resolution, relevant para whereof is extracted hereunder for facility of ready reference:
3) It was informed that these agreements have to be examined at various levels at Secretariat and may take sometime...
Minutes of the meeting reproduced make it clear that the respondents were contemplating to examine the agreements at various levels including the
Secretariat level, accordingly the IPPs were directed to wait for some time but contemplated process did not end up and situation having remained
the same, further demands were made by the petitioner through communications addressed to the Chief Engineer who took up the matter with the
higher authorities vide his communication No. CE/CID/PDC/CJ/27 dated 28-11-2006, relevant paragraph whereof reads:
The agency has already started implementation in terms of the allotment order wherein the date of allotment has been reckoned as the date of start
of project and irrespective of formal drawl of these agreements for implementation, the agency is executing the same as per the said terms and
conditions but he is facing problems in absence of these documents with the financial institutions.
It is once again requested that formal agreements may kindly be got finalized by the Administrative Department...
The petitioner's demand was ultimately responded to vide communication of the MD bearing No. PDC/PF/CJ/1846-47 dated 28.01.2009. What
happened during the interregnum, need not detain me because the said communication gives the details of the deliberations those have taken place
till issuance of the communication. Interestingly, there is no mention, not even worth the name which would attribute delay in execution of the
agreements to the petitioner and could not be, because fact remains that final amendments to the implementation agreement have been
recommended by the MD on 28.01.2009 (annexure 'B' page 13 to CMP 513/09). Thus on the face of the pleadings besides, the documents
drafted, authenticated and admitted by the respondents, attempt on their part to attribute the delayed execution of the implementation to the
petitioner fails.
Now fourth and the last objection, that in absence of the Implementation agreement, the Wheeling and Banking Agreement could not be
executed and signed. To appreciate the contention reference to the policy of the Government, conferring and creating rights and duties
respectively, on the parties becomes necessary and the relevant Clause being 7.4 of para 7 is extracted:
The J & K PDD will prepare a standard ""wheeling and banking agreement draft"" consistent with this policy statement. This will be made available
prior to any bidding for projects.
A plain reading of the Clause would show that it is obligatory upon the respondents to prepare a standard Wheeling and Banking Agreement draft
before going for bidding of the projects. Mr. Beg could not point out any Clause of the policy which would provide for execution of agreements at
different stages or one after another. His failure to support the objection by policy or documentary proof, suggests it to be an objection for the
sake of an objection, having no foundation. More so, the respondents have on their own interpreted the policy to the effect that the delay in
drawl/acceptance shall have no impact on the allotment of projects and accordingly notified the petitioner (for details see para 3 hereinabove), fall
out being no rigid adherence to the execution of the agreements in a particular sequence. Responding to the objection. Mr. Shah contended that
the objection is belied by documentary evidence. To bring home the point reference is made by him to the MD's letter No. PDC/PF/CJ/1846-47
dated 28.01.2009 (annexure B) wherein the J&KSPDC has sought indulgence of the Commissioner Secretary, to direct the Development
Commissioner (Power) to execute the Wheeling and Banking agreement in spite of non-execution of the Implementation. agreement. He has also
placed reliance on the communication of the Development Commissioner (Power) bearing No. DC/PD/PO-1/144/2146-50 dated 06.04.2009.
Before adverting to it, a few proceedings recorded in the petition on hand and relevant to the objection are extracted;
Mr. Shah, Learned Senior Advocate submits that the Development Commissioner (Power) has forwarded the Wheeling and Banking Agreement
to the Respondent 1-Commissioner/Secretary to the Government, Jammu & Kashmir Power Development Department, vide his No. DC/PD/PO-
1/144/2146-50 dated 06-04-2009, for its vetting by the Law Department which refutes the objection raised by Mr. Beg, that Wheeling and
Banking Agreement cannot be brought into being unless Implementation Agreement is executed. Communication is taken on record with liberty to
Mr. Beg to rebut it, if so advised by the respondents. He shall obtain instructions in view of the contents of the communication. Be listed on
11.5.2009.
Order dated 11.05.2009
Nothing, in rebuttal to the communication of the Development Commissioner (Power) bearing No. DC/PD/PO-1/144/2146-50 dated 06-04-
2009, is brought on record. In response to the direction requiring Mr. Beigh to seek instructions in respect of the communication, he submits that
he is under instructions to have the matter decided on its merits.
Heard Learned Counsel for the parties. Judgment reserved.
Contention of Mr. Shah is that the communication of the Development Commissioner (Power) bearing No. DC/PD/PO-1/144/2146-50 dated
06.04.2009 unveils the fact, that the Wheeling and Banking Agreement after its completion by the Department is a waiting vetting by the Law
Department. The respondents having railed to rebut the communication of the Development Commissioner Power, therefore, in law, attracts
presumption of correctness, coupled with the communication of the J&KSPDC, seeking execution of the Wheeling and Banking agreement
admittedly in absence of Implementation agreement makes it clear that the objection has no basis. These legal and factual aspects remained
unanswered on the part of the respondents.
However their Counsel has reiterated that he is under instructions to canvass that the execution of Implementation Agreement should be prior in
time. On what material, although pointedly asked but he could refer to none. Examining the issue in the light of the pleadings and available and
admitted documentary evidence, it is crystal clear that the respondents have understood the ambit of the agreement, therefore, they have
proceeded towards finalization of the agreements without subjecting execution of one agreement to the completion and execution of the other, a
correct understanding of the stipulations of the policy. The objection raised by Mr. Beg, to say the least, is just in air and devoid of force, thus fails.
Mr. Shah on the strength of averments made in the pleadings, argued that the petitioner has invested more than rupees 77 crores in setting up the
Hydel Project at Athwatoo Bandipora which has become fit for generation many weeks back and factum of fitness stands certified by the Chief
Electrical Inspector vide fitness certificate issued under No. DTTIC/2303-06 dated 13.03.2009 but is prevented to generate the electricity
because of failure of the respondents to discharge their obligations, cast upon them by the Policy relied upon by both the parties and in the process
he is subjected to a huge loss by way of interest, payable by him to the financial institutions which have financed his project. He argued further that
the demands of the petitioner, verbal and writing did not evoke any response on the part of the respondents, leaving no option for him but to
approach the court. It was also contended that even directions passed from time to time by the Chief Minister, requiring the respondents to finalize
the agreements and the latest being written direction, communicated vide No. DC/PD/TO-1/144/1723 dated 13-02-2009 did not witness
compliance, net result being, delay in generation of electricity by the petitioner's project, consequently, enormous loss to the petitioner. It was also
argued that the petitioner's victimization is a clear instance of red tapism and administrative lapses, which has at the same time burdened the State
exchequer by expenditure incurred on the officers/officials of the Corporation/Department assisting the Counsel besides direct expenses on the
litigation which expenditure in the given facts according to Mr. Shah merits recovery from the respondents-officers by imposition of costs.
The submissions of Mr. Shah recorded in the preceding paragraph need to be appreciated in the light of the fact that the respondents have
admitted the requirement of execution of the agreements but contention of their Counsel is that Implementation agreement has to be executed
before execution of Wheeling and Banking agreement, a contention not countenanced by the Policy. It is manifest that the respondents are not
averse to the execution of the agreements. It is also not disputed that the projects were allotted to the petitioner for development who has not only
altered his position but has already completed one out of the three projects namely Athwatoo (Bandipora), yet agreements await execution
consequently litigation at the cost of public money that too on avoidable litigation. The documentary evidence finding place on the record would
show that absence of promptitude on the part of the respondents in finalization of the agreements is writ large. It is saddening to note that even
interim direction dated 22-10-2008 passed by the court, in essence commanding the respondents to consider the demand of the petitioner seeking
execution of agreements was not complied with. Had they accorded consideration in compliance with the direction, in all probability the burden of
litigation on the State exchequer would have been avoided. In the given circumstances of the case, claim staked by Mr. Shah for imposition of
exemplary costs cannot be said to be without substance but having noticed that the Wheeling and Banking Agreement has reached the Law
Department for vetting and the Implementation Agreement is awaiting clearance at the level of the Commissioner/Secretary PDD, a lenient view is
called for, with a hope that in future the respondents functionaries of the State Government would be more careful, hence no order to costs.
In totality of the circumstances, the respondents are directed to take steps for execution of agreements relating to three projects, namely
Athwatoo (Bandipora), Tangmarg (Baramulla) and Mandi (Poonch) allotted for development to the petitioner vide allotment Nos. CE/CPD/234-
39 dated 02.05.2005, CE/CID/PDC/633-36 dated 20.06.2005 and CE/CID/238-41 dated 02.05.2005 respectively. Pending execution of the
agreements, the respondents shall take requisite steps forthwith to facilitate banking of electric energy by the petitioner and the energy so supplied
by the petitioner at the connecting point shall be recorded regularly by the respondents but the entitlement of the petitioner in lieu of such banking of
electric energy shall depend upon the terms and conditions of the agreements to be executed by the parties in terms of the policy. However, regard
being had to the fact that the petitioner is not going to get anything in return from the respondents before execution of the agreements, the steps for
execution of the agreements shall have to be taken by the respondents without loss of time. Needless to say that undue delay if any shall be at their
own peril and costs.
Disposed of along with CMPs. Interim direction dated 22.10.2008 shall merge in this final pronouncement.