With liberalization of fiscal and financial reforms in industry and to move the country to its pinnacles as a developed industrial country and to accomplish its right placement in the polity of the nation, the Government announced Privatization of the Power Sector. In order to supplement the power generation and bridge the gap between the supply and demand at various levels, not less than that of the Honble Chief Minister of the State announced and welcomed private participation in the energy field, both generation and distribution. It was in pursuance of the Policy of the Government for implementation of the Hydro Electric Projects in the State of Jammu and Kashmir through private investment, with a view to revive, modernize and make capable of generating electricity in the defunct Power House, known as "Canal Power House", after having remained defunct for more than 20 years, the petitioners, M/s Trehan Industries Pvt. Ltd., through its Managing Director, Ravish Trehan, claim to have come forward with a proposal for setting up of a power project as an Independent Power Producer (IPP). Managing Director, J&K State Power Development Corporation Limited (J&KSPDC) vide its communication dated 29-8-2001 advised the petitioners to prepare a Detailed Project Report (DPR) of the Canal Power House, Jammu on the basis of a residual life and I.F. Studies to be got conducted through any of the consultants enlisted by Power Finance Corporation of India. The petitioners were further advised by respondent-3 to submit the Detailed Project Report (hereinafter referred to as DPR) within a period of six months, failing which State Government would be at liberty to make alternative arrangements. In response to the advice of the respondent-3, a DPR was submitted by the petitioners on 18th September, 2001 addressed to respondent-3. It is further averred in the petition that the aforesaid communication along with Detailed Project Report indicated that the said Report has been prepared in association with T.A. Deo Dass, Ex-Member, Central Electricity Authority for renovating, modernizing and upgrading the Canal Power House, Jammu. It is further stated that the report submitted by the petitioners after having been thoroughly evaluated, was advised to be revised on the lines suggested and observations and the comments made by the Central Electricity Authority. It is further stated that the report submitted by the petitioners after having been thoroughly evaluated, was advised to be revised on the lines suggested and observations and the comments made by the Central Electricity Authority. It is further stated that respondent-3 advised and requested the petitioners vide its letter No. MD/PDC/CJ/1108-9 dated 17-11-2001 to revise the DPR in the light of the observations made by the Central Electricity Authority and keeping in view the following: (a) No expenditure becomes infructuous. (b) The important installations and offices etc. and their infrastructure requirement may not be sparable by PDD. (c) It is also required to be ensured that the R&M cost are economized for reducing the generation cost. 2. A Detailed Revised Project Report, in conformity with the advice of the J&K SPDC as approved by the Central Electricity Authority and technically cleared by the consultants, was submitted on November 21, 2001. It is further stated that the respondents thereafter did not ask for any clarifications or changes in the Revised Detailed Project Report submitted by the petitioners, which, it is stated, clearly amounted to the acceptance of the Project Report in its totality and entirety. That after the fulfillment of the necessary requirements and observance of requisite formalities, the Government finally cleared the Project on 29-1-2002 and conveyed the approval of the Honble Chief Minister to departmental proposal in anticipation of approval of the Cabinet. The Department was directed to issue necessary orders for the handing over of the assets of the Canal Power House to M/s Trehan Industries Corporation, petitioners, and be allowed to proceed with the Project, by the aforesaid Order of sanction for construction of Mini Hydro Electricity Project and modernization and renovation of the old defunct Power House under the private sector. The terms and conditions for the transfer were directed to be formulated/negotiated by a Committee, consisting of Chief Secretary, Financial Commissioner, Planning & Development, Financial Commissioner, Finance, Principal Secretary, PDD and Managing Director, Power Development Corporation, vide Government Order No. 35-PDD of 2002 dated 30-01-2002. The Power House is stated to have been handed over to the Petitioners, after proper inventory was prepared and the entire building and machinery was evaluated at the market rate by the approved valuers, vide Government Order No. 34-PDD of 2002 dated 30-01-2002. The Power House is stated to have been handed over to the Petitioners, after proper inventory was prepared and the entire building and machinery was evaluated at the market rate by the approved valuers, vide Government Order No. 34-PDD of 2002 dated 30-01-2002. The said order also provided for the constitution of the Committee for further finalization of the other terms and conditions. It is further stated that the work on the Power House was started thereafter by the petitioners. The matter, however, came to be examined finally at the top bureaucratic level Committee comprised of the Officers mentioned in the order dated 30-1-2002. The designated Committee, however, met on 25th February, 2002 and arrived at the following decisions: "(i) Five Kanals of land (to be reverified/properly demarcated) appurtenant to the hydel project will be transferred to M/S Trehan Industries Corporation on lease of 40 years, extendable after expiry of said period. While transferring the land on lease basis, all terms and conditions shall be clearly spelled out including the one that the land shall not be put on any other use except for power generation and other related activities. Violation will result in cancellation of the agreement and land will automatically revert back to the State Government. Other terms and condition as are applicable to industrialist - granted land on lease would be applicable in the said case & incorporated in the lease deed. (ii) As far as the machinery/equipment available in the said power project is concerned, the Book value would be get evaluated after drawing a proper inventory and then further negotiations will be held with the entrepreneur about its transfer, which could be either by way of its outright sale or on lease basis. MD, JKPDC will have this evaluated by a competent evaluator. (ii) The entrepreneur will supply power to the PDD @ Rs. 3.00 per unit to start with, which will be subject to review and governed by the award of the State (Electricity) Regulatory Commission as and when constituted and mandated to fix the tariff. (iii) The PDD will clear all dues on account of sale of power within a period of one month which will be backed by an L.C. in case of default 1% penal interest will be payable, if the payment is not made within a period of one month. (iii) The PDD will clear all dues on account of sale of power within a period of one month which will be backed by an L.C. in case of default 1% penal interest will be payable, if the payment is not made within a period of one month. (iv) P.P.A. shall be signed between M/S Trehan Industries Corporation and Development Commissioner Power accordingly. (v) It was also decided that policy guidelines will be formulated by the PDD regarding involvement of private sector in taking up mini/micro hydel projects for generation. The draft guidelines will be discussed by the Committee before they are formally put up to the Cabinet for approval." 3. It is also stated that for completing further formalities regarding Power Purchase Agreement, Special Secretary to Government, Power Development Department, vide letter No. PDD/VII/STS/82/2001 dated 15-3-2002 asked the Development Commissioner, Power, J&K, to draft PPA/execution of the agreement and initiate other proceedings immediately and to sign the agreement with M/s Trehan Industries Corporation. Further case of the petitioners is that, in the meanwhile, elections were declared and the Power Development Department conveyed to the Election Commission that the assets of Canal Power House have already been handed over to M/s Trehan Industries Limited vide Government Order No. 34-PDD of 2002 dated 30-01-2002 with the approval of Honble Chief Minister and sought concurrence only for its confirmation by the Cabinet. It was further conveyed that the works on the Project have already begun on February, 2002. The Election Commission, however, advised the Government to wait till the completion of the elections. Soon after the elections, the political set up in the State got changed and the present Government came in power in November, 2002. The petitioners further submitted that the new Government also reviewed the progress on the Project in asking the petitioners to submit physical and financial progress report. The work on the Project continued. As the Power House had become operational on the completion of the work and only generation of the power was to commence, the petitioners approached the Government and, accordingly, informed the Government that the Project has been completed and only needs to be connected with the Grid. The work on the Project continued. As the Power House had become operational on the completion of the work and only generation of the power was to commence, the petitioners approached the Government and, accordingly, informed the Government that the Project has been completed and only needs to be connected with the Grid. The case of the petitioners was, however, sent to Cabinet and in its meeting on 14th February, 2003, the present Government, with a view to assess the situation on spot, decided to depute a high level Committee headed by the Power Minister. The Power Minister, however, visited the spot and found the Project ready for generation of power. A detailed report is stated to have been submitted to the Cabinet by the Power Minister intimating the status of the work done in the Power House along with recommendation that since the Power House was ready, it may be allowed to be started and any step which may have the effect of impeding the process of privatization of power, will have an adverse impact on the announcements made by the Government at various levels. That the Cabinet, however, notwithstanding the detailed report submitted by the high level Committee headed by the Power Minister and utterly ignoring the factual background in which the modernization, renovation of the Canal Power House was handed over to the petitioners for generation of hydro electric power and had culminated to the stage of having become operational and only generation of power was to commence, had taken a decision No. 90/6 dated 19-05-2003 and ordered that the Canal Power House be taken over by the J&K State Power Development Corporation from the petitioners, and constituted a Committee for working out the estimates of the work done. Aggrieved by the aforesaid action of the respondents, the petitioners have sought the quashment of the Cabinet Decision No. 90/6 dated 19-5-2003, followed by Government Order No. 100-PDD of 2003 dated 31-5-2003, whereby the Canal Power House has been ordered to be taken over from the petitioners by respondent-3 through respondent-2 and Order No. 97-PDD dated 21-5-2003, by issuance of a writ of certiorari and further commanding the respondents to execute Power Purchase Agreement with the petitioners and implement the terms and conditions settled by the designated Committee, and further restraining the respondents from dislodging the petitioners from the Canal Power House, Jammu, or taking over the above said Power House from the petitioners other than and except in accordance with law, in invoking the writ jurisdiction of the Court under Article 226 of the Constitution of India read with section 103 of the Constitution of Jammu and Kashmir. The petitioners have challenged and canvassed the correctness of the impugned orders in the writ petition on the following grounds: (i) The impugned order being patently against the basic principles of law and natural justice cannot sustain the test of law. (ii) The respondents by their conduct were legally estopped to act contrary to the orders earlier passed including the Government Order No. 34-PDD of 2002. (iii) The decision regarding privatization already had the sanction of the cabinet was not required to be again sent back to the Cabinet. (iv) No such decision has been taken in respect of Mega Power Houses, which were also cleared under the same policy of inviting private participation in power sector. (v) A conscious decision taken by the earlier Govt. could not have been withdrawn as such decision brings within its folds the principles of equity and fairness and would dehore the elementary principles of administration. (vi) Since all the terms and conditions already stood approved and only formality of signing the agreement remained otherwise it carried all essential traits of an agreement and thus it cannot be said that any procedural or codal formality was not observed. 4. In the reply affidavit filed by the respondents, it has been averred that the Government, at no stage, has taken a policy decision with respect to the renewal of the Power Project by any mode other than to get it revived by the State Agencies. 4. In the reply affidavit filed by the respondents, it has been averred that the Government, at no stage, has taken a policy decision with respect to the renewal of the Power Project by any mode other than to get it revived by the State Agencies. It is further asserted that in a meeting under the Chairmanship of the Chief Secretary, it was in principle agreed that private entrepreneurs should be encouraged and the J&KSPDC was asked by the Administrative Department to take further steps for renovation and modernization of Mohra Power Project and Canal power House and to enter into MOU with M/s Shakti Hydro Electric Company and M/s Trehan Industries Corporation. It is also stated that the Detailed Project Report (DPR) received from the petitioners for renovation and modernization of Canal Power Project was submitted to Central Electricity Authority for scrutiny. A Committee constituted to examine the DPR of Canal Power House submitted its report in indicating that the cost of generation of power would get reduced to Rs. 1.174 per unit, if the revival of the Power House was undertaken by J&K SDPC and taking into account the subsidy, which could be obtained from MNES. Further assertion of the respondents in their reply is that without placing the matter before the Cabinet, the General Administration Department conveyed the approval of the then Chief Minister for handing over the Canal Power Project to the petitioners. That neither any agreement has been executed by the Government for undertaking the work nor any terms and conditions were settled between the parties. Though it was ordered that the Power Project shall be handed over to the petitioners, yet till date no agreement has been executed. Though the Government Order dated 30th January, 2002 clearly contemplated that the Canal power House is to be handed over to the petitioners for renovation/modernization and generation of the hydro electric Project and the terms and conditions for the transfer shall be finalized by the Committee of the Officers indicated therein, but the same has not been done till date. Further stand of the respondents is that since the terms and conditions for handing over of the Power Project for renovation, modernization and generation of hydro electric power has not been finalized, the petitioners do not get any right of getting the Power Station renovated. Further stand of the respondents is that since the terms and conditions for handing over of the Power Project for renovation, modernization and generation of hydro electric power has not been finalized, the petitioners do not get any right of getting the Power Station renovated. That even the letter dated 15th March, 2002, addressed by the Special Secretary, Power Development Department to Power Development Commissioner mentioned that PPA has to be signed by the petitioners and accordingly draft PPA should be prepared immediately, yet the same has neither been drafted nor the terms and conditions settled between the parties. The work of minor nature done by the petitioners, it is stated by the respondents, was without any agreement and proper authorization. The work of renovation, modernization, if any undertaken by the petitioners, being without any agreement and observing codal formalities and procedures, has been done at their own risk and responsibility. The matter was, however, referred by the Government to the Cabinet by submitting the memorandum and a decision was taken in its meeting by the Cabinet vide No. 90/6 dated 19-05-2003 and the impugned order came to be passed on the basis of the said decision for taking over the Mini Hydro Electric Canal Power House by the J&K SDPC from the petitioners, M/s Trehan Industries Corporation, with immediate effect and a Committee has been constituted for determining the estimates of the work done by the petitioners on the Project Canal Power House. It is further stated that the impugned Cabinet decision followed by the consequential orders made strictly in accordance with the provisions and for the public purpose. It is further submitted that since the Power Project was handed over without the approval of the Cabinet and now the Cabinet has the power to take a decision and, while exercising its power, a decision has been taken, which cannot be challenged by the petitioners, as the said decision did not offend the provisions of Article 14 of the Constitution of India. Further contention of the respondents is that since the handing over of the execution of the Power Project is within the competence of the Cabinet, the visit at the Canal Power House by the Power Minister does not improve and substantiate the cause of the petitioners. Further contention of the respondents is that since the handing over of the execution of the Power Project is within the competence of the Cabinet, the visit at the Canal Power House by the Power Minister does not improve and substantiate the cause of the petitioners. Since the work has been executed by the petitioners without the approval of the competent authority, they cannot press/make their claims on the basis of promissory estoppel. The respondents further asserted that no policy decision has been taken by the Government to hand over the Power House to the petitioners nor there was any agreement between the petitioners and the respondents to execute the work on the settled terms and conditions and, therefore, the petitioners have neither any justifiable cause to agitate nor any right of the petitioners is violated, so as to maintain the writ petition. After filing the reply to the writ petition by the respondents, LPA against the interim order dated 03-06-2003, directing the maintenance of status quo, was also preferred. The interim direction, however, stood vacated by the Division Bench vide its order dated 07-07-2003. The petitioners, aggrieved by the vacation of the interim order by the Division Bench, preferred Special Leave Petition before the Honble Supreme Court. The Apex Court, while granting the leave, was of the view that the Division Bench ought not to have interfered with the ad-interim order, much less entertained it. The Apex Court further observed that since the special leave petition has been filed and the matter being subjudice, directed that status quo as on 10-7-2003 at 10.30 a.m. shall be maintained. This direction was issued in view of the submission of the learned counsel appearing on behalf of the appellants, M/s Trehan Industries Pvt. Ltd. and Anr., that the respondents had taken possession of the Canal Power House on the basis of the impugned order passed on 10-7-2003. Since the respondents had already taken the physical possession of the Canal Power House, in view of the order of the Apex Court, they were required to maintain status quo ante, as it existed on 10-07-2003. It is stated that possession of the Canal Power House was delivered by the respondents on 18-07-2003 on the basis of the inventory prepared at the time of the taking over the possession of the Canal power House in the absence of the petitioners. It is stated that possession of the Canal Power House was delivered by the respondents on 18-07-2003 on the basis of the inventory prepared at the time of the taking over the possession of the Canal power House in the absence of the petitioners. The petitioners, thereupon, filed an application and sought permission to amend the writ petition so as to introduce the inventory prepared by the respondents on 10-07-2003 when they took the possession of the Canal Power House from the petitioners, and with the leave of the Court to place on record both the inventories, one prepared in the year 2001 by the respondents at the time the Power House was handed over to the petitioners and the inventory prepared on 10-07-2003 when they took back the possession of the same and thereafter delivered back the possession on 18-07-2003 in terms of the order passed by the Apex Court. It was further contended in the application that these events having taken subsequent to the filing of the writ petition and reply filed by the respondents and the rejoinder thereafter, it has become necessary to bring these facts on record to quell the plea taken by the respondents that only minor work on the Canal Power House has been executed by the petitioners. It was further stated in the application that the petitioners, during the pendency of the writ petition, came in possession of letter dated 29-1-2002 wherein it is clearly mentioned that the Honble Chief Minister, pursuant to the proposal submitted by the Power Development Department, approved the handing over of the assets of Canal Power House to the petitioners and further allowed them to proceed with the project, with further terms and conditions to be negotiated by the Committee consisting of the Chief Secretary and other top officers, and also a communication dated 13-9-2002 addressed to the Chief Electoral Officer, Jammu & Kashmir, Srinagar seeking concurrence before submitting the matter to the Cabinet for its approval. Further, the petitioners had also placed on record the agreement between the petitioners and Hydro Power - HPP Energies India Pvt. Ltd. with a Foreign concern of France for the purpose of installation for extension of one extension unit in the existing Canal Power House, in order to meet the stand of the respondents regarding execution of the work in the Canal Power House, by adding paras 9-A to 9-E after para 9 and para 17-A after para 17, as described in the amendment application, with a further addition in the prayer detailed at page 12 of the said application, the application was allowed and the amended petition filed along with the application was directed to be taken on record by the Court vide its order dated 30th July, 2003. 5. The respondents in their reply to the amended writ petition reiterated the plea that without executing any agreement with the respondents, the petitioners do not get any right to execute the work. The work executed, if any, by the petitioners in the absence of concluded contract between the parties, was at their own risk and cost and does not confer any right on the petitioners, legally enforceable in the Court of Law. It is further stated that the power cost worked out by the Committee constituted by the J&K SPDC could have been much lower than the rate mentioned by the petitioners. That a mere preparation and submission of the Project Report does not entitle the petitioners for the allotment of the work. Without there being any acceptance from the respondents and agreement signed, the petitioners cannot assert their claim. The inventories prepared are a matter of record and in view of the decision already taken by the Government to take over the Canal Power House from the petitioners it was ordered that the estimates of the work done by the Firm be determined by the Committee and put up for orders before the Cabinet. The respondents further emphatically denied that the Power House has become operational awaiting connectivity with the Grid Station. The respondents further contended that there has been no policy decision and the possession of the Power House has been taken over by the petitioners without execution of any agreement and started work without authorization from competent authority, without adopting codal formalities and procedures. The respondents further contended that there has been no policy decision and the possession of the Power House has been taken over by the petitioners without execution of any agreement and started work without authorization from competent authority, without adopting codal formalities and procedures. The decision taken by the Cabinet impugned in the writ petition is strictly in conformity with law and in public interest and, therefore, does not envisage any interference in the petition, which is not maintainable under Article 226 of the Constitution. Further plea has been taken by the respondents with regard to the maintainability of the writ petition on the ground that it involves disputed questions of facts. To controvert the stand taken by the respondents, with regard to policy decision, in their reply affidavit, the petitioners in their rejoinder submitted that it is clearly contrary information derived from the record placed on the file. It is further stated that steps taken by the respondents in pursuance of the announcement of the Government to invite private investment in power sector at various levels, headed by none other than the Chief Minister, submission of the DPR of Canal Power House to Power Development Corporation (PDC) and further PDC asking the petitioners to submit revised DPR in conformity with the advice, comments and observations of Central Electricity Authority, handing over of the Project with the approval of the Chief Minister and asking to start work, which culminated at the stage of completion up to generation of electricity except connectivity with the Grid Station, when all taken together, clearly demonstrate the intentions of the respondents to enter into a contract with the petitioners for the avowed purpose. Further stand of the petitioners is that constitution of a Committee to finalize the terms and conditions of the transfer and directing PDD to sign the agreement after preparing a draft agreement, further strengthens the cause of the petitioners and it exhibits unequivocally the intentions of the respondents to allow the petitioners to work on the Project and enter into an agreement with them and, thereafter, constant monitoring of the progress of the Project was made in asking M/s Trehan Industries Pvt. Ltd., petitioners, to submit the physical and financial progress report. It is further submitted that the Government, after having examined the implementation of the Hydro Electric Project and again `action taken report in October, 1997, started finalizing the same with Baglihar Project with 450 M.W. and also Sawalkot Project through M.O.U. way. That the Power Project regarding which petitioners submitted a Detailed Project Report was finalized only after the aforesaid policy stood implemented. The petitioners were called upon to submit a Detailed Project Report by the respondents, based upon the aforesaid policy decision. This report after scrutiny by the Central Electricity Authority was again revised in accordance with the advice of the CEA and at the instance of the PDC. The entire finance in the Project was to be borne by the petitioners and no funds were to be provided by the State or the Ministry of Non-Conventional Energy source. The alleged working out of the case at the cost of Rs. 1.174 per unit of the electricity in the event of the revival of the Power House by the Department, is without any basis and impracticable. It is further disclosed from the documents placed on record that the Cabinet approval will be sought only when the investment decision will be taken and, thus, plea of the respondents with regard to the absence of the policy decision stand controverted by their own record. The minutes of the meetings clearly disclosed that terms and conditions stood already settled and the Power Development Corporation was conveyed to prepare draft Power Purchase Agreement for execution. The respondents, therefore, it is stated, are legally estopped on account of doctrine of estoppel to take a stand contrary to their own record, policy decision and action taken in pursuance thereof. In controverting the plea taken by the respondents with regard to the maintainability of the writ petition on the ground that it involves disputed questions of facts, the petitioners submitted that since the inventory report was duly prepared by the respondents at the time of handing over of the Power House, it does not give rise to any dispute questions of facts because again the inventory was prepared at the time when the Power House was delivered back to the petitioners in pursuance of the directions of the Apex Court and volume of work executed by the petitioners can be drawn by comparison with the earlier inventory. Further assertion of the petitioners is that the order impugned is contrary to law and having been passed without affording any opportunity of being heard and giving reasons and justifications, is in violation of Article 14 of the Constitution and liable to be quashed. 6. I have heard the learned counsel appearing for the respective parties at length and considered their rival contentions in context with the material on record, meticulously. The record produced by the respondents has also been perused carefully. The moot questions that require to be considered in this writ petition are: (a) Whether the writ petition is not maintainable in view of the fact that the petitioners have raised disputed questions of facts? (b) Whether there has been any policy decision taken by the Government at any stage with regard to Canal Power House regarding its revival, renovation, modernization and generation of electricity? (c) Whether there has been any formal agreement with the petitioners? (d) Whether in the absence of the formal agreement executed between the petitioners and respondents, the petitioners have rebuilt the Power House/executed minor repairs at their own risk and cost? and (e) Whether the Power House has been handed over to the petitioners without observing proper procedures and codal formalities? 7. So far as preliminary objections with regard to the maintainability of the writ petition is concerned, Mr. A.H. Naik, learned Advocate General appearing for the respondents, submitted that though petitioners appear to have done some minor work and that too without authorization and without any agreement, but claims to have completed work of renovation, modernization and reached the final stage of commencement/generation of electricity after spending nearly Rupees five crores, which gives rise to dispute about the material facts and involves the disputed questions of facts. It is not in dispute that the contract for renovation, modernization and generation of power of Canal Power House was given with the approval of the Chief Minister and the entire bureaucracy was associated before and thereafter. The inventory list of the Canal Power House was prepared on 3-12-2001 at the time of handing over of the Project to the petitioners and also all assets including machinery and civil works evaluated on the market rate. The inventory list of the Canal Power House was prepared on 3-12-2001 at the time of handing over of the Project to the petitioners and also all assets including machinery and civil works evaluated on the market rate. It is also not disputed that after the vacation of the order of status quo passed by the Honble Division Bench of this Court on 7-7-2003, the physical possession of the Canal Power House was taken over by the respondents in absence of the petitioners on 10-07-2003. The possession of the Power House was, however, restored and delivered by the respondents to the petitioners on 18-07-2003. It is further stated that two inventories were prepared; first one prepared at the time of handing over of the defunct Canal Power House to the petitioners, on 03-12-2001 and also the second inventory of the Power House prepared at the time of taking over by the J&K SPDC in pursuance of the vacation of the status quo order by the Division Bench, viz., at the time of handing back over the possession after the special leave was granted and status quo as on 10-07-2003 at 10.30 a.m. was directed to be maintained by the Apex Court. This clearly demonstrates that there is no dispute with regard to the nature of the work executed by the petitioners after the defunct Power House was handed over because it can be gathered from a comparison to be drawn with the earlier inventory. Mr. M.L. Verma, senior Advocate appearing for the petitioners, however, vehemently urged that the extent and nature of the work executed by the petitioners after the Power House was handed over to them after preparing inventory, vide Government Order dated 30-01-2002 and estimates as per the market value can be properly and accurately worked out and adequately drawn when compared with the inventory prepared by the respondents at the time of taking over of the possession of the renovated, modernized and operational for generation on 10-07-2003 and thereafter further again prepared the inventory when delivered the possession of the said Power House to the petitioners in compliance to the orders of the Apex Court dated 11-07-2003. Further submission put across by the learned Advocate General is that the right claimed by the petitioners is not capable of being established in the summary proceeding under Article 226 because it requires a detailed examination of the documents and the evidence. 8. Undoubtedly, the object of Article 226 is the enforcement and not the establishment of a right, or title. A petition under Article 226 cannot be converted into suit. In case of highly disputed questions of fact for decision, the civil suit will be the appropriate action. In general, therefore, the disputed question of fact is not investigated in a proceeding under Article 226 of the Constitution of India. This is, however, a rule of discretion and not of exclusion of jurisdiction. Hence, the Court is not, in a proceeding under Article 226, incompetent to decide an issue of fact, which can be determined from the material on record. It follows that the Court should not reject a petition under Article 226 on the ground that it raises a question of disputed facts, where the question can be determined from the material on record. The petition, therefore, cannot be held to be incompetent or not maintainable merely observing that it raises a question of fact, without determining whether the question can be decided on the factual materials on record or not. 9. Adverting to the factual matrix of the case and the material on record, the dispute as to whether minor work has been done on the Canal Power House after it was handed over by the Government to the petitioners vide order No. 34-PDD dated 30-01-2002 or the work of renovation, modernization has been completed and the Power House is ready for generation of power. There is no dispute that inventory was prepared by the respondents at the time of handing over of the so-called defunct Canal Power House. There is no dispute that inventory was prepared by the respondents at the time of handing over of the so-called defunct Canal Power House. On going through the material on record produced in the case, it is indisputably gatherable that there is no dispute with regard to the nature of the work already executed by the petitioners and can be conveniently estimated and worked out by comparison to be withdrawn from the inventory prepared at the time of handing over of the Power Project on 30-01-2002 with the inventory prepared at the time of taking over of the renovated and stated to be modernized, complete and ready for generation of power and, subsequently, its possession was delivered back to the petitioners in pursuance of the order passed by the Apex Court. There is, in my view, neither any substance nor weight in the submission made by the learned Advocate General that the petition involves a disputed question of fact and, thus, is not maintainable, to merit acceptance. 10. So far as policy decision stated to have been taken by the Government way back in the year 1997 in regard to privatization of the power sector is concerned, Mr. A.H. Naik, learned Advocate General, emphatically denied that the Government, at any stage, has taken such a policy decision. It was, however, conceded that at one stage in the meeting taken under the Chairmanship of the Chief Secretary, it was in principle agreed that such ventures from the Private Sector need to be encouraged and Power Development Corporation was advised by the Administrative Department to take further steps to enter into MOU with M/s Shakti Hydro Electric Company and M/s Trehan Industries Corporation for renovation and modernization of Mohra Power Project and Canal Power House respectively. Assuming that no formal decision had been taken at that time, but it had been repeatedly announced by the Chief Minister that the State would welcome inviting private entrepreneurs for their participation in the energy field in both generation and distribution. It is further revealed from the record produced by the respondents that at one point of time, the Government had made a proposal to TATA Group to make distribution of electricity in the area of their own choice. It is further revealed from the record produced by the respondents that at one point of time, the Government had made a proposal to TATA Group to make distribution of electricity in the area of their own choice. Even then, there was no question of tendering because it was a standard procedure in all over the country that in matters such as this direct negotiation is acceptable. It was found not desirable to auction the Power House as that would mean to accept the highest bid, which was not the intention. The objective was to generate electricity and not to maximize the return from assets. The primary consideration was the former and the latter was the secondary consideration. The record further shows that it was the approval/decision of the Chief Minister to give a contract for renovation/modernization and generation of power in Canal Power House and the entire bureaucracy was involved in its implementation. It was in response to the offer/utterance of the Chief Minister in public at various levels for privatization in the energy field, it is stated that the petitioners approached and requested for setting up of a Power Project as an Independent Power Producer. The petitioners were advised by the Managing Director, J&K SPDC to prepare a Detailed Project Report of the Canal Power House and reliance has been placed on communication No. PDC/MD/PF/4680-82 dated 29-08-2001, which reads as under: "JAMMU & KASHMIR STATE POWER DEV. CORP. LTD. (A GOVERNMENT OF J&K ENTERPRISE) No. PDC/MD/PF/4680-82 DATED : 29-8-2001 M/s Trehan Industries Corporation J-6 West Avenue Sainik Farms New Delhi Subject: Preparation of DPR for Canal Power House Jammu. Dear Sir, With reference to your request for setting up of a power project as a Independent Power Producer (IPP), you are advised to prepare a Detailed Project Report of Canal Power House Jammu on the basis of a residual life and I.F. Studies to be got conducted through any of the consultants enlisted by Power Finance Corporation of India for such studies. The preparation of DPR will entirely be at your cost and expenses. The DPR should be submitted within a period of 6 (six) months, failing which the State Government of J&K/J&K SPDC shall be at liberty to make alternative arrangements. Yours faithfully, Sd/- (A.M. Mattu) Managing Director Copy to the: 1. Principal Secretary to Government, Power Development Department, Srinagar. 2. The preparation of DPR will entirely be at your cost and expenses. The DPR should be submitted within a period of 6 (six) months, failing which the State Government of J&K/J&K SPDC shall be at liberty to make alternative arrangements. Yours faithfully, Sd/- (A.M. Mattu) Managing Director Copy to the: 1. Principal Secretary to Government, Power Development Department, Srinagar. 2. Principal Private Secretary to the Chief Secretary for information of the Chief Secretary." 11. Report prepared in association with T.A. Deo Dass, Ex-Member, Central Electricity Authority, the empanelled consultant of PFC, was submitted to the respondents. After scanning the report submitted by the petitioners and on the basis of the suggestions, observations and comments by the Central Electricity Authority, the respondents advised the petitioners to prepare a Detailed Revised Project Report. A comprehensive Revised Report, technically okayed by the consultants and in pursuance of guidelines of the Central Electricity Authority prepared by the petitioners, was submitted to the respondents on 21st November, 2001. The matter was examined by the Committee of the top level Officers of the State, constituted vide Government No. 35-PDD of 2002 dated 30-01-2002, in a meeting held under the Chairmanship of Chief Secretary on 25-02-2002 to discuss and finalize the terms and conditions for the transfer of Canal Power House, Jammu (referred above). It is further disclosed from the record that the petitioners, M/s Trehan Industries Pvt. Ltd., were identified as the one who would renovate and run Canal Power House, Jammu, in the light of the decisions taken in a meeting headed by the Chief Secretary on 24-07-2001. Since the said entrepreneur had shown its willingness for required renovation and generation of power, the J&K State Power Development Corporation felt that it would be appropriate that Canal Power House is transferred to the petitioners as early as possible so as to start with it, and for that it would require to hand over the Canal Power House to the private entrepreneur. It is further revealed from the scanning of the record made available that it was on the approval of the Departmental proposal by the Chief Minister in anticipation of the approval of the Cabinet, necessary orders for handing over of the assets of the Canal Power House to the petitioners were issued by the General Administration Department that the petitioners be allowed to proceed with the Project. It was further conveyed that the terms and conditions for transfer will be finalized by negotiation by the Committee specified in the communication dated 29-01-2002. In regard to terms and conditions, these were broadly agreed to by the party in the sense that assets would be assessed by the J&K State Power Development Corporation, which would be accepted by the party and the purchase price of the power would not be more than the price at which it is being imported at present. In fact, it would be lower. It was considered reasonable to hand over the Power House so that the renovation work could be finished and the electricity generated in the shortest period of time, as the assessment of the value of assets would take time. This was, in fact, in the interest of the State, as the entire amount is to be invested by the petitioners and the State has no financial burden. In any case, it included the acceptance by the party of the assessment made by the State Government. It is further unfolded from the record that, in fact, mega project involving thousands of crores of rupees has been settled through negotiation with a single party without either national or global tenders. This includes the Baglihar and Sawalkote Projects. In fact, the Government of India Agencies in the Power Sector, such as NHPC and NTPC also follow the same procedure. 12. In the present case, a mini Power House involving a small capacity of 1 MW, in which there is no financial involvement of the State was considered and Rupees five crores were being invested by the private party. The State will not only put the dead assets to use, but earn huge revenue from the same. The Committee of senior Officers of the State headed by the Chief Secretary considered the proposal and made recommendations to the Chief Minister, who approved the same in anticipation of the Cabinet approval in the interests of expeditious implementation of the Project. The Power House was handed over to the petitioners by the J&K SPDC in furtherance of this action on the basis of the approval by the Chief Minister. The Power House was handed over to the petitioners by the J&K SPDC in furtherance of this action on the basis of the approval by the Chief Minister. Admittedly, it was the decision of the Chief Minister in pursuance of public utterances for private participation in energy field, which stood implemented by the functionaries of the Government by giving a contract for renovation, modernization and generation of power in the Canal Power House. The Power House was handed over in pursuance of the approval of the Chief Minister by the Power Development Corporation after observing and completing the necessary formalities, viz., after preparing requisite inventory. Mr. A.H. Naik, learned Advocate General, however, pointed out during arguments that the rules of business required that the decision to give the contract of the Canal Power House was to be taken by the Cabinet, but neither in the pleadings nor in the arguments, rules of business were pointed out. In such circumstances, according to Mr. Verma, learned senior Advocate for the petitioners, no further approval or confirmation or clearance was required from the Cabinet. Mr. Verma further submitted that if any further approval or confirmation of the Cabinet, according to the respondents, was required, there does not have any reasons why such approval was not given. He further buttressed his arguments and submitted that the Power Minister in the present Cabinet was deputed by the Cabinet at its meeting on 14-02-2003 to visit the Canal Power House along with senior officers of the PDC and to make assessment and report to the Cabinet based on which the Cabinet was to decide the matter. Further submission of Mr. Verma is that Power Minister did visit the Power House with the officers of the PDC and made a report. The report submitted by the Power Minister is found from the record dated 08-04-2003 and for facility of reference, is reproduced as under: "In pursuance of the Cabinet Decision No:32/3 dated February 14, 2003 I visited the site. During the visit following were also present:- (1) Principal Secretary, Power Development Department J&K Chief Engineer, M&RE, Jammu (2) Superintending Engineer& Executive Engineer of the Power Development Corporation (3) Shri Ravesh Trehen, the Entrepreneur. As per the present position of the Power House, it was found that renovation work has been completed, but, for the connectivity with the Receiving Station, it is ready for generation. As per the present position of the Power House, it was found that renovation work has been completed, but, for the connectivity with the Receiving Station, it is ready for generation. As per the report given by the SE of Power Development Corporation, Entrepreneur have so far spent Rs. 162.19 lakhs {Civil, Hydro-mechanical works = Rs. 70.10 lakhs. Electro-mechanical Rs. 92.09 lakhs}. On the ground, it was noticed that the Entrepreneur had carried out the renovations after taking over the possession from the Executive Engineer, Power Development Corporation. Inventory list containing description of equipment and material stands already prepared under the signatures of the Executive Engineer and same also handed over to the entrepreneur. No agreement regarding cost of energy per unit has been signed so far. In fact even the cost has not been mutually agreed which needs to be done. Now there are two alternatives at this state, One, Power house can be taken back from the said entrepreneur. In that case, the State is required to pay the amount invested by the Entrepreneur though transferring back is not going to be smooth as it is apprehended that it might lead to litigation though the PDC has no difficulty in handling the premises and start generation after making up the deficiencies in the said Hydro-electric Project. The second point to be taken note is the adverse publicity which such take back may create especially when the Government is inviting and encouraging private investment in this sector and even policy paper prepared by the Power Development Department is with the Cabinet for consideration and approval. Keeping the above facts in mind at this stage, I would recommend that the Memorandum submitted to the Cabinet by the Power Development Department requires to be considered and approval. Sd/- Minister of Power (8-4-03)" 13. Mr. Verma further submitted that neither it is borne out from the record nor from the pleadings nor from the reply to the writ petition as to what proper procedures and codal formalities have not been followed or that policy in regard to privatization has neither been laid down nor formulated. Privatization of Power Sector was one of the priorities, objectives and goals, when the country embarked upon the economic liberalization. Mr. Verma further pointed out that equally is the policy of the present Government to have private participation in power generation. Privatization of Power Sector was one of the priorities, objectives and goals, when the country embarked upon the economic liberalization. Mr. Verma further pointed out that equally is the policy of the present Government to have private participation in power generation. Admittedly, the decision to give the contract for renovation, modernization and generation of the power in the Canal Power House was of the then Chief Minister of the State and which was given effect to by the functionaries of the Government at top bureaucratic level. This decision was followed by the order issued by the Government vide Order No. 34-PDD of 2002 dated 30th January, 2002 in regard to handing over of the Canal power House to M/s Trehan Industries Pvt. Ltd. for renovation, modernization and generation of hydro-electric power with a further direction to finalize the transfer of assets and liabilities by a Committee headed by the top officials of the bureaucracy explicitly indicated therein. It is not in dispute that the Canal power House was handed over after proper inventory prepared by the officials of the J&K SPDC and the work started on the Canal Power House by the petitioners. The codal formalities and procedures to be followed were either by bidding or by MOU route available. It is significant to point out that not a single hydro-electric Project with private investment has been awarded through the bidding route in the past years since liberalization of economy in 1991, as is clearly indicated in the strategy for hydro-electric Project placed on record. 14. In case titled Sachindanand v. State of West Bengal reported as 1987 (1) SCC 295, the Apex Court held that: "Whether decision of commercial nature taken by State Government after a process of protracted discussions, consultations, negotiations and consideration of various aspects, then absence of few considerations not fatal to the decision on ground of non-application of mind." "Though to sell the property by public auction or by inviting tenders is the ordinary rule, but it is not an invariable rule." "There may be compelling reasons necessitating departure from the general rule." "Director negotiations with those who had come forward was without doubt the most reasonable and rational way of proceeding in the matter rather inviting tenders or holding public auction." 15. Traumatic experience stated to have been faced earlier was that, in fact, tenders invited have either been cancelled or not processed due to inadequate response. In a conference convened by the Ministry of Power, Government of India in May, 1997 on Hydro Power Policy, after a thorough discussion, consensus reached was that Mega Hydro Projects should be set up by joint ventures by MOU route, at least for sometime. In such circumstances, it cannot be said that the decision/approval of the Chief Minister for awarding a contract was not the decision of the Government when it has been carried out and given effect to by the functionaries of the Government and thereafter the work started and reached its culmination after the completion of the Project and ready for generation of power, explicitly found in the report of the Power Minister, who visited the Canal Power House, at the behest of the Cabinet, accompanied by the top officials of the Power Development Department and gave its positive recommendations. The contention raised by Mr. A. H. Naik, learned Advocate General, that contract for renovation, modernization and generation of power in the Canal Power House could not be awarded without a Cabinet decision and observing codal formalities, pales into insignificance and does not merit acceptance, in view of the factual score depicted hereinabove and extracted from the record produced by him in the Court. 16. It is not in dispute that the handing over of the Canal Power House for renovation, modernization and generation of power, to the petitioners, M/s Trehan Industries Pvt. Ltd., was by the previous Government. After elections, the new Government monitored its status and progress, besides financial input by the petitioners, for a space of about seven months and suddenly thereafter took a decision vide Cabinet decision No. 90/6 dated 19-05-2003 that the said Power House be taken over by the J&K SPDC, followed by Government Order No. PDD-VII/Sts/82/2001 dated 21-05-2003 according sanction to the taking over the Mini Hydro Electric Canal Power House by the J&K SPDC from M/s Trehan Industries Corporation, without assigning any reason and in ignoring the report and recommendations of the Power Minister deputed to assess the ground realities, at the back of the petitioners, without affording any opportunity of being heard, in violation of principles of natural justice and rule of audi alteram partem. It is pertinent to point out that the decision taken by the Government is not required to be easily nullified by change of the Government. In the execution of decision taken by the prevision Government, succeeding Government is duty bound to continue and carry on the unfinished job. Similar is the view taken by the Apex Court in State of Haryana v. State of Punjab, AIR 2002 SC 685, which reads as under: "The decision taken at the governmental level should not be so easily nullified by a change of Government and by some other political party assuming power, particularly when such a decision affects some other State and the interest of the nation as a whole. It cannot be disputed that so far as policy is concerned, a political party assuming power is entitled to engraft the political philosophy behind the party, since that must be held to be the will of the people. But in the matter of governance of a State or in the matter of execution of a decision taken by a previous Government, on the basis of a consensus arrived at, which does not involve any political philosophy the succeeding Government must be held duty bound to continue and carry on the unfinished job rather than putting a stop to the same." In AIR 1937 Privy Council p.27, it has been further held that: "In case where Government official duly competent and duly authorized in that behalf had arrived honestly at one decision, their successor-in-office after the decision has been acted upon and is in effective operation cannot purport to enter upon re-consideration of the matter at another in a totally different decision" 17. It was next contended by Mr. A.H. Naik, learned Advocate General, that mere submission of a Project Report does not entitle the petitioners for the allotment of the work. It was further stated that willingness of the petitioners to sign the agreement does not conclude the agreement without acceptance from the respondents and, thereafter, the agreement signed. In the absence of agreement executed between the parties after having finalized the terms and conditions, the petitioners were not entitled for the allotment of the work and cannot make any claim. In other words, without executing any agreement with the respondents, the petitioners executed the work at their own risk and cost. 18. In the absence of agreement executed between the parties after having finalized the terms and conditions, the petitioners were not entitled for the allotment of the work and cannot make any claim. In other words, without executing any agreement with the respondents, the petitioners executed the work at their own risk and cost. 18. In controverting the contention of the respondents, it was submitted by Mr. Verma, learned senior Advocate appearing for the petitioners, that even if agreement was not signed by the parties, the same is spelt out from the correspondence exchanged between the parties. In support of his assertion, Mr. Verma placed reliance on the decision of the Apex Court in case titled Rickmers Verwaltung GMBH v. Indian Oil Corporation Ltd., (1999) 1 SCC 1, in which it has been held as under: "An agreement, even if not signed by the parties, can be spelt out from correspondence exchanged between the parties. It is the duty of the court to construe correspondence with a view to arrive at a conclusion whether there was any meeting of mind between the parties, which could create a binding contract between them but the court is not empowered to create a contract for the parties by going outside the clear language used in the correspondence, except insofar as there are some appropriate implications of law to be drawn. Unless from the correspondence, it can unequivocally and clearly emerge that the parties were ad idem to the terms, it cannot be said that an agreement had come into existence between them through correspondence. The court is required to review what the parties wrote and how they acted and from that material to infer whether the intention as expressed in the correspondence was to bring into existence a mutually binding contract. The intention of the parties is to be gathered only from the expressions used in the correspondence and the meaning it conveys and in case it shows that there had been meeting of mind between the parties and they had actually reached an agreement upon all material terms, then and then alone can it be said that a binding contract was capable of being spelt out from the correspondence." 19. After referring to various documents and correspondence exchanged between the parties, Mr. After referring to various documents and correspondence exchanged between the parties, Mr. Verma reinforced his submission that a concluded, enforceable and binding contract came into existence between the parties in pursuance of which the petitioners started the work of renovation and modernization of the Canal Power House and reached a final stage of generation. His further submission is that though no agreement formally was signed between the parties, yet contemporaneous correspondence exchanged between them went to show that a binding contract came into existence between the parties. Even the fundamental terms and conditions settled by the respondents were fully agreed upon and fulfilled by the petitioners. The decision in regard to the finalization of the terms and conditions of the transfer of Canal Power House, Jammu was arrived at by the Committee constituted vide Government Order No. 35-PDD of 2002 dated 30-01-2002, and was stated to have agreed upon and fulfilled by the petitioners. The Power Purchase Agreement (PPA) vide communication dated 15-03-2002 was required to be drafted and further proceedings initiated by the Power Development Department. By the aforesaid communication, Power Development Department was also requested to sign the PPA with M/s Trehan Industries Corporation. This makes it abundantly clear that PPA was required to be drafted and executed by the respondents and signed with the petitioners by the respondents. The respondents were also required to implement the terms and conditions settled by the designated Committee in this behalf in letter and spirit. This fact has not been disputed by the learned Advocate General, Mr. Naik, during the course of argument when taken through the various correspondence that had taken place between the parties. The learned Advocate General, however, insisted on a stand that since there was no agreement executed between the parties, no legally enforceable right is conferred upon the petitioners to make a claim in respect of the work executed by them on the basis of the correspondence, as no binding contract came into existence between the parties. In this context, it is meaningful to point out that the intention exacted from the correspondence, which exchanged between the parties unequivocally brings into existence a mutually binding contract. It is the expression used in the writing/correspondence, which conveys the intention of the parties. In this context, it is meaningful to point out that the intention exacted from the correspondence, which exchanged between the parties unequivocally brings into existence a mutually binding contract. It is the expression used in the writing/correspondence, which conveys the intention of the parties. It further exhibits the meeting of the mind that they had actually reached at an agreement on all the terms and conditions settled by the designated Committee. In such circumstances, it cannot be said that the parties were only negotiating and had not reached an agreement. In the present case, the negotiations were completed, which gave rise to a binding contract irrespective of the fact that the agreement was not signed between the parties. The petitioners submitted DPR to the Government, which was further directed to be revised after the Power Development Department of the State had gone through the same in consultation with the Central Electricity Authority. The petitioners revised DPR in accord with the advice of the Power Development Department based on the comments and the observations made by the Central Electricity Authority. The possession of the Power House thereafter was handed over to the petitioners after preparing proper inventory of building and machinery evaluated by the Government of India approved valuers. The designated Committee met on 25th February, 2002 and formulated the terms and conditions for transfer of the Power House and asked the J&K SPDC to transfer the Power House to M/s Trehan Industries Pvt. Ltd. after preparing inventory. In the meanwhile, elections were announced and after the elections and change of the Government, the new government reviewed the progress on the Project by requiring the petitioners to submit the physical and financial progress report. The Power Minister, after visiting the spot, accompanied by officials of the Power Development Department regarding which a report was submitted by him with positive recommendations after assessing the entire work done on the Project and indicating that the Power House is complete in all respects and ready for generation of the power, stressed the need to finalize the agreement with the petitioners. All these facts when taken together in its cumulative, based on the contemporaneous correspondence exchanged between the parties, Mr. Verma submits, revealed that a binding agreement had come into existence through correspondence and the non-signing of the agreement, as asserted by the learned Advocate General, was of no consequence. According to Mr. All these facts when taken together in its cumulative, based on the contemporaneous correspondence exchanged between the parties, Mr. Verma submits, revealed that a binding agreement had come into existence through correspondence and the non-signing of the agreement, as asserted by the learned Advocate General, was of no consequence. According to Mr. Verma, the correspondence exchanged between the parties clearly establishes that there was meeting of mind and an agreement could be spelt out from the reading of such correspondence, the language used and the expression gathered therefrom. Mr. Verma, learned senior counsel for the petitioners, also submitted that as per the revised DPR, the Project had to be completed by July, 2003 and this being a time bound Project, the petitioners went the whole hog for the renovation and modernization of the Power House, even during the tenure of the present Government for a period of seven months to the knowledge of the functionaries and the officials of the State including the Power Development Department. It was further asserted that even the Principal Secretary to Government addressed a communication to the Chief Engineer assuring the availability of water supply for generation of power in Hydro-Electric Power House, which had become operational. In view of the fact established from the documents and correspondence that exchanged between the parties on record, it emerges unequivocally that the parties were ad idem to the terms and the agreement came into existence through correspondence. The contention of the learned Advocate General on this count also is bereft of any substance and does not merit acceptance. Agreement, even if not signed by the parties, is elicited unmistakably from the correspondence made between the parties. The legal position, therefore, emerging out from the above is that it is not open to the respondents-State to take the refuge under the pretext of non-signing of the formal document/agreement in presence of unequivocal documentary evidence reflecting the decision carrying the full traits of an agreement. 20. Another limb of argument projected by Mr. The legal position, therefore, emerging out from the above is that it is not open to the respondents-State to take the refuge under the pretext of non-signing of the formal document/agreement in presence of unequivocal documentary evidence reflecting the decision carrying the full traits of an agreement. 20. Another limb of argument projected by Mr. Verma, petitioners advocate, is that after the Canal Power Project was handed over in pursuance of the conscious decision of the Government, the petitioners had taken various steps in its renovation and modernization, and spent nearly five crores of rupees and when reached the final stage of generation of electricity, the Power House has been ordered to be taken back by the J&K SPDC without adhering to the basic principles of natural justice, equity and fair play in giving notice of show cause against the aforesaid order to the petitioners and affording reasonable opportunity of being heard. It is further submitted that the impugned decision is violative of audi alteram partem rule and is liable to be quashed on this ground alone. On going through the record produced in the case, it is clearly elicited that after the Power Project was handed over for rebuilding and generation of the power, constant monitoring in regard to the progress of the work, financial expenditure, status report during the intervening period was done initially by the earlier government and, thereafter, the new Government for a period of seven months till it reached the final stage of its operation. Even the Power Minister along with the team of the top officials of the power Development Corporation, viz., Secretary, Power Development Department, Chief Engineer and Executive Engineer, visited the Canal Power House, and reported back to the Cabinet that the Power House has been made operational and nearly Rupees two crores have already been spent on its modernization, and renovation work is complete and the Power Project is ready for generation. The report of the Power Minister manifestly depicts the ground realities after visiting the Power House and runs counter to the plea taken by the respondents that only minor work has been done by the petitioners after defunct Power House was handed over to them for the avowed purpose. The Power Minister further recommended that the Memorandum submitted by the Power Development Department requires to be considered and approved. The Power Minister further recommended that the Memorandum submitted by the Power Development Department requires to be considered and approved. This being the factual position, indisputably elicited from the record, Mr. Verma submitted that there was no justifiable reason to take a decision against the petitioners and directing the taking over of the Power House by the J&K SPDC without a show cause notice and providing proper opportunity of being heard to the petitioners. Further submission of Mr. Verma is that much emphasis has been laid by the learned Advocate General that the Power House has been handed over without adopting the procedural and codal formalities, but no where it is spelt out from the counter or borne out from the record as what was the proper procedure, which has not been followed and what were the codal formalities, which have not been adhered to. It is, however, significant to point out that even the Advocate General was fair enough in his submission that neither inviting of the tenders nor going for auction was mandatory and that the contract could be given through private negotiation. 21. It is, however, significant to point out that even the Advocate General was fair enough in his submission that neither inviting of the tenders nor going for auction was mandatory and that the contract could be given through private negotiation. 21. In regard to the violation of principles of natural justice by the respondents in taking the impugned decision followed by impugned orders taking over the possession of the Power House from the petitioners after it is stated to have been completed and ready for generation of electricity, the Apex Court in a similar case titled Bhoruka Power Corporation Ltd. v. State of Haryana and others, AIR 2000 P&H 245, held as under: "..It is a settled proposition of law that after having laid down the standard for judging its conduct, a public authority cannot deviate from the said standard." "An executive agency must be rigorously held to be standards by which is professes its action to be judged." It has been further held as under: "In view of the fact that after the issuance of letters of intent, the petitioner had taken various steps for award of contract and had spent considerable amount and the official respondents didnt find anything wrong with PDR did create a legitimate expectation that in the absence of any adverse factor, the contract would be awarded to it." "Before ordering cancellation of allocation of site, the State Government was under an obligation to give notice and opportunity of hearing." "Impugned decision is violative of Rule of Audi Alterm Partem." Similarly, in case titled The Board of High School and Intermediate Education, U.P. and others v. Kumari Chittra Srivastava and others, AIR 1970 SC 1039, the Apex Court held that: "Whether a duty arises in a particular case to issue a show cause notice before inflicting a penalty does not depend on the authoritys satisfaction that the person to be penalized has no defence, but on the nature of orders proposed to be passed" In the like manner, in case C.B. Gautam v. Union of India and others, (1993) 1 SCC 78, it has been held by the Apex Court that: "The persons who are likely to be affected by the proposed action must be afforded an opportunity of being heard as to why that action should not be taken" "Courts have generally read into the provisions of the relevant sections, a requirement of giving a reasonable opportunity of being heard before an order is made which would have adverse civil consequences for the parties affected." Apex Court, in case titled M/s Style (Dress Land) v. Union Territory Chandigarh and another, AIR 1999 SC 3678, also held as under: "Even administrative orders are required to be made in a manner in consonance with the rules of natural justice, when they effect the rights of the citizens." "The court can strike down an executive order, if it finds the reasons assigned were irrelevant and extraneous." "Every State action, in order to survive, must not be susceptible to revive of arbitrariness." Further, the Apex Court, in S.L. Kapoor v. Jagmohan and others, AIR 1981 SC 136, has held that: "An opportunity should be given to the committee before an order of supersession is passed."` "The requirements of natural justice are met only if opportunity to represent is given in view of proposed action." "The demands of natural justice are not met even if the very person proceeded against has furnished the information on which the action is based." Further, it has been held by the Apex Court as under: "The person proceeded against must know that he is being required to meet the allegations which might lead to a certain action being taken against him." "The non-observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary." Even this Court, in Major Romesh Chander v. G.O.C. Northern Command and Others, 1976 JKLR 439, has held as under: "Compliance with the rules of natural justice is the requirement of fair play and justice." "No decision shall be taken and an order passed to prejudice of any person unless a reasonable opportunity is afforded to him to be heard in the matter and where this rule is ignored, such decision or order is a nullity." "Rules of natural justice are handmade of justice and fair play and their object is to prevent miscarriage of justice and in that view compliance with those rules become an essential rule to be followed by the authorities while passing such like orders." Further this Court, in case titled Shri Hardyal and anr. v. State of J&K and Anr., 1976 JKLR 509, has held in the following manner: "The compliance with rules of natural justice is required not only in cases of quasi judicial orders but also for administrative orders from which civil consequences or penal consequences flow," "The objective behind the compliance with the rules of natural justice is to prevent mis-carriage of justice and arbitrariness as well as to secure a fair and impartial order from the concerned authorities." 22. The net deduction from the ratio of the aforesaid decisions is that it is a fundamental requirement of law that the doctrine of natural justice be complied with and the same has, as a matter of fact, turned out to be an integral part of administrative jurisprudence. Even the judicial process itself embraces a fair and reasonable opportunity to defend though the same is dependent upon the facts and circumstances of each individual case. The doctrine of natural justice is not only to secure of justice, but also to prevent miscarriage of justice. Over the years, there has been a steady refinement as regards the doctrine of natural justice is concerned. However, the totality of the situation ought to be taken note of and if on examination of such totality, it comes to light that the Government action suffers from the vice of non-compliance with the doctrine, the law courts ought to set right the wrong inflicted upon the person concerned and to do so would be a plain exercise of judicial power. As a matter of fact, the doctrine is now termed as a synonym of fairness in the concept of justice and stands as the most-accepted methodology of the governmental action. In the present case, the respondents in admitting the final stage to which the Project has reached and then to say that the petitioners are not authorized to carry out the work and the execution of the work is at their own risk and responsibility, is wholly unfair and against the basic principles of law and natural justice. The respondents are legally estopped from doing so on account of doctrine of estoppel. The plea taken and urged by the respondents is contrary to the record, their own decisions, which, thereafter, were given effect to by the functionaries and instrumentalities of the State Government. The respondents are legally estopped from doing so on account of doctrine of estoppel. The plea taken and urged by the respondents is contrary to the record, their own decisions, which, thereafter, were given effect to by the functionaries and instrumentalities of the State Government. Thus, the Government having allowed the progress of the renovation and modernization of the Power House and authorized it to reach to the stage of final operation of generation of electricity, as is even evident from the report of the authority not less than the Power Minister after visiting the spot along with the top officers, cannot, at random and suddenly, take a `U turn and say that the work was executed by the petitioners at their own risk and cost, and take a decision followed by the impugned orders for its taking over by the J&K SPDC, which clearly amounts to a breach of solemn promise or undertaking to the prejudice of the other party, which acted and put itself in a disadvantageous position. In the backdrop of these facts and situation, the principle of promissory estoppel would come into play by estopping the respondents from backing out from their promise arising out of their solemn promise unfolded in their action and revealed from the record. 23. In the backdrop of these facts and situation, the principle of promissory estoppel would come into play by estopping the respondents from backing out from their promise arising out of their solemn promise unfolded in their action and revealed from the record. 23. The Apex Court in its landmark judgment on the subject in case titled Ramana Dayaram Shetty v. Airport Authority of India and others, AIR 1979 SC 1628, has held as under: "Executive authority must be rigorously held to be standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them." "It is indeed unthinkable that in a democracy governed by the rule of law, the executive Government or any of its officers should possess arbitrary power over the interest of the individual." "Every action of the Government must be informed with reason and should be free from arbitrariness." Further, the Apex Court held in the case that: "The principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or non-arbitrariness is protected by Article 14 and it must characterize every state action, whether it be under authority of law or in exercise of executive power without making of law." In case titled Gujarat State Financial Corporation v. M/s Lotus Hotels Pvt. Ltd., (1983) 3 SCC 379, the Apex Court has held as under: "Acting on the promise of the appellant evidenced by documents, the respondent proceeded to suffer further liabilities to implement and execute the project. In the backdrop of this incontrovertible fact situation, the principle of promissory estoppel would come into play." "The true principle of promissory estoppel, therefore, seems to be that where one party has by his words of conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future knowing or intending that it would be acted upon by other party to whom the promise is made and it is in fact so acted upon by the other party." "The promise would be binding on the party making it and he would not be entitled to go back upon it." In Tapri Oil Industries and another etc. v. State of Maharashtra and others, AIR 1984 Bom. v. State of Maharashtra and others, AIR 1984 Bom. 161, the Court held that: "The jurisdiction of the High Court under Article 226 of the Constitution is not restricted only to the review of the administrative actions and executive decisions of the State and in the light of the extended applicability of the doctrine of promissory estoppel of which the whole object is to see that the Government strikes to its promise and abides by it." Further, the Court held that: "The law may, therefore, now be taken to be sensed as a result of this decision (Anglo Afghan Agencies Case) that where the Government makes a promise knowing or intending that it would be acted on by the promisee and in fact the promisee acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government." The Apex Court in case titled Union of India and others v. Godfrey Philips India Ltd., (1985) 4 SCC 369, has held as under: "There can, therefore, be no doubt that the doctrine of promissory estoppel is applicable against the Government in the exercise of its governmental, public or executive functions the doctrine of executive necessity or freedom of future executive action cannot be invoked to defeat the applicability of the doctrine of promissory estoppel." "The doctrine of Promissory estoppel represents a principle evolved by equity to avoid injustice and though commonly named promissory estoppel, it is neither in a realm of contract nor in the realm of estoppel." In case titled Pawan Alloys & Casting Pvt. Ltd. v. U.P. State Electricity Board and others, reported as (1997) 7 SCC 251, it has been held by the Apex Court that: "If the state or a statutory authority or an executive authority of the state or its limb like the State Electricity Board covered by Article 12 functioning on behalf of the state in exercise of its legally permissible powers has held out any promise to a party, who relying on the same has changed its position not necessarily to its detriment and if this promise does not offend any provision of law or does not fetter any legislative or quasi-legislative power inhering in the promissor, or is not otherwise opposed to public policy then on the principle of promissory estoppel, the promissor can be pinned down to the promise offered by it by way of representation containing such promise for the benefit of the promisee." Again, in case titled Mahabir Auto Stores and others v. Indian Oil Corporation, (1990) 3 SCC 752, the Apex Court has held in the following terms: "Informing and taking into confidence affected party is essential requirement of rule of natural justice even where there is no duty to hear or give reasons for the adverse action." "The actions of the State or its instrumentalities engaged in commercial transactions must be reasonable, fair and just even where no formal contract entered into." "States action under Article 298 to enter or not into a contract is open to challenge on ground of violation of Article 14." The Apex Court in case titled Netai Bag and others v. State of West Bengal and others, (2000) 8 SCC 262, has held that: Further, the apex Court in case reported as Shalebha Vidyarki v. State of U.P., in (1991) 1 SCC 212, has held that: "Every arbitrary state action is open to challenge on ground of violation of Article 14." "Action must be based on discernible and reasonable principle." "State action uninformed by reason is arbitrary." "Non-arbitrariness is a necessary concomitant of rule of law and is in substance fair play in action." 24. What indisputably emerges from the aforesaid facts and circumstances is that the Government having, after taken a conscious decision, handed over the Canal Power Project to the petitioners for renovation, modernization and generation of power and the petitioners having taken various steps for completion of its ultimate object, the respondents by their own conduct are estopped in taking a view contrary to the one taken earlier and are, thus, not legally justified in passing the impugned order. The principles of natural justice have also been seemingly violated in this case, as, on the one hand, the respondents are fully aware and even monitoring the progress of the work and its financial input in calling the status report and allowing the Canal Power House to reach the final stage for commencement of generation of electricity and, on the other hand, directing its taking over by the J&K SPDC in passing the impugned order. The report of the Power Minister found in the record produced by the respondents, submitted after visiting the spot along with the top officials of the Power Development Department and the petitioner as well, reveals that the renovation work has been completed, but, for the connectivity with the receiving Station, it is ready for generation of power and the Power Minister recommended that the Memorandum of Power Development Department be considered and approved. The decision of the Government taken earlier, the handing over of the Power Project by the officials of the Government in giving effect to such decision; and, thereafter, contemporaneous correspondence exchanged between the parties, the intention of the parties gathered unequivocally and the expression used therein and how the parties acted there upon, borne out from the record of the respondents, clearly establish all essential requisite traits of an agreement and consensus ad idem spelt out therefrom notwithstanding the agreement is not signed between the parties. Thus, it cannot be said by any stretch of reasoning that it lacks any procedural/codal formalities. In the wake of the aforesaid, I am unable to record my concurrence with the submissions made by Mr. A.H. Naik, Advocate General appearing for the respondents. 25. Thus, it cannot be said by any stretch of reasoning that it lacks any procedural/codal formalities. In the wake of the aforesaid, I am unable to record my concurrence with the submissions made by Mr. A.H. Naik, Advocate General appearing for the respondents. 25. Having discussed the issues as above in the contextual facts, I do feel it expedient to record that the entire chain of events smacks of being reasonable, fair and rational and adaptation of a method in taking the impugned decision and followed action is unknown to law in hottest of haste, can be described to be wholly and totally biased and in violation of rule of audi alteram partem. 26. I am, thus, inclined to allow the writ petition and quash the impugned Cabinet Decision No. 90/6 dated 19-05-2003 followed by order dated 21-05-2003 and all other consequential orders based upon the aforesaid decision. Respondents are further commanded and directed to give effect to orders No. 34-PDD of 2002 dated 30-1-2002 and No. 35-PDD of 2002 dated 30-1-2002 and consequent decision of the designated Committee on negotiated terms and conditions in this behalf, based upon the aforesaid orders, reflected in communication dated 15-03-2002 addressed to the Development Commissioner, Power, J&K, by the Special Secretary to Government, Power Development Department, pertaining to taking steps for the execution and signing of the P.P.A. with the petitioners on the terms and conditions finalized and settled in this behalf by the High Power Committee. 27. There shall be no order as to costs.