1. (i) M/s Sawalkote Prosjektutvikling AS, a Company incorporated under the Norwegian Companies Registration Act, (ii) M/s Hindustan Construction Company, registered under the Companies Act, 1926 and (iii) M/s Ozaltin Construction Trade and Industry Company, Inc. Incorporated in Turkey, the members of a Consortium called `Sawalkote Consortium have filed this Writ Petition seeking issuance of a Writ in the nature of Certiorari, quashing and setting aside Government Order No. 212-PDD of 2006 dated 21.11.2006 whereby superseding Government Order No. 366-PDD of 2005 dated 21.12.2005 and Addendum thereto issued vide No. PDD/IV/38/2003 dated 04.04.2006, the Government of Jammu and Kashmir ordered implementation of the Sawalkote Hydro Electric Project through the process of Competitive Bidding, as per Government of India Guidelines, on the subject, besides a Writ-Injunction against the State of Jammu and Kashmir and its State Power Development Corporation to refrain from acting upon in any manner in furtherance to Government Order No. 212-PDD of 2006 dated 21.11.2006, (which shall hereinafter be referred as the "Impugned Government Order", for short.) 2. Petitioner No.1 is stated to be a Special Purpose Company established by NCC International for the sole purpose of undertaking the Sawalkote Project and Construction Contract in co-operation with the other members of the Sawalkote Consortium. Petitioner No.2 is a Company registered under the Companies Act, 1926 and is engaged in the Construction of major Civil Engineering Projects such as Hydel Transportation, Public Health etc., and Petitioner No.3, a Construction Company, registered in Turkey, is stated to be the World Leader in the Construction of Rolled Compact Concrete (RCC). SUBJECT MATTER OF DISPUTE 3. The subject matter of dispute in the Writ Petition is the Sawalkote Hydro Electric Project, a run-off-river Project on the river Chenab, located upstream of the already commissioned Salal Hydro Electric Project and downstream of the Baglihar Hydro Electric Project, which the State of Jammu and Kashmir and its State Power Development Corporation want to implement through the process of Competitive Bidding, as per the guidelines of the Government of India, whereas the petitioners seek quashing of Government Order No. 212-PDD of 2006 dated 21.11.2006, thereby requiring implementation of the Project under Government Order No. 366-PDD of 2005 dated 21.12.2005 and Addendum issued thereto vide No. PDD/IV/38/2003 dated 04.04.2006. Government Order No. 212-PDD of 2006 dated 21.11.2006, the subject matter of dispute, is reproduced hereunder for reference: "Government of Jammu and Kashmir Civil Sectt: Power Development Department Subject: Implementation of Sawalakote HEP. Reference: Cabinet Decision No. 295/15 dated 15.11.2006. Government Order No: 212-PDD of 2006 Dated : 21.11.2006. In supersession of the Government Order No. 366-PDD of 2005 dated: 21.12.2005 and subsequent addendum to the same order issued vide No. PDD/IV/38/2003 dated 4.4.2006, it is hereby ordered that the Sawalakote Hydro Electric Project will be implemented through a process of Competitive Bidding as per Guidelines of the Government of India on the subject. By order of the Government of Jammu & Kashmir. Sd/- Principal Secretary to Government Power Development Department No. PDD/IV/38/243 Dated: 21.11.2006" FACTS 4. The facts, along with some dates, leading to the filing of the Writ Petition, may be stated thus: The State Power Development Corporation Limited, hereinafter be referred as the "State Corporation", for short, invited Limited International Competitive Bidding, on 07.12.1997 07.12.1997, for Engineering, Procurement, and Construction Contract "EPC", for short, for the project, which at that stage was for 600 Mega Watts. Out of the six contractors, who had been invited to submit their preliminary proposals to the State Corporation for the EPC Contract, only two submitted their bids. On evaluation, the bid of Statkraft Anlegg & Kvaerner Energy (SA/KE), was found to be attractive. Respondent No.2, accordingly invited petitioners SA/KE to submit proposal for execution of the Project, on the basis of financing up to 85% of the Project Cost. Based on the preliminary proposal of SA/ KE, respondent No.2 entered into a Memorandum of Understanding, "MOU", for short, dated 26.07.1999 July 26, 1999 with SA/KE. Kvaerner Energy (KE) left the Consortium after its acquisition by General Electric. M/S Hochtief Aktiengesellshaft Germany "Hochtief", for short, joined the project in the year 2000. Statkraft Anlegg (SA) was acquired by M/S NCC International AS, Norway (NCC) and was renamed as NCC International. The Sawalkote Consortium developed detailed Project Report and submitted its EPC offer to respondent No.2, on December 01, 2000, which, on evaluation by Lahmeyer International, on behalf of respondent No.2-the State Corporation was found to be in Internationally competetive price levels. Statkraft Anlegg (SA) was acquired by M/S NCC International AS, Norway (NCC) and was renamed as NCC International. The Sawalkote Consortium developed detailed Project Report and submitted its EPC offer to respondent No.2, on December 01, 2000, which, on evaluation by Lahmeyer International, on behalf of respondent No.2-the State Corporation was found to be in Internationally competetive price levels. Based on the DPR of the Sawalkote Consortium, M/s Jai Parkash Industries made its offer for construction of the project which was found higher by INR 240 Crores, as compared to the offer of the Sawalkote Consortium. Respondent No.2, therefore, decided to accept the offer and accordingly entered into EPC Contract with the Sawalkote Consortium. The Ministry of Power and Energy, Government of India, had, in the meanwhile, informed respondent No.2 that in respect of the States, other than Jammu and Kashmir, Techno-Economic Clearance by the Central Electricity Authority under Section 30 of the Electricity Supply Act, 1948, was a mandatory requirement. The provisions of the Electricity Supply Act, being not applicable to the State of Jammu and Kashmir, the State would, therefore, have its own frame work and mechanism of due diligence for appraisal and investment approval of Power Projects. It was indicated that even when there was no legal impediment for the State of Jammu and Kashmir to award the works of the Sawalkote Hydro Electric Project on MOU basis to the Norwegian Consortium, the paramount consideration should be reasonableness of the cost and tariff and the manner in which the contingent liability had to be discharged. The award of work under the competitive mechanism enhances transparency. The Government of Jammu and Kashmir was, therefore, required to ensure that guarantee by the Government of Jammu and Kashmir may not impose any liability on the Government of India in the present and at a future date. Respondent No.2 thereafter accepted the offer of the Sawalkote Consortium and signed the EPC Contract on 21.04.2001, which stipulated the rights and obligations of the parties in execution of the Project. Lahmeyer International, which had assisted the State Corporation, in this behalf, too witnessed the Contract Agreement. The petitioners, assisted respondent No.2 in preparation of approvals and meetings with various Banks for negotiations to raise funds between April 02, 2001 to July 02, 2003. Lahmeyer International, which had assisted the State Corporation, in this behalf, too witnessed the Contract Agreement. The petitioners, assisted respondent No.2 in preparation of approvals and meetings with various Banks for negotiations to raise funds between April 02, 2001 to July 02, 2003. It was during this process that the Power Finance Corporation "PFC", for short, a public financial institution, committed to the integrated development of the Power and associated sectors, expressed its views for reduction of "Foreign Currency Exchange Risk" and also of enhancing the capacity of Sawalkote Hydro Electric Project from 600 MWs to 1200 MWs, to achieve Cost efficiency. The petitioners implemented the recommendations of the PFC by indianising the Consortium and revising the detailed project reports for enhanced capacity of Sawalkote Hydro Electric Project to achieve cost efficiency. The State Corporation, approached the Central Electricity Authority "CEA", for short, for technical appraisal of the Project Report along with Contract Documents and the DPR Report prepared by the petitioners. NCC AB, a member of the Sawalkote Consortium, opting henceforth to concentrate its activities in the home market only, however, decided to undertake the Sawalkote Project, through a Special Purpose Vehicle, named Sawalkote Prosjektutvikling AS "SPAS", for short, in February 2004. Hochtief too left the project around September, 2004. The State of Jammu and Kashmir, constituted a High Level Sawalkote Committee, headed by its Economic Advisor, to look into all aspects/issues relating to the Project. The Committee held several meetings with the petitioners, inter alia, requesting the Consortium to explore the possibility of reduction in the project cost and Indianisation of the Consortium to reduce the Foreign Currency Risk. Accordingly, M/s Hindustan Construction Company, one of Indias leading Civil Contractors, specialized in Hydro Power, and M/S Ozaltin Construction Trade and Industry Company, from Turkey, World Leader in Roller Compacted Dam Construction, were chosen as Consortium partners in place of Hochtief, to Indianise and reduce the Euro Exchange Risk on the Project. It was in the above backdrop that the Writ Petitioners came to be constituted as Sawalkote Consortium. The above referred Sawalkote Committee, after holding various meetings with the petitioners and respondent Nos. 1 & 2 decided that all the conditions of EPC Contract of April 21, 2001 would remain as it is, except the project capacity, which shall be raised from 600 MWs to 1200 MWs and the cost of the project would be Euro 750 Millions. The above referred Sawalkote Committee, after holding various meetings with the petitioners and respondent Nos. 1 & 2 decided that all the conditions of EPC Contract of April 21, 2001 would remain as it is, except the project capacity, which shall be raised from 600 MWs to 1200 MWs and the cost of the project would be Euro 750 Millions. The State Corporation, in its 42nd Board Meeting, accepted the recommendations of the Sawalkote High Power Committee desiring appointment of Financial and Legal Consultants of repute for updating Legal and Contract documentation. The matter was, therefore, placed before State Cabinet which accorded its approval for implementation of the Project by the petitioners vide its decision of December 19, 2005, which was incorporated in Government Order No. 366-PDD of 2005 dated 21.12.2005.An Addendum issued on April 04, 2006, to this Government Order clarified that the escalation would not apply to the agreed EPC contract amount. The detailed Project Report was prepared by the petitioners-Consortium for the enhanced capacity of the Project, which was forwarded by respondent No.2 to the CEA which suggested revision and consolidation of the DPR, that was done by the petitioners. The petitioners-Consortium remained in communication with respondent No.2 and CEA clarifying the technical and financial queries. A meeting in this respect was called by the CEA in October, 2006 where respondent No.2, assisted by the petitioners was required to make a presentation. The respondents are alleged by the petitioners to have last minute, postponed the meeting and thereafter no further date was fixed for the purpose. It was around October 19, 2006 that a Cabinet Sub-Committee was constituted by the State of Jammu and Kashmir, to look into various aspects of the Sawalkote Hydro Electric Project. The petitioners wrote to respondent No.1, offering their assistance to the Sub-Committee with respect to any factual information that may be required relating to the Project Development Contract, Consortium Structure etc. The respondents, however, did not respond to the petitioners initiative. A News Item thereafter appeared in Daily Excelsior on 16.11.2006 that the State of Jammu and Kashmir, pursuant to the Report of the Cabinet Sub-Committee, had cancelled the petitioners contract with respect to Sawalkote Project and decided to float Global Tenders, inviting further bids. This led the petitioners to approach this Court questioning the State action. PETITIONERS CASE 5. A News Item thereafter appeared in Daily Excelsior on 16.11.2006 that the State of Jammu and Kashmir, pursuant to the Report of the Cabinet Sub-Committee, had cancelled the petitioners contract with respect to Sawalkote Project and decided to float Global Tenders, inviting further bids. This led the petitioners to approach this Court questioning the State action. PETITIONERS CASE 5. The case set up by the petitioners, in their Amended Writ Petition, questioning the State of Jammu and Kashmirs action of directing the implementation of the Sawalkote Hydro Electric Project, by having resort to the process of Competitive Bidding, as per Government of India guidelines, superseding its earlier Government Order No. 366-PDD of 2005 dated 21.12.2005 and subsequent Addendum thereto issued on April 01, 2006, may be summarized thus:- i. The petitioners had invested considerable amount of Money, Time and Efforts, for more than seven years into the Project, preparing, inter alia, the Project Reports and various other documents, to be submitted by respondent No.2 in furtherance of the execution of the Project, besides holding and assisting respondent No.2 in taking steps to ensure the Financial Closure, to facilitate work on the Project; they were, therefore, entitled, as of right, to be provided opportunity of hearing by the Cabinet Sub-Committee and the State Government before passing order terminating their seven years long arrangement with the respondents which had fructified into a Contract. Omission of the respondents to provide such hearing rendered their action arbitrary and illegal, besides being violative of the principles of Natural justice. ii. The State action, in terminating the petitioners arrangement, on the ground of its having been devised, without resorting to the process of Competitive Bidding, in terms of the Competitive Bidding Guidelines of the Ministry of Power, Government of India, requiring Competitive Bidding for Power Projects, was unsustainable because the Guidelines had been erroneously construed applicable to the petitioners EPC Contract, in that, the Guidelines would apply only to Independent Power Projects, "IPP", for short, and not to the Projects owned by the State and its Authorities. iii. The State action was arbitrary and unfair, based on undue haste and considerations irrelevant. iv. iii. The State action was arbitrary and unfair, based on undue haste and considerations irrelevant. iv. The Guidelines of Government of India regarding competitive bidding, even otherwise, stood complied with in case of the petitioners, who had been selected from amongst the bidders, who were invited by respondent No.2 for the EPC Contract and there was thus no justification for the State to cancel the arrangement. v. States decision to go in for Global Tenders was not, in public interest as the Project, on its accepted cost, would be more economical Project for the State of Jammu and Kashmir. RESPONDENTS DEFENCE TO THE PETITIONERS CASE 6. v. States decision to go in for Global Tenders was not, in public interest as the Project, on its accepted cost, would be more economical Project for the State of Jammu and Kashmir. RESPONDENTS DEFENCE TO THE PETITIONERS CASE 6. Contesting the petitioners claims, and supporting the impugned order on facts and law, the respondents have questioned the merits of the petitioners claim and the sustainability of their Writ Petition, inter-alia, on the following grounds : (i) it raises several disputed questions of fact, which may not be gone into by the Court in exercise of its extraordinary Civil Writ Jurisdiction; (ii) the issues raised by the petitioners, fall in the realm of Private Law field of Contractual Disputes, adjudication whereof may not be permissible by the Court, particularly when no Concluded Contract had come into existence, between the parties, before the issuance of the impugned Government Order; (iii) even if one were to say that, any Concluded Contract had come into being between the parties, it was a Contingent Contract, dependent on the effective Financial Closure, which had never taken place and could not, even otherwise, in the circumstances, take place, and the petitioners had thus no right to seek its implementation; (iv) in any case the attainment of the Financial Closure required to be effected within 12 months from the date of the signing of MOU, having not taken place, the Contract, pressed into service by the petitioners, had become void, in terms of Section 35 of the Jammu and Kashmir Contract Act, 1977, which was therefore unenforceable; (v) alternative and equally efficacious remedy of Specific Performance of Contract and Compensation, being available to the petitioners, they were disentitled to invoke the extra-ordinary jurisdiction of the High Court; (vi) the Ministry of Power, Government of India, having conveyed its emphatic -`No for financing of the Project by the Power Financing Corporation, the execution of the Project by the petitioners was an impossibility, And no directions as sought for by the petitioners against the respondents, may thus be warranted; (vii) the State of Jammu and Kashmir, in exercise of its executive power, had acted, in public interest, in issuing Govt. Order No. 212-PDD of 2006 dated 21-11-2006 directing imple-mentation of the Project by the process of competitive bidding as per Guidelines of the Government of India and had not acted in any way with undue haste or considerations irrelevant or unfairly, as alleged by the petitioners; (viii) there was no legal requirement of hearing the petitioners before resorting to the process of Competitive Bidding for the Project because no concluded Contract had been entered into by the respondents with the petitioners. The State action was not thus arbitrary, illegal, biased or unfair. (ix) doubts about the technical capacity, financial capacity, past experience and present engagement of SPAS having been expressed, the order impugned was justified in public interest as the adoption of Negotiation Route for implementa-tion of the Project lacked transparency. 7. Supporting their respective submissions, learned counsel for the parties, referred to various judgments of Honble Supreme Court of India, the High Courts of the Country and those delivered by the Foreign Courts, reference whereto shall be made, wherever necessary, during discussion of the issues canvassed at the Bar. ISSUE WHICH FALLS FOR RESOLUTION AT THE THRESHOLD 8. Before dealing with other issues raised at the Bar by learned counsel for the parties, I propose to deal first, the issue as to the maintainability or otherwise of the petitioners Writ Petition and in the event of the Writ Petition, found sustainable, whether the State action warrants Judicial Review, And if so, on what grounds, and whether or not such grounds exist in the present case. PETITIONERS COUNSELS SUBMISSIONS 9. Dr. A.M. Shingvi, learned Senior Advocate and Ms. PETITIONERS COUNSELS SUBMISSIONS 9. Dr. A.M. Shingvi, learned Senior Advocate and Ms. Ritu Bhalla, learned Advocate appearing with him, submitted that having worked with the respondents for seven long years, spending inter alia, time, efforts and money, taking all requisite steps, necessary for the implementation of the Project, on the basis of a duly executed Contract, followed by the Government Orders, admitting and acknowledging allotment of the EPC Contract for implementation of the Sawalkote Hydro Electric Project to them, the petitioners, were, as of right, entitled to be heard by the State-respondents before taking decision to go in for the process of fresh Competitive Bidding for implementation of the Project, in that, the petitioners could not be deprived of their right to implement the Sawalkote Hydro Electric Project without hearing them, because such a Course would be stark violation of the principles of Natural Justice rendering the exercise of executive power by the State, in exercise whereof it had so acted, violative of the provisions of Article 14 of the Constitution of India. According to the learned counsel, the issue of violation of the principles of Natural Justice by the respondents in terminating the arrangement which they had been carrying on with the petitioners for seven long years and the other issues revised in the case, would not fall in the realm of Private Law field, examination whereof may not be impermissible in exercise of the power of Judicial Review of the Court, and that the action of the respondents, which according to the learned counsel, was a result of undue haste and illegal exercise of executive power by the State, was required to be annulled additionally because it was unfair, malafide and actuated by irrelevant considerations. Learned Counsel placed reliance, inter alia, on S.R. Venkataraman v. Union of India, reported as (1979) 2 SCC, 491; State of Punjab v. Gurdial Singh, reported as (1980) 2 SCC, 471; Workmen v. Williamson Magor & Co. Ltd., reported as (1982) 1 SCC, 117; Mahabir Auto Stores & Ors. v. Indian Oil Corporation & Ors., reported as (1990) 3 SCC, 752; Kumari Shrilekha Vidyarthi & Ors. v. State of U.P & Ors., reported as (1991) 1 SCC, 212; Priyanka Overseas Pvt. Ltd. and anr. Ltd., reported as (1982) 1 SCC, 117; Mahabir Auto Stores & Ors. v. Indian Oil Corporation & Ors., reported as (1990) 3 SCC, 752; Kumari Shrilekha Vidyarthi & Ors. v. State of U.P & Ors., reported as (1991) 1 SCC, 212; Priyanka Overseas Pvt. Ltd. and anr. v. Union of India & ors., reported as 1991 Supp (1) SCC, 102; Tata Cellular v. Union of India, reported as (1994) 6 SCC, 651; LIC of India & anr. v. Consumer Education & Research Centre & Ors., reported as (1995) 5 SCC, 482; State of A.P v. Goverdhanlal Pitti, reported as (2003) 4 SCC, 739; ABL International Ltd. & another v. Export Credit Guarantee Corporation of India Ltd. & Ors., reported as (2004) 3 SCC, 553; R.S.Garg v. State of U.P, reported as (2006) 6 SCC 430 & Alghussein Establishment AND Eton College, 1 W.L.R, 587, to support his submission. SUBMISSIONS OF THE LEARNED ADVOCATES APPEARING FOR THE RESPONDENTS 10. M/s D.C.Raina & M.I.Qadiri, Learned Advocates General, along with the learned Advocate appearing for the Corporation, submitted that the issues projected by the petitioners in the Writ Petition, arise out of the Private Law Field and exercise of Extra Ordinary Jurisdiction being impermissible for adjudication of these issues, the petitioners Writ Petition was not maintainable. According to the learned counsel, the arrangement between the parties, being only a prelude to the contemplated Contract for implementation of the Sawalkote Hydro Electric Project, would not entitle them to any prior notice before termination of the prelude process and thus denying the violation of the principles of Natural Justice by the respondents. Learned counsel submitted that Financial Closure, sought to be achieved by the petitioners for finalization of the Contract, had become impossible because of refusal of the Government of India to stand guarantee to the Financial Institutions which had offered to fund the Project subject to the condition that the Government of India stood guarantee thereto, the State Government was within its power to terminate the arrangement with the petitioners, which had become incapable of execution. Defending the State action, learned counsel submitted that the State had not acted in any such manner which may be said to be arbitrary, unfair, malafide or with undue haste as projected by the petitioners, justifying Judicial Review. They have placed reliance on Kulchhinder Singh & Ors. Defending the State action, learned counsel submitted that the State had not acted in any such manner which may be said to be arbitrary, unfair, malafide or with undue haste as projected by the petitioners, justifying Judicial Review. They have placed reliance on Kulchhinder Singh & Ors. v. Hardayal Singh Brar & Ors., reported as (1976) 3 SCC, 828; G.B.Mahajan & Ors. v. The Jalgaon Municipal Council & Ors, reported as AIR 1991 SC, 1153; Rajasthan Cooperative Dairy Federation Ltd. v. Maha Laxmi Mingrate Marketing Service Pvt. Ltd. & ors., reported as (1996) 10 SCC, 405; Punjab Communications Ltd. v. Union of India and Ors, reported as AIR 1999 SC 1801 ; State of H.P v. Raja Mahendra Pal & Ors., reported as (1999) 4 SCC 43; State of Bihar v. Jain Plastics And Chemicals Ltd., reported as (2002) 1 SCC, 216; Orissa State Financial Corporation v. Narsingh Ch. Nayak & Ors., reported as (2003) 10 SCC, 261; National Textile Corpn. Ltd. & ors. v. Haribox Swalram & ors., reported as (2004) 9 SCC, 786; Binny Ltd. & anr. v. V.Sadasivan & Ors, reported as (2005) 6 SCC, 657; Dresser Rand S.A v. Bindal Agro Chem Ltd. & anr., reported as (2006) 1 SCC, 751; Kisan Sahkari Chini Mills Ltd. & Ors. v. Vardan Linkers and Ors., reported as AIR 2008 SC 2160 & Chaman Lal Singhal v. Haryana Urban Development Authority & Ors., reported as (2009) 4 SCC, 369, to support their submission. DISCUSSION 11. Before dealing with the formulated issue, regard needs to be had to the settled legal position regarding the reach of the jurisdiction of Judicial Review by the Courts empowered to issue prerogative Writs under Article 226 of the Constitution of India and Section 103 of the Constitution of Jammu and Kashmir, in contractual matters, on the basis of the judgments referred to by learned counsel for the parties. Reference needs to be made, in this behalf, to the decision of a three Judge Bench of Honble Supreme Court of India in Tata Cellular v. Union of India, reported as (1994) 6 SCC, 651, and the issues settled in Kisan Sahkari Chini Mills Ltd. & Ors. v. Vardan Linkers and Ors., reported as AIR 2008, SC, 2160, where, after going through the Indian and Foreign Case Law on the subject, the jurisdictional reach of Judicial Review by the Courts has been crystallized as follows:- "1. v. Vardan Linkers and Ors., reported as AIR 2008, SC, 2160, where, after going through the Indian and Foreign Case Law on the subject, the jurisdictional reach of Judicial Review by the Courts has been crystallized as follows:- "1. The modern trend points to judicial restraint in administrative action. 2. The Court does not sit as a Court of appeal, but merely reviews the manner in which the decision was made. 3. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted, it will be substituting its own decision, without the necessary expertise which itself may be fallible. 4. The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administra-tive sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness, but must be free from arbitrariness not affected by bias or actuated by malafides. 5. Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. 6. The remedies for a breach of contract being purely in the realm of contract are dealt with by Civil Courts. The Public Law remedy, by way of a Writ Petition under Article 226 of the Constitution of India, is not available to seek damages for breach of contract or specific performance of contract. However, where the contractual dispute has a Public Law element, the power of Judicial Review under Article 226 of the Constitution of India may be invoked. Ordinarily, the remedy available for a party complaining of breach of contract lies for seeking damages. He will be entitled to the relief of specific performance, if the contract is capable of being specifically enforced in law. In a Writ Petition, the focus shifts to the exercise of powers by the Authority. It should normally desist from giving any finding on disputed or complicated questions of fact as to whether there was a contract, and relegate the petitioner to the remedy of a Civil Suit. In a Writ Petition, the focus shifts to the exercise of powers by the Authority. It should normally desist from giving any finding on disputed or complicated questions of fact as to whether there was a contract, and relegate the petitioner to the remedy of a Civil Suit. Even in cases where the High Court finds that there was a valid contract, if the impugned administrative action by which the contract is cancelled, is not unreasonable or arbitrary, it should still refuse to interfere with the same, leaving the aggrieved party to work out his remedies in a Civil Court. In other words, when there is a contractual dispute with a Public Law element, and a party chooses the Public Law remedy by way of a Writ Petition instead of Private Law remedy of a Suit, he will not get a full-fledged adjudication of its contractual rights, but only a Judicial Review of the administrative action. The question whether there was a contract and whether there was a breach may, however, be examined incidentally, while considering the reasonableness of the administrative action. But, where the question whether there was a contract, is seriously disputed, the High Court cannot assume that there was a valid contract and on that basis, examine the validity of the administrative action." 12. In view of the above referred settled legal position, the jurisdiction of Judicial Review, may be considered, for its exercise in the case, only if, the State action was found to be arbitrary, affected by bias or actuated by malafides, for the merits of the decision taken by the State Government, may not be justiciable. The question whether or not the arrangement between the parties had fructified into a concluded Contract or was it only a prelude to a Contract, may also be not gone into by the Court, in that, these questions and issues like that, arise out of the Private Law Field and can be appropriately dealt with by the Civil Courts. The petitioners Writ Petition would thus be maintainable only to the extent it questions the State action as arbitrary, unfair, actuated by malafides and a result of undue haste, for this Court may not have jurisdiction to substitute its views, on the merits of the decision taken by the State Government in the facts and circumstances of the case. 13. The petitioners Writ Petition would thus be maintainable only to the extent it questions the State action as arbitrary, unfair, actuated by malafides and a result of undue haste, for this Court may not have jurisdiction to substitute its views, on the merits of the decision taken by the State Government in the facts and circumstances of the case. 13. I will, therefore, proceed to examine the petitioners challenge to the impugned Government Order, only to limited extent indicated heretofore, after referring to the terms and conditions appearing in the MOU, the Agreement entered into by the parties, Government Order No. 366-PDD of 2005 dated 21.12.2005 with Addendum thereto, the recommendations of the Cabinet Sub-Committee, and the documents connected therewith, on the basis whereof the impugned Government Order was issued. MEMORANDUM OF UNDERSTANDING "Sawalkot Hydroelectric Power Project Memorandum of Understanding, extended by mutual agreement. Memorandum of Understanding for implementation of the 600 MW Sawalkot Hydro Electric Project. This Memorandum of Understanding hereinafter referred to as MOU, is made this 26th day of July 1999 between: The Jammu and Kashmir Power Development Corporation, a statutory corporation hereinafter referred as (PDC) which expression shall unless repugnant to the context or meaning thereof, be deemed to include its successor and permitted assigns of the one part; and the Group of companies; Statkraft Anlegg as and Kvaerner Energy as represented by the Group Leader Statkraft Anlegg, hereinafter referred to as (SA/KE) which expression shall unless repugnant to the context of meaning thereof, be deemed to include its successors and permitted assigns of the other part, PDC and SA/KE are therein individually referred to as Parties. Now therefore this MOU between the Parties hereto witnesses as follows: Recitals: 1. Whereas PDC has conceived of and decided to set up a hydroelectric power project in the Doda District of Jammu and Kashmir with a capacity of 600 MW on the river Chenab (hereinafter referred to as the Project). 2. Whereas PDC had invited the submission of proposals to various groups of contractors, to submit to PDC, vide its letter-Ref. no. 7434-36 dated 07.12.97 and their subsequent letter dated 05.12.98 vide Ref. no. 904-06 to SA/KE for the execution of hydroelectric power project on turn key basis requested the contractors to make proposals to PDC on the basis of financing up to 85% of the project cost. 3. no. 7434-36 dated 07.12.97 and their subsequent letter dated 05.12.98 vide Ref. no. 904-06 to SA/KE for the execution of hydroelectric power project on turn key basis requested the contractors to make proposals to PDC on the basis of financing up to 85% of the project cost. 3. Whereas SA/KE has carried out an initial techno-economic study of the Project and based on the same, made a preliminary proposal including an estimate of the projected cost of the Project to PDC vide its letter dated 8th March, 1999. 4. Whereas based on the aforementioned preliminary proposal, PDC has decided to invite SA/KE to submit a further detailed offer which would enable the parties to decide upon a mutually acceptable project proposal. 5. Whereas PDC has the right and authority to negotiate and enter into a contract/contracts with SA/KE for implementation of the project on a turn-key basis and shall enter into such contracts on the basis of a comprehensive bankable and techno-economically feasible project report in the event that the SA/KE Offer meets criteria contained in this MOU, acceptable to PDC. 6. Whereas SA/KE has explored and found willingness among international financing institutions to arrange funds up to 85% of the cost for the project, based on J&K State Government guarantee arrangement. 7. Whereas the parties do hereby enter into this MOU with the aim of defining the most suitable procedure for fast and purposeful implementation of the Project. Understanding of the parties: a. SA/KE shall submit a detailed offer along with a comprehensive bankable and techno-economically feasible project report based on FIDIC terms and conditions adopted to local conditions to PDC with their co-operation within 12 months, hereinafter referred to as the (Offer), for the execution of the Project. The Offer shall include specification of land required for temporary and permanent works, Project layout, main technical features, basic technical specifications, quality assurance procedures, master time schedule and detailed price structures, means and pattern of financing and cost thereof. b. The offer shall state the price per MW installed and the specific energy cost based on the Turnkey project costs excluding costs associated with the Access Road, but including interest during construction. The completed cost shall not exceed Rs. 7.50 crores per MW, and is based on the exchange rate of Rs.42 to US Dollar 1. b. The offer shall state the price per MW installed and the specific energy cost based on the Turnkey project costs excluding costs associated with the Access Road, but including interest during construction. The completed cost shall not exceed Rs. 7.50 crores per MW, and is based on the exchange rate of Rs.42 to US Dollar 1. The indicative project cost would be the upper limit, and shall be reduced as a consequence of project optimization acceptable to the owner. The other cost component shall have to be fixed as per the formulae applicable in similar contracts in India and appropriate FIDIC guidelines. c. The master time table submitted with the Offer shall indicate that the overall schedule to commercial operation will not exceed 6= years. d. The offer shall also include draft contract document(s) and form the basis for further negotiations and actions by the Parties in relation to the Project, provided however that PDC will have no obligation to accept the contract documents in the form as presented in the Offer. e. SA/KE shall, along with the Offer, present a comprehensive financial package up to 85% of the total offer price, based on the existence of J&K State guarantee arrangement. f. PDC shall make available to SA/KE all further relevant data and information in the possession of PDC and that might become available to PDC in course of time provided that such information is not subject to confidentiality undertaking of PDC, PDC shall assist SA/KE in connection with site visits and other investigations for the Project, hereunder provide land access and necessary security arrangements for site investigations, if needed. g. PDC shall obtain before contract effective date all necessary and obligatory approvals and clearances from State and Central Government organizations that are necessary for the Project. h. SA/KE shall have the right to associate with and enter into agreement with any other company, individual or agency as may be deemed necessary for implementation of the Project, provided that such other company, individual or agency has a proven track record and the ability to carry out the tasks for which it is proposed to be engaged and in consultation with PDC. i. During the period of the Validity of MOU, PDC shall not enter into any negotiations with or invite any other company or group of companies to give any proposal with respect to the implementation of the Project. i. During the period of the Validity of MOU, PDC shall not enter into any negotiations with or invite any other company or group of companies to give any proposal with respect to the implementation of the Project. j. The SA/KE will bear the cost of the preparation of the bankable project report and no separate payment will be required to be made by PDC to SA/KE, if the project is awarded to them for implementation. However, if the project is abandoned, and/or nor proceeded with due to events outside the control of the parties and for no fault attributable to the SA/KE the amount actually incurred on the preparation of the BPR as verified by PDC will be reimbursable to SA/KE. Validity 1. The MOU shall become valid on the day of its signing by the parties and shall remain valid 12 months from the date of signing or until as and when the Parties agree to enter into definitive contract document(s) in relations to the Project, whichever is the earlier. The validity of the MOU may be extended or terminated by mutual agreement between the Parties. General Clauses 1. No modification, amendment or waiver of any provision of this MOU shall be effective unless such modification, amendment or waiver is approved in writing by each of the parties. 2. Nothing in this MOU shall constitute or be deemed to constitute a partnership between parties or confer on any party any authority to bind the other or to contract in the name of the other or to incur any liability or obligation on behalf of the other or shall be deemed to be the agent of the other in any way. 3. The rights and benefits under this MOU shall not be capable of assignment by SA/KE without the prior consent in writing of PDC. 4. This MOU shall be governed by the Laws of India as applicable to the State of Jammu & Kashmir. The Statkraft Anlegg and Kvaerner Energy Group, represented by the Group leader Statkraft Anlegg shall be jointly and severally responsible to the PDC for the purposeful implementation of the Project. The time of completion and quality of work shall be of the essence. In Witness whereof the Parties hereto have caused the MOU to be executed this 26th day of July, 1999. The time of completion and quality of work shall be of the essence. In Witness whereof the Parties hereto have caused the MOU to be executed this 26th day of July, 1999. For and on behalf of For and on behalf of J&K, PDC A) SA/KE Sd/- Sd/- J.A.Shahmir Henning Fjeldstad Managing Director EVP Statkraft Anlegg as Project Director SA/KE Sd/- K.K. Mukerji Project Co-ordinator SA/KE Witness B) Statkraft Anlegg ass Sd/- Arnfinn Hardersen Sd/- CEO & President A.R. Makroo Financial Analyst Sd/- G.A.Mukhtar C) Kvaerner Energy a.s Engineering Geologist Sd/- Trygve Haug Vice President Marketing & Sales." "Contract Agreement for the execution of the Sawalkot Hydroelectric Power Project In Jammu and Kashmir State (India) This Agreement is made on the 21st day of April 2001 Between The Jammu & Kashmir State Power Development Corporation Limited, a company, registered and existing under the Laws of India and having its registered office at Srinagar, Jammu and Kashmir India (hereinafter referred to as the `EMPLOYER which expression shall unless repugnant to the context or meaning thereof include its successors, administrators and assignees) of the ONE PART; AND The Sawalkote Consortium consisting of 1. NCC International AS, Lysakar Torg 8, N-1326 Lysakar, Norway. A Company existing under the Laws of Norway with its registered office located at 1326 Lysakar, Norway; and 2. HOCHTIEF Aktiengesellschaft, Opernplatz 2, D-45128 Essen Germany. A Company existing under the Laws of Germany with its registered office located at 45128 Essen, Germany, (hereinafter jointly referred to as the "CONTRACTOR" which expression shall unless repugnant to the context or meaning thereof, include its successors, administrators and assignees) of the SECOND PART. Whereas, the Employer proposes that the Works known as Sawalkote Hydroelectric Power Project should be designed, executed and completed by the Contractor and has accepted the Tender of the Contractor for the design, execution and completion of these works and remedying of any defects therein; and The Contractor undertakes to arrange 85% of the Total Project Cost comprising Engineering Procurement and Construction (EPC) cost, Interest During Construction (IDC), escalation including taxes and duties etc. at the most economical financing cost with least financial risk on the basis of J&K State Government Guarantee and guarantee of Indian financial institutions. at the most economical financing cost with least financial risk on the basis of J&K State Government Guarantee and guarantee of Indian financial institutions. Now, therefore, the Employer and the Contractor agree as follows: In this agreement words and expressions shall have the same meaning as assigned to them in the Conditions of Contract forming part of this Agreement. The following documents shall be deemed to form and be read and construed as part of this Agreement:- a. The Letter of Tender and appendix to the Letter of Tender; b. The Conditions of Contract and the Annexes A to E thereto; c. The Employers Requirements; d. The Schedules; e. The Contractors Proposal, comprising the Detailed Project Report with Annexure containing supplementary electrical and mechanical equipment data (DPR) and subsequent Addendum to the DPR (Clarification Documents); and f. Memorandum of Understanding between the Jammu and Kashmir State Power Development Corporation and SA/KE dated 26.7.1999. The aforesaid documents shall be taken as complementary and mutually explanatory, one of another, but should there be ambiguities or discrepancies, then the documents shall rule one above the other in the order in which they are set out above; provided, however, that the provisions of this agreement shall rule over the provisions of all other documents. The employer has accepted the Contractors Tender, after consultation the Accepted Contract Price is EURO 517,809,152.00 say EURO Five hundred and Seventeen million eight hundred and nine thousand one hundred and fifty two, and INR 9,861,156,480.00 say INR Nine thousand eight hundred and sixty one million one hundred and fifty six thousand four hundred and eighty. The Employer hereby covenants to pay the Contractor, in consideration of the design, execution and completion of the Works and the remedying of defects therein, the Contract price or such other sum as may become payable under the provisions of the Contract at the times and manner prescribed by the Contract. In consideration of Contract Price the Contractor hereby covenants with the employer to design, execute and complete the works and remedy any defects therein, in conformity with the provision of the Contract. In case the contract does not come into effect within 12 months from the date of signing of this agreement, the parties will meet and decide mutually about the further course of action. No liability shall accrue to either party prior to financial closure. In case the contract does not come into effect within 12 months from the date of signing of this agreement, the parties will meet and decide mutually about the further course of action. No liability shall accrue to either party prior to financial closure. It is further agreed by the parties that certain issues both part of and outside of this contract are to be respectively addressed at a later stage by mutual agreement or will probably be incorporated in this contract. These issues are listed in the Appendix to this Agreement. The Project shall be completed within 2373 days from the date of Order to commence, unless extended in accordance with the provisions of this Contract. The Employer will pay to the Contractor as per progress of the work and as may become payable in terms of the Contract at the times and in the manner prescribed in the Contract. The Agreement and Documents forming part of this Contract shall be construed and interpreted in accordance with, and governed by, the Laws in force in India. In Witness whereof the parties hereto have caused this Agreement to be executed the 21st of April, 2001. SIGNED BY SIGNED BY 1. Managing Director J&KSPDC 1.NCC International AS Sd/- Sd/- Name: A.M.Mattu Name: Paul Lodoen 2. Director J&KSPDC 2. HOCHTIEF Aktiengesellschaft Sd/- Sd/- Name: Ajit Kumar Name: Dr. Martin Rohr for and on behalf of the Employer for and on behalf of the Contractor in the presence of in the presence of : WITNESS WITNESS WITNESS Sd/- Sd/- Sd/- Name: G.Q.Wani Name: Dr. Volker Spork Name: Henning Fjeldstad Address: C/o J&KSPDC Address: Friedbergerstr. 173 Address: Lysaker Torg & D-61118 Bad N-1326 Lysaker Norway Vilbel Germany Name: A.R.Makroo Name: Robert Laird Name: Harald Wolf Address: C/o J&KSPDC Address: Friedbergerstr. Address: Opernplatz 2173 D-61118 Bad Vilbel D-45128 Essen Germany Germany" "Government of Jammu & Kashmir Power Development Department, Civil Secretariat, Jammu. Subject: Implementation of Sawalkote HEP. Reference: Cabinet Decision No. 11/3/2005 dated 19.12.2005 Government Order No: 366-PDD of 2005 Dated : 21.12.2005 Sanction is hereby accorded to the:- i. Implementation of Sawalkote Hydro electric Project of 1200 MW installed capacity through the consortium comprising M/s SPAS of Norway, M/s Ozaltin of Turkey and M/s HCC of India, at an EPC cost of 415 Million Euros and Rs.1926.25 crores, with an implementation period of 7 = years. This new cost will not be subject to any increase, including that on account of escalation. However, it can be subject to any reduction as may be agreed mutually amongst Power Finance Corporation (PFC), the Consortium and the JKSPDC. ii. Construction of 2-3 mini HEPs in the State by the Consortium up to 10 MW capacity free of cost to the State, to be started and completed during the construction period of the Sawlakote project; iii. Managing Director, Power Dev. Corporation approaching the National/International lending institutions for financing the project with the debt equity ratio of 70:30. iv. The State Government providing 30% of the project cost as equity out of which advance of 10% at financial closure and 10% at the start of construction to be provided to the contractors against Bank Guarantees. v. Engagement of a financial experts in JKSPDC for working out financing structure of the project and also to arrange an early financial closure after inviting bids from a short listed group of agencies/persons of repute in the field. vi. Engagement of a reputed national/international consultant by JKSPDC having specialization in contract law for examining and drawing of the contract documents. vii. The revised contract documents/ addendum to the contract dated 21st of April, 2001 to be signed after acceptance of the recommendations of the specialist to be engaged for the purpose of examining and drawing the contract documents by the Board of Directors of JKSPDC. viii. The performance of the contract under turn key arrangement to be guaranteed under the joint and several responsibility arrangement of the consortium, whereunder all the obligations as may accrue on account of consequences like non performance, inadequate performance, delayed performance etc. will be upon the consortium and not on any individual member of the consortium. ix. State Government approaching the Ministry of Power, Government of India for accord of mega status for the project. x. Incorporating a Special Purpose Vehicle (SPV) by JKSPDC for speedy implementation of the project. By Order of Government of Jammu & Kashmir. Sd/- (B.R.Kundal), IAS Financial Commissioner, Power Dev. Department, No: PDD/IV-38/2003 Dated: 21.12.2005" "Government of Jammu & Kashmir Civil Secretariat-Power Development Department. Subject: Implementation of Sawalkote Hydro Electric Project. ADDENDUM TO GOVERNMENT ORDER NO.366-PDD OF 2005 Dated: 21.12.2005. x. Incorporating a Special Purpose Vehicle (SPV) by JKSPDC for speedy implementation of the project. By Order of Government of Jammu & Kashmir. Sd/- (B.R.Kundal), IAS Financial Commissioner, Power Dev. Department, No: PDD/IV-38/2003 Dated: 21.12.2005" "Government of Jammu & Kashmir Civil Secretariat-Power Development Department. Subject: Implementation of Sawalkote Hydro Electric Project. ADDENDUM TO GOVERNMENT ORDER NO.366-PDD OF 2005 Dated: 21.12.2005. Para(i) of Government Order No. 366-PDD of 2005 dated 21.12.2005 issued under endorsement No. PDD/IV/38/2003 dated 21.12.2005 is further clarified as under: "Implementation of Sawalakote Hydro Electric Project of 1200 MW installed capacity at a project cost of Rs.7000 crores, with an implementation period of 7-1/2 (seven and a half) years. This new cost will not be subject to any increase including that on account of escalation. However, it can be subject to any reduction as may be agreed mutually amongst Power Finance Corporation (PFC), the Consortium and the J&K State Power Development Corporation (J&KSPDC). The Engineering, Procurement and Construction (EPC) cost of the project will be around 415 million Euros and Rs.1926.25 crores which may vary within the over all project cost of Rs.7000 crores." This shall deem to have been added to para (i) abinitio. By order of the Government of Jammu & Kashmir. Sd/- (Dr. Mandeep K.Bhandari) Additional Secretary to Government Power Development Department No.PDD/IV/38/2003 Dated- 04.04.2006" "Report of the Cabinet Sub-Committee for Sawalkote Hydro Electric Project constituted vide Government Order No. 1322-GAD of 2006 dated 19.10.2006. Government Order No: 1322-GAD of 2006 dated 19.10.2006 constituting the Cabinet Sub-Committee is attached as Annexure-A to this report. 2. The Cabinet Sub-Committee held a preliminary meeting on 13.11.2006. Minister for Health & Medical Education/Labour and Employment/ Ladakh Affairs (in chair), Minister for Agriculture, Sericulture, Cooperatives and Fisheries, Minister for Power and Minister for Consumer Affairs & PD and A&SH were present. After going through the background of the project, the Sub-Committee desired that all correspondence between J&K State Power Development Corporation and Central Agencies after December, 2005 may be placed before it for perusal. 3. The Cabinet Sub-Committee held a full meeting on 15.11.2006. It went into all aspects of the project including the processes preceding the recommendation that led to the issuance of Government Order No: 366-PDD of 2005 dated 21.12.2005 and Addendum to the said Government Order dated 4.4.2006. 3. The Cabinet Sub-Committee held a full meeting on 15.11.2006. It went into all aspects of the project including the processes preceding the recommendation that led to the issuance of Government Order No: 366-PDD of 2005 dated 21.12.2005 and Addendum to the said Government Order dated 4.4.2006. It also perused the correspondence entered into by J&K State Power Development Corporation with central agencies after the issuance of these orders. 4. The Cabinet Sub-Committee is of the unanimous view that since the Sawalkote Hydro Electric Project involves very significant public investment, it should be implemented in a manner that is seen to be transparent. The Sub-Committee noted the reservations expressed by Power Finance Corporation in July 2006 to the J&K Power Development Corporation in respect of Sawalkote HEP not being implemented as per Government of India guide-lines for competitive bidding and felt that such observations also support the Sub-Committees view. 5. In view of the above, the Cabinet Sub-Committee recommend that, in supercession of earlier Government orders referred supra, Sawalkote Hydro Electric Project should be implemented through a process of competitive bidding and that such procedures should conform to the Government of India guidelines on the subject. The committee feels that conformity with Government of India guidelines could better enable support from central agencies and financial institutions, which is essential keeping in view the magnitude of investment required. 6. In making the above recommendation, the Cabinet Sub-Committee took note of the fact that J&K State Power Development Corporation had intimated the Consortium comprising of SPAS, Ozaltin & HCC about the Governments earlier decision to implement the project through that Consortium. The Committee is, however, of the view that, having regard to the fact that the project has not achieved financial closure and no formal agreement/contract has been entered into with this Consortium, there would not be any legal/financial impediments in implementing its recommendation to adopt the competitive bidding route for the project. The Sub-Committee recommends that the process of competitive bidding should be initiated as early as possible. Sd/- Sd/- Sd/- (Taj Mohi-Ud-Din) (Nawang Rigzin Jora) (Qazi Muhammad Afzal) Minister for Consumer Minister of Power Minister for Forests, Affairs & PD & A&SH Ecology & Env.& H&UD Sd/- Sd/- (Hakim Muhammad Yasin) (Abdul Aziz Zargar) Minister for Transport Minister for Agriculture & Coop Sericulture & Fisheries. Sd/- Sd/- Sd/- (Taj Mohi-Ud-Din) (Nawang Rigzin Jora) (Qazi Muhammad Afzal) Minister for Consumer Minister of Power Minister for Forests, Affairs & PD & A&SH Ecology & Env.& H&UD Sd/- Sd/- (Hakim Muhammad Yasin) (Abdul Aziz Zargar) Minister for Transport Minister for Agriculture & Coop Sericulture & Fisheries. Sd/- (Mangat Ram Sharma) Minister for Health & Medical Education Labour and Employment & Ladakh Affairs, (Chairman)" 14. Perusal of the terms and conditions of the above referred three documents i.e. the Memorandum of Understanding, the Contract Agreement and the Government Orders, unmistakably demonstrate that the State of Jammu and Kashmir and the State Corporation had decided, inter alia - 1) to select the petitioners-Consortium from amongst the six international players in the field, to submit its detailed offer along with a comprehensive bankable and techno-economically feasible Project Report on FIDIC terms and conditions adopted to local conditions with cost not exceeding Rs.7.50 Crores per Mega Watt based on the exchange rate of Rs.42 to US Dollar 1; 2) to accept the Consortiums offer for designing, executing and completing the Sawalkote Hydro Electric Project at Contract Price of EURO 517,809,152.00 and INR 9,861,156,480.00 remedying any defects therein, in view of Consortiums undertaking to arrange 85% of the total Project Cost comprising Engineering, Procurement and Construction cost; 3) to meet and decide the further course of action in case the Contract did not come into effect within twelve months from the date of the signing of the Agreement; 4) to sanction implementation of Sawalkote Hydro Electric Project with increased capacity of 1200 MWs at EPC cost of 415 Million EUROs and Rs.1926.25 Crores with implementation period of 7-1/2 years on the broad terms and conditions appearing in Government Order No. 366-PDD of 2005 dated 21.12.2005; 5) to provide 30% of the Project Cost as equity out of which advance of 10% at the financial closure and 10% at the start of construction to be provided to the Consortium against Bank Guarantees; 6) that the cost of 7000 Crores for implementation of the Project will not be subject to any increase including that on account of escalation but will be subject to any reduction as may be mutually agreed amongst Power Finance Corporation, the Consortium and the Jammu and Kashmir State Power Development Corporation. 15. 15. The documents placed on record by the parties further indicate that the petitioners, the State Corporation and the State Government had been working under the arrangement devised by Government Order No. 366-PDD of 2005 towards attaining the Financial Closure, persuading the Power Finance Corporation (PFC) to provide for financial assistance to the Project. The petitioners had been continuing their contractual arrangement with the State Corporation regarding the implementation of Sawalkote Hydro Electric Project for seven long years without any complaint from the State Corporation of petitioners any default in discharge of their obligations under the contractual arrangement. It further comes out from the records that all the three parties i.e. the State Government, its Corporation and the petitioners had been taking requisite steps towards the implementation of the Sawalkote Hydro Electric Project. 16. The Power Finance Corporations willing-ness to provide requisite financial support for implementation of the Project, however, got struck for some time, on receipt of Government of India, Ministry of Powers Letter dated 31.05.2006 intimating that the PFC should not fund the Project as it was not being implemented as per the Government of India Guidelines for Competitive Bidding. 17. Responding to the above Communication of the Ministry of Power to the PFC, the State Corporation Limited requested the PFC for funding and loaning the Project informing it that the Sawalkote Hydro Electric Project was a State owned Project being developed by the State Corporation, a 100% Government owned Company and not by any IPP and also not on BOOT pattern, equity whereof had been factored by the Government of India in the 10th Plan and was envisaged in the 11th Five Years Plan for the Jammu and Kashmir State Plan which was providing equity funds for the Project and that the EPC Contract for Sawalkote Hydro Electric Project had been awarded through MOU route after limited tendering and due diligence of the Tenders received vis-`-vis the market considerations. 18. In response to the State Power Development Corporations Communication, aforementioned, the Power Finance Corporation Limited, by its D.O No. 03/05/J&K/IV/05/Sawalkote dated 21.07. 2006, responded as under:- "R.S.JOHRI POWER FINANCE CORPORATION LTD. D.O No.03/05/J&K/IV/05/Sawalakote Date : 21/07/2006 Sh. 18. In response to the State Power Development Corporations Communication, aforementioned, the Power Finance Corporation Limited, by its D.O No. 03/05/J&K/IV/05/Sawalkote dated 21.07. 2006, responded as under:- "R.S.JOHRI POWER FINANCE CORPORATION LTD. D.O No.03/05/J&K/IV/05/Sawalakote Date : 21/07/2006 Sh. Kumar, Kindly refer your D.O No. PDC/843-44 and PDC/850-51 dated 12.06.2006 on financing of Sawalakote Hydro-electric Power Project (1200 MW in two stages) being set up by Jammu & Kashmir State Power Development Corporation Ltd. (JKPDCL) in J&K in this respect, I would like to draw your kind attention to the fact that MoP vide letter dated 31.5.2006 has intimated that Sawalakote HEP is not being implemented as per Govt. of India Guidelines for competitive bidding and should not be funded as it is not in conformity with Govt. of Indias Guidelines. This issue was discussed during your visit to PFC Office on 9.6.2006 and it was agreed that this issue will be taken up with MoP by JKPDCL and due clarification thereof will be submitted to PFC. It was also agreed that appraisal can be taken up only after amicable settlement of this issue and as well as other major issues as below. 1. The cost of the project is very high and the same has to be reviewed by CWC/CEA JKPDCL has already submitted the DPR to CEA for review and TEC. 2. Statutory clearances like TEC, Indus Water treaty etc. were obtained when the project was with NHPC. Since the technical specifications as well as cost of the project have changed now, all the clearances are required to be revalidated. 3. In case of Baglihar HEP certain conditions like broad basing of BoD, signing of MOU with PTC etc. are yet to be fulfilled. The financing of the project with Debt Equity ratio of 70:30, total amount works out to around Rs.5146 Crores. PFCs exposure to __ limited. As such, PFC has to tie up funds with other Banks/FIs. Account of JKPDCL is available only up to 1999-2000. The same remaining years needs to be expedited for raising funds from banks/such long tenure. 4. You would appreciate that for considering financing of Sawalakote HEP and ___ boost the confidence of PFC & other Lenders, JKPDCL/GoJ&K will address all these issues on priority basis. As such, you are requested to expedite action on above issues to enable us to initiate the project appraisal. 4. You would appreciate that for considering financing of Sawalakote HEP and ___ boost the confidence of PFC & other Lenders, JKPDCL/GoJ&K will address all these issues on priority basis. As such, you are requested to expedite action on above issues to enable us to initiate the project appraisal. With regards, Yours sincerely, Sd/- (R.S.JOHRI) Shri Shailendra Kumar, IAS, Managing Director, J&K State Power Dev. Corpn., Srinagar, JAMMU & KASHMIR" 19. The petitioners-Consortium continued assisting the Jammu and Kashmir State Power Development Corporation clarifying the technical and financial queries of the CEA which had called a meeting in October 2006 requiring the Corporation to make presentation in presence of the petitioners to finally conclude the appraisal. 20. The Corporation, however, sought postponement of the meeting whereafter no further date appears to have been fixed by the Corporation for the purpose. 21. The State Power Development Corporation, did not obtain the clarification from the Ministry of Power that the process of Competitive Bidding was not applicable to the State owned Sawalkote Hydro Electric Project, which the PFC had advised it to so obtain, when, in the meanwhile, the State Government constituted a Sub-Committee to look into various aspects of the Sawalkote Project. 22. The State Corporation, thereafter, did not act in any way whatsoever towards the implementation of the Project. This is amply demonstrated by the Central Electricity Authoritys Communication of November 23, 2006, which reads thus:- "Government of India Central Electricity Authority Sewa Bhawan, R.K.Puram New Delhi-110066 [ISO : 9001-2000] No.2/J&K/19/03-CEA/PAC/1751-57 Dated: 23 November, 2006 Managing Director, Jammu & Kashmir State Power Development Corporation, Ashok Nagar, Setwari, Jammu. Subject: Sawalkote Hydro-Electric Project (6 x 200 MW) in Jammu & Kashmir by Jammu & Kashmir State Power Development Corporation (J&KSPDCL) for Techno-Economic Appraisal of CEA regarding. Sir, DPR of Sawalkot HE Project (6 x 200 = 1200 MW) in Jammu & Kashmir was submitted by Jammu & Kashmir State Power Development Corporation (JKSPDC) vide letter dated 4th May, 2006 for techno-economic appraisal of CEA. The same was returned vide CEA letter dated 19th May, 2006 due to non tie up of technical inputs/clearances. However, techno-economic appraisal was continued on a special request from JKSPDC. Comments of CEA/CWC/GSI on various aspects viz., basic inputs (19.05.2006), hydrology (18.10.2006), hydro power planning (11.09.2006), concrete masonry dam (11.09.2006), Inter State aspects (14.08.2006), cost of civil works (28.08.2006), power evacuation (02.08.2006), construction material (17.08.2006). However, techno-economic appraisal was continued on a special request from JKSPDC. Comments of CEA/CWC/GSI on various aspects viz., basic inputs (19.05.2006), hydrology (18.10.2006), hydro power planning (11.09.2006), concrete masonry dam (11.09.2006), Inter State aspects (14.08.2006), cost of civil works (28.08.2006), power evacuation (02.08.2006), construction material (17.08.2006). Geological Survey of India (25.09.2006), financial & commercial aspects (19.10.2006), civil engineering aspects (19.10.2006) have already been sent to JKSPDC. JKSPDC has not responded on these comments even after a lapse of 1 to 6 months. CEA vide letter dated 10th October, 2006 requested JKSPDC to give a detailed presentation covering various aspects of Sawalkot HE Project before the various appraisal groups of CEA, CWC and GSI to assess the suitability of the project for Techno-Economic Appraisal. JKSPDC vide their letter dated 12th October, 2006 informed its inability for presentation due to the meeting of the Board of Directors of the Corporation on 17.10.2006. Even after a month JKSPDC has not responded for a presentation. As JKSPDC is not responding to the comments of CEA and CWC and presentation on the science, it appears that JKSPDC is not very keen to pursue the clearance of the project. Therefore, the DPR of Sawalkot HE Project (1200 MW) may be treated as returned till the receipt of the replies to the comments of CEA and CWC from JKSPDC and a presentation is made by JKSPDC. Yours faithfully, Sd/- (B.K.MISRA) SECRETARY (CEA)" 23. The petitioners-Consortium, was not associated with the proceedings of the Sub-Committee, despite its initiative in offering its assistance to it with respect to any factual information that may be required relating to the Project Development Contract, Consortium Structure etc. 24. After holding two sittings, the Cabinet Sub-Committee, recommended supersession of the orders issued earlier by the State Government, directing the implementation of Sawalkote Hydro Electric Project through a process of Competitive Bidding. The Committee had done so, taking, inter alia, the following factors into consideration:- i. Since the Sawalkote Hydro Electric Project involved very significant public investment, it should be implemented in a manner i.e. seen to be transparent. ii. The Power Finance Corporation was of the view that the Sawalkote Hydro Electric Project was not being implemented as per Government of India guidelines for Competitive Bidding. iii. Following of Government of India Guidelines for Competitive Bidding would enable better support from Central Agencies and Financial Institutions. iv. ii. The Power Finance Corporation was of the view that the Sawalkote Hydro Electric Project was not being implemented as per Government of India guidelines for Competitive Bidding. iii. Following of Government of India Guidelines for Competitive Bidding would enable better support from Central Agencies and Financial Institutions. iv. The Project having not reached financial closure and there being no formal Agreement/Contract with the Consortium, there was no legal impediment in adopting the Competitive Bidding route for the Project. 25. The Government Order impugned in this Writ Petition does not spell out the reasons which had weighed with the State Government in issuing it. It has thus to be presumed that the State Government had taken the decision accepting all the recommendations of the Cabinet Sub-Committee. 26. Perusal of the records produced by the learned Advocate General to justify the State action in issuing the impugned Government Order needs reference to the facts leading to the constitution of the Cabinet Sub-Committee and the process undertaken by the Committee in making its recommendations on the implementation of the Sawalkote Hydro Electric Project. One of the Honble Ministers of the State Government appears to have brought to the notice of Honble Chief Minister that there was a wide spread whispering campaign regarding the transparency of execution of Sawalkote Project which had been considered appropriate by him to examine the details of the Contract and different opinions of legal experts. He is stated to have prepared a comprehensive report detailing all the facts after examining details of the Contract, different opinions of legal experts, facts and circumstances in which the Contract was proposed to be executed. Learned Minister is indicated to have firmly believed that the Consortium with whom the Contract was proposed to be executed had one of the members i.e. M/S SPAS, which claims to be the successor of M/S NCC. According to him, there was, however, no document which would suggest regarding its technical capacity, financial capacity, past experience and present engagements. The eagerness with which the Contract was proposed to be awarded had appeared to the Minister, actuated by considerations opposed to the public policy. The facts and details, according to the note of the Minister, were not placed before the Cabinet when it had issued its order of 19.12.2005. The eagerness with which the Contract was proposed to be awarded had appeared to the Minister, actuated by considerations opposed to the public policy. The facts and details, according to the note of the Minister, were not placed before the Cabinet when it had issued its order of 19.12.2005. Concluding the request made to the Honble Chief Minister, a fresh look to the earlier decision had been sought for, so that no contract was entered by the Government which ran contrary to the Public Policy. According to the instructions of Honble the Chief Minister, the matter was examined by the Ministry of Power of the State Government, which suggested legal opinion in the matter before placing the matter with the Cabinet. Legal opinion does not, however, appear to have been obtained in the matter before placing it with the Cabinet, that decided to constitute a Cabinet Sub Committee to go into all the aspects of the Project, including the concerns of the Minister. A Cabinet Sub Committee was, accordingly, constituted vide Government Order No.1322-GAD of 2006 dated 19.10.2006 under the Chairmanship of Pandit Mangat Ram Sharma, Honble Minister for Health and Medical Education /Labour and Employment/ Ladakh Affairs with the following members: 1. Shri Abdul Aziz Zargar. Honble Minister for Agriculture, Sericulture, Cooperative and Fisheries. 2. Hakim Mohammad Yasin, Honble Minister for Transport. 3. Qazi Mohd. Afzal, Honble Minister for Forest, Ecology & Environment & Housing and Urban Development. 4. Shri Nawang Rigzin Jora, Honble Minister for Power. 5. Shri Taj Mohi-ud-Din, Honble Minister for Consumer Affairs and Public Distribution, Animal Husbandry & Sheep Husbandry. The Committee, after holding two sittings, prepared its recommendations on 15.11.2006. The recommendations of the Cabinet Sub-Committee were placed before the Cabinet on the same day, as a Non-Agenda Item on which Cabinet decision no.259/15 dated 15.11.2006 was taken to supersede Government Order no.366-PDD of 2005 dated 21.12.2005 and implement the Sawalkote Hydro Electric Project through a process of Competitive Bidding as per guidelines of the Government of India on the subject. DISCUSSION ON THE CONSTITUTION OF THE CABINET SUB-COMMITTEE AND ITS REPORT 27. DISCUSSION ON THE CONSTITUTION OF THE CABINET SUB-COMMITTEE AND ITS REPORT 27. From the facts aforementioned, as discerned from the records of the respondents, it is apparent that the Honble Minister, on whose Complaint, Honble the Chief Minister had taken cognizance to place the matter of implementation of the Sawalkote Hydro Electric Project and issues related thereto, before the State Cabinet, was one of the members on the Cabinet Sub Committee, which had to examine the issue complained of by the Minister concerned. 28. The question that therefore falls for consideration is whether the proceedings held by the Cabinet Sub-Committee and the recommendations made by it to the State Government, are vitiated because of the presence of the Complainant-Minister in the decision making Forum. The fundamental rule that `No one can be judge in his own cause flowing from the Legal Maxim NEMO DEBET ESSE JUDEX IN PROPRIA SUA CAUSA, codified by Section 40 of the Jammu and Kashmir State Civil Courts Act, 1997, in terms whereof the Presiding Officer of a Civil Court has been debarred from trying any Suit or other proceedings to which he is a party or in which he is personally interested applies equally to quasi-judicial authorities. To ensure fairness of its actions, the Administration in a democratic set up, too is enjoined to follow the principle flowing from the above mentioned Maxim, in that, such is even otherwise the requirement of the principles of Natural Justice that justice should not only be done, but manifestly and undoubtedly be seen to be done. 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 interests of its subjects. Every action of the executive Government must therefore be informed with reasons and should be free from arbitrariness. This is the essence of the rule of law and its bare minimal requirement. Any act of the repository of power, whether legislative or administrative is open to challenge if it is so arbitrary or unreasonable that no fairminded Authority could even have ever made it. This is the essence of the rule of law and its bare minimal requirement. Any act of the repository of power, whether legislative or administrative is open to challenge if it is so arbitrary or unreasonable that no fairminded Authority could even have ever made it. The concept of equality as enshrined in Article 14 of the Constitution embraces the entire realm of the State action; the doctrine of equality, as held by various Courts, is now treated as a synonym of FAIRNESS in the concept of justice and stands as the most accepted methodology of a Government action. The administrative action has, therefore, to be JUST, on the touch stone of "fair play and reasonableness". The governmental action must be based on utmost good faith, belief and supported by reasons on the basis of the state of law. 29. The presence of the Complainant-Minister, in the Cabinet Sub-Committee, constituted to examine his Complaint regarding the implementation of the Sawalkote Hydro Electric Project, may thus genuinely raise eye-brows regarding his unbiased approach in discharging the functions of a Member on the Cabinet Sub-Committee with, independent, free and unbiased mind, regardless of the view which he had reflected in his Complaint in respect of the Consortium, its Constitution and the implementation of the Sawalkote Hydro Electric Project; In these circumstances, a presumption, therefore, arises that not only would have the Minister influenced the mind of the other Members on the Committee but would have certainly done all, he could possibly so do, to project his view point, when there was none in the Committee to speak for and on behalf of the Consortium, whose agreement with the Government for implementation of the Sawalkote Hydro Electric Project was the subject matter of discussion before the Committee. 30. The decision taken by the Cabinet Sub-Committee with the Complainant-Minister as one of its Members, against the Consortium in continuing with the ongoing arrangement, and that too in the absence of the Consortium, cannot thus be viewed as free from bias. 31. 30. The decision taken by the Cabinet Sub-Committee with the Complainant-Minister as one of its Members, against the Consortium in continuing with the ongoing arrangement, and that too in the absence of the Consortium, cannot thus be viewed as free from bias. 31. The silence on the part of the Cabinet Sub-Committee in not responding to the request of the Consortium to associate it in its proceedings, as had been done by the State Government on an earlier occasion when it had constituted a high level Committee to look into all the aspects regarding the implementation of the Sawalkote Hydro Electric Project, too hints at violation of the principles of Natural Justice by the Cabinet Sub-Committee, in not providing hearing to the Consortium, on the allegations which the Complainant-Minister had made against its Constitution and the functioning of the Project, before making recommendations against the Consortium to the State Government. 32. One of the factors which had influenced the recommendations of the Cabinet Sub-Committee to terminate the existing arrange-ment of the respondents with the petitioners for implementation of the Sawalkote Hydro Electric Project, was that the Project was not being implemented as per Government of India Guidelines for Competitive Bidding, which demonstrated that the arrangement which the respondents had started with the petitioners was not transparent. 33. Another factor which is shown to have weighed with the Cabinet Sub-Committee was that the Central Agencies and the Financial Institutions may not be able to support the Project which was not being implemented in conformity with the Government of India Guidelines on the subject. 34. The records produced by the learned Advocate General, bear testimony to the fact that while forming its opinion on the implementation of the Sawalkote Hydro Electric Project on the above two aspects, the Cabinet Sub-Committee does not appear to have correctly appreciated the Power Finance Corporations Communication of July 21, 2006, in terms whereof the Corporation had, itself, advised the State Corporation, to take up the matter with the Ministry of Power to obtain clarification, which in view of the correspondence resting on the subject, between the Power Finance Corporation and the Jammu and Kashmir State Corporation, indicates that the Sawalkote Hydro Electric Project, being a State owned Project, and not an IPP, the Government of India Guidelines were not required to be followed for award of EPC Contract. 35. 35. The State-respondents have admitted in their pleadings, that the Government of India Guidelines for implementation of the Sawalkote Hydro Electric Project were not attracted and in this view of the matter, an important aspect appears to have escaped notice of the Cabinet Sub-Committee which had made its recommendations, without noticing that the Power Finance Corporation was no longer of the view that the Government of India Guidelines were necessarily required to be followed for implementation of the Sawalkote Hydro Electric Project, to enable it to reach Financial Closure and had rather, on the other hand, suggested the State Corporation to approach the Ministry of Power, Government of India, apprising it that there was no requirement of following the Government of India Guidelines for Competitive Bidding in case of State owned Projects like the Sawalkote Hydro Electric Project. 36. The Cabinet Sub-Committees recommend-ation that since the Sawalkote Hydro Electric Project involved very significant public investment, it should be implemented in a manner, seen to be transparent, appears to have been made without any material in support thereof, in that, barring mere allegation of the Complainant-Minister that there was wide spread whispering campaign regarding the transparency of the execution of the Sawalkote Hydro Electric Project. The recommendations made by the Cabinet Sub-Committee on the basis of mere allegation appearing in the Complaint of the Complainant-Minister that the Sawalkote Hydro Electric Project was not being executed in a transparent manner, without there being any material before the Cabinet Sub-Committee, in support thereof, were not therefore required to be accepted by the State Government. 37. During the course of hearing of the Petition, the petitioners learned counsel placed on records Power Finance Corporation Ltds D.O. No. 03/05/J&K/IV/05/Sawalkote of June 14, 2007 addressed by Director (Projects) to Joint Secretary (Hydro) Government of India, Ministry of Power responding to its Communication of May 31, 2006 that no Project should be funded by the PFC that is not in conformity with the Government of India Guidelines, saying that the letter had been presumably issued by the Ministry of Power on the understanding that Sawalkote Hydro Electric Project was to be implemented as an IPP and thus needs to be taken up based on the Competitive Guidelines of Government of India. The D.O letter further indicated that the present proposal for implementation of the Sawalkote Hydro Electric Project was in the State Sector through JKPDCL, the observations of the Ministry of Power did not appear to be applicable in the case and that the Ministry may kindly review the matter and issue an appropriate clarification in this regard. Learned Advocate General was asked to respond to this development which had taken place during the currency of the Writ Petition, but he has chosen not to respond to it. 38. From the above discussion and the facts emerging from the records of the respondents, it is apparent that the State Power Corporation Limited had been sitting silent after its June 2006 meeting with the Power Finance Corporation, thereby omitting to seek requisite clarification from the Ministry of Power that requirement of Competitive Bidding was not attracted in case of the implementation of the Sawalkote Hydro Electric Project, as advised by the Power Finance Corporation. Power Finance Corporations Communication of June 14, 2007 too indicates that it was inclined to fund the Sawalkote Hydro Electric Project, after receipt of requisite clarification from the Ministry of Power, Government of India. 39. The State Power Development Corporation having omitted to do, that it had been advised by the Power Finance Corporation so to do, inter alia, in sending its certified accounts to the Corporation, towards attaining the Financial Closure for the Project, cannot thus take advantage of its own omission(s)/wrong(s) to say that the Financial Closure having not reached, the on-going arrangement with the Consortium warranted following of Competitive Bidding Guidelines to ensure Financial Closure of the Project. Likewise the State too cannot be permitted to take a position of terminating the on-going arrangement, though contractual, with the Corporation on the ground that the Project could not attain Financial Closure for its take off, when its own Corporation, required to take up the matter with the Ministry of Power to obtain clarification that Government of India Guidelines of Competitive Bidding were not required to be followed in the case, the Project being a State owned Project and not an IPP, had omitted so to do and that too for no reasons. The omission and lapses of the Corporation in doing that it was required to do in the circumstances, cannot be made a ground to deprive the petitioners-Consortium of their right of legitimate expectation of executing the EPC Contract for implementation of the Sawalkote Hydro Electric Project on which it had been working for more than seven years spending time, efforts besides money, with the respondents. 40. The recommendations of the Cabinet Sub-Committee proceed on the premise that the Power Finance Corporation had expressed reservations in financing the Project, for not following the Competitive Bidding Guidelines of Government of India in implementation of the Project, which is, however, not true and correct construction of the Power Finance Corporations Communication of July 2006. This Communica-tion, as its reading would so demonstrate, had advised the State Power Development Corporation and even the Ministry of Power, Government of India to issue clarification that Competitive Bidding Guidelines of Government of India were not attracted to the Sawalkote Hydro Electric Project, which was a State owned Project and not an IPP to which the Guidelines would apply. 41. The State Government, therefore, acted illegally in accepting the recommendations of the Cabinet Sub-Committee, which were based on the misconstruction of the Communications issued by the Power Finance Corporation in respect of the implementation of the Sawalkote Hydro Electric Project. 42. The process employed by the State-respondents in coming to the conclusion that the Sawalkote Hydro Electric Project was required to be implemented following Government of India Guidelines, primarily basing its decision on the view taken in the matter by the Power Finance Corporation, may not thus be justified, in view of the clear position emerging from the records that the Power Finance Corporation had desired the State Power Development Corporation Limited and the Ministry of Power, Government of India, to issue clarification on the subject that the Government of India Guidelines for Competitive Bidding were not required to be followed for implementation of the Sawalkote Hydro Electric Project. 43. The position would have been entirely different, had the Ministry of Power conveyed its final refusal to the clarifications sought for by the Power Finance Corporation, which was considering the financing of the Project, subject however, to the receipt of such clarification from the Ministry of Power. 44. 43. The position would have been entirely different, had the Ministry of Power conveyed its final refusal to the clarifications sought for by the Power Finance Corporation, which was considering the financing of the Project, subject however, to the receipt of such clarification from the Ministry of Power. 44. The State Government, thus, appears to have acted with undue haste in terminating the arrangement with the petitioners-Consortium for implementing the Sawalkote Hydro Electric Project, without waiting for the Ministry of Powers response to the clarifications sought for by the Power Finance Corporation and in omitting to hear the petitioners-Consortium in the matter before taking decision to terminate more than seven years long arrangement it had been continuing with the Consortium, after having initially, selected it, of the six global players in the field, to implement the Sawalkote Hydro Electric Project, thereafter, entered into a Memorandum of Understanding, a Contract for implementation of the Project and finally having issued Government Order No. 366-PDD of 2005 dated 21.12.2005 for implementation of the Sawalkote Hydro Electric Project with enhanced capacity of 1200 MWs, effecting suitable changes in the Constitution of the Consortium so as to reduce its cost and further ensuring its Indianisation and that too on the recommendations of the State Governments High Powered Committee appointed to look into all the aspects of the implementation of the Sawalkote Hydro Electric Project, which recommendations were finally accepted by the States Corporation in its 42nd Board Meeting. 45. Submission of the recommendations of the Cabinet Sub-Committee, to the State Cabinet on the day these are stated to have been prepared, and that too through a Non-agenda Item too speaks of the hurried decision that the State Government had taken in terminating the existing arrangement for implementation of the Sawalkote Hydro Electric Project with the petitioners-Consortium without providing them any opportunity of hearing before taking the decision, which on the face of it violates the well recognized principle of Audi alteram partem which is fully attracted in the facts and circumstances of the case, in that, the decision of the State Government, visits the petitioners-Consortium with civil consequences. CONCLUSION 46. CONCLUSION 46. In view of the above discussion, the State Government is found to have acted against law in issuing the impugned Government Order:- 1} Because it had issued the impugned Government Order on the basis of the recommendations of the Cabinet Sub-Committee, whose Constitution suffered from the vice of unfairness because of the presence of an Honble Minister, who himself was the Complainant in the case, with a firm view that Government Order No. 366-PDD of 2005 dated 21.12.2005, had not been issued in public interest, warranting implementation of the Sawalkote Hydro Electric Project by fresh process of Competitive Bidding and was thus biased towards the implementation of the Sawalkote Hydro Electric Project in terms of Government Order No. 366-PDD of 2005 dated 21.12.2005. 2} Because the Cabinet Sub-Committee had formed its opinion in recommending to the State Government for implementation of the Sawalkote Hydro Electric Project by following process of fresh Competitive Bidding under the Government of India Guidelines, on misconstruction of July 2006 Communication of the Power Finance Corporation Limited, proceeding on the premise that the Central Agencies may not fund the Sawalkote Hydro Electric Project, on the ground that it was being implemented without following Government of India Guidelines of Competitive Bidding. 3} Because it had issued the impugned Government Order, without inviting and waiting for the response of the Ministry of Power, Government of India to issue clarifications, as suggested by the Power Finance Corporation of India, that Government of India Guidelines on Competitive Bidding were not required to be followed in implementation of the Sawalkote Hydro Electric Project, which was a State owned Project and not an IPP, for implementation whereof the Competi-tive Bidding Guide-lines may be required. 4} Because it had acted on the recommendations of the Cabinet Sub-Committee that the Sawalkote Hydro Electric Project needed to be implemented in a manner seen to be transparent, when there was no material before the Committee to dub the selection of the petitioners-Consortium for execution of the Sawalkote Hydro Electric Project, execution of Contract and issuance of Government Order No. 366-PDD of 2005 dated 21.12.2005 in any way secretive and suffering from any other vice, requiring its rectification. 5} Because it had violated the principles of Natural Justice, and acted arbitrarily in acting on the recommendations of the Cabinet Sub-Committee in terminating the existing arrangement with the petitioners-Consortium, without affording it any opportunity of hearing in the matter, although it had asked for such hearing for assisting the Cabinet Sub-Committee in coming to the right decision. 6} Because it had acted with undue haste in depriving the petitioners-Consortium of their right of legitimate expectation of executing the EPC Contract for implementation of the Sawalkote Hydro Electric Project, without associating it in the process undertaken before issuance of the impugned Government Order. 7} Because seven years long arrangement of the State Government and the State Power Development Corporation with the petitioners-Consortium, has been annulled by a non-speaking order, without spelling out reasons on the basis whereof Government Order No. 366-PDD of 2005 dated 21.12.2005 with its Addendum of 04.04.2006, had been found suffering from any such vice justifying its supersession. 47. For all what has been said above, the petitioners are found to have succeeded in making out a case justifying exercise of the power of Judicial Review by this Court, in that, the State action in issuing Government Order No. 212-PDD of 2006 dated 21.11.2006 is found to have been issued arbitrarily, with undue haste violating the principles of Natural Justice and the provisions of Article 14 of the Constitution of India. 48. This Petition, therefore, succeeds and is, accordingly, allowed, quashing Government Order No. 212-PDD of 2006 dated 21.11.2006, with costs quantified at Rs.15,000/-. 49. Records be returned to the learned Advocate General.