BHARAT HYDRO POWER CORPORATION LTD Vs. STATE OF ASSAM

JUDGEMENT

(1.) In the writ petition in Civil Rule 283/97 under Article 226 of the Constitution of India, the petitioners have challenged the validity of the Act, namely. The Bharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Act, 1996, being Assam Act No. 1 of 1997 published in the Assam Gazette Extraordinary dated 6th January, 1997.

(2.) Petitioners No. 1 and 2 are the companies registered under the Companies Act, 1956, limited by shares and petitioners No. 1 claims to be the sole and absolute owner of the "100MW Karbi Langpi (Lower Barapani) Hydro Electric Power project for short "the project").

(3.) The chronology of the installation of the power project as emerged from the submissions of the parties is that in 1979 the Planning Commission sanctioned a project for production of 100 MW electricity , known as "Karbi Langpi (Lower Barapani) Hydro Electric Power Generating project in the State of Assam at the approved cost of Rs. 34.15 crores. The Assam State Electricity Board (ASEB) was entrusted with the responsibility of setting up and commissioning of the said project. The ASEB commenced the work of the project with a target to complete by the year 1985 by taking loan from Japan. Originally the ASEB (respondent No. 2) was entrusted with the project and work was started from 1980 but there was inordinate delay in execution of the works and only 50% of the work was done. Consequently, further construction work of the project came to a stand still at the end of 1992 due to non availability of fund and the project was lying almost abandoned. At the end of 1992 a policy decision was taken by the respondents No. 1 and 2 commensurate with the Central Govt. Policy declarations that in order to ensure speedy completion of the said project private participation and capital should be introduced. The ASEB procured 1.7 million Yen loan from the Overseas Economic Co-operative Fund and the Govt. of Assam procured a loan of Rs. 58 crores in 1983 from Japan through Govt. of India for purchase of Turbo Generator and other equipments at a very low rate of interest. The said loan which is refundable in Yen alongwith interest has now increased to about Rs. 100 crores taking into account the increase in value of Yen in exchange rate as against rupees and interest. Further contention of the petitioners is that the ASEB commenced the project work with a target to complete it by the year 1985 taking the said loan from Japan, but by 1993 the ASEB could complete only 50% of the project work incurring total cost till then of about Rs. 130 Crores and thereafter the ASEB virtually abandoned the project and the project work was entrusted to different contractors including Rastriya Pariyojna Nirman Nigam Limited from time to time by ASEB, but the work could not be completed and the project was, as contended, virtually in abandoned position for non availability of fund/ resources. As the estimated cost was increased to Rs. 45.8 Crores in 1992, tenders were again invited and total costs came to Rs. 189.90 crores. In the meantime, the Government of India changed the policy regarding private participation in power project and the State Government decided to transfer the project to an assisted sector company. At this time the petitioner company came forward to undertake the project with participation of the ASEB and/or State Government. Petitioner's contention is that the matter was concerned practically at all suitable levels both by the ASEB and by the State of Assam and a number of meetings were held in course of negotiations and ultimately the matter was placed before the State Cabinet. The State Cabinet after negotiations approved the policy and gave its approval in the matter of entering into the Memorandum of Understanding (MoU) with the petitioner No. 2; that the MoU dated 25th March, 1993 was drawn with consent of the three parties, namely, the State of Assam, the ASEB and M/s. Subhas Project and Marketing Ltd. and the same was signed by three parties. In accordance with the provisions of the said MoU, a Deed of Assignment was executed and accordingly all assets and properties of the project were transferred in favour of the petitioner No. 1. It is alleged that respondent No. 2 ASEB has taken about one year to hand over the assets and properties of the project in question, the value of which is about Rs. 40 crores, in spite of repeated requests.