SrinagarThe Supreme Court of India has dismissed a plea by GVK Ratle hydro electric project Pvt. Ltd. to pave the way for government to select a new agency for construction of 850 Mega Watts Ratle Hydroelectric Project on the River Chenab in Kishtwar district.
The foundation stone for the Ratle project, which was estimated to come up at a cost of Rs. 5,500 crore, was laid by then Prime Minister of India in June 2013.
The special leave petition is dismissed as withdrawn, ordered a division bench of the apex court comprising Justices Rohinton Fali Nariman and Sanjay Kishan Kaul on a special leave petition filed by GVK Ratle Hydro Electric Project Pvt. Ltd against the Jammu and Kashmir high courts verdict. The High Court on June 28 this year had dismissed the petition by the Hyderabad-based company, challenging the notice for termination of contract issued by the Government.
The project, located on highway (NH-24), will provide 16 per cent of its output free of cost to the state of Jammu and Kashmir.
Besides the Forest Clearance from the state government, the project has obtained the Environment clearance from Ministry of Environment and Forest (MoEF) and Techno Economic Clearance (TEC) from CEA.
The company in its plea before the high court had submitted that pursuant to the competitive bidding process conducted by the J&K State Power Development Corporation, it was selected as the successful bidder to Build, Own, Operate and Transfer (BOOT) 850 MW Hydroelectric Power Project on the Chenab River near village Drabshalla in Kishtwar district.
Certain issues cropped up at latter stage between the company and JKSPDC which could not be resolved following the former vide a letter (No. GVK/RHEP/D(PD)/215/31) on 1 December 2015 expressed inability to execute the project.
Subsequently, the state government issued notice for termination of contract in February 2017. Consequently, the notice was challenged by company in the High Court on various grounds.
A substantial issue arises as to whether issuance of the termination notice dated 09.02.2017 by the (government) after receiving the lenders letter dated 26.12.2016 whereby the lender had notified their intention to substitute the seller, was justified on the anvil of the various provisions of the PPA in particular Articles 14.3.4 and 14.3.5 and Schedule 15, a single bench of Justice Janak Raj Kotwal had observed after hearing counsels for both the sides.
As per the record available on the file, the appellant seems to have raised some issues coming in the way of implementation of the work vide their letter dated 12 November 2014 to the (government) followed by subsequent letters. All these letters were responded to by the (government) and every effort seems to have been made to resolve the issues, the court said, holding the company cannot claim balance of convenience in their favour to seek stay of the termination notice given the fact that the stage at which the appellant expressed their inability to execute the work and having regard to the nature of the factors responsible for such inability.
No irreparable loss would be caused to the appellant by not staying the termination notice because in any case the appellant-company is not interested in executing the work and had already expressed their inability in this regard, the High Court said, adding balance of convenience does not tilt in favour of the appellant (company) also for the reason that there is strong prima facie case of non-performance of contract by the appellant and they can well be compensated in money in case they establish a case of illegal termination of the contract at the appropriate stage in future.
The court had also declined stayed on the transfer of the assets of the company because such a course will create hurdle in taking necessary steps by the respondents towards execution of the work.
The (company) can well be compensated for taking over of their assets by the (government), if situation so warrants in future, and for that purpose a proper inventory of the assets shall be prepared and maintained by the (company), the high court had said.
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