NAR BAHADUR BHANDARI Vs. STATE OF SIKKIM,

JUDGEMENT

(1.) I . The core issue 1. The core issue that arises for consideration in this Writ Petition is: Whether the Agreement dated 18.07.2005 entered into between the State of Sikkim and M/s. Teesta Urja Ltd. (respondent No.3), for setting up a Hydro Electric Project ­ Teesta Stage III based on the policy of State/Letter of Intent dated 26.02.2005, is contrary to law, guidelines, and mandatory instructions of the Ministry of Power, Government of India and opposed to public interest? II. Public Interest Litigation

(2.) THIS is a Public Interest Litigation. The first petitioner was the former Chief Minister of the State of Sikkim during the period 1979 to 1984. He was subsequently elected as a Member of Parliament and then again was the Chief Minister until 1994; the second petitioner is an active member and office bearer of the Sikkim Pradesh Congress Committee; and the third petitioner is the Treasurer of the Sikkim Pradesh Congress Committee and was also the former Mayor of Gangtok and former Member of the Legislative Assembly of Sikkim.

(3.) THE relevant and undisputed factual matrix of the case is stated as follows: - (i) The proposal for carrying out Hydro Electric Projects in the State of Sikkim originated in the year 1974. The Sikkim State became part of the Indian Union in the year 1975 by the 36th Amendment of the Constitution of India. An expert team was constituted by Central Water Commission (CWC) to formulate the proposal and make suggestions for carrying out such investigations for establishing Hydro Electric Generation Schemes in Sikkim particularly in Teesta and Rangit Valleys of Sikkim. (ii) CWC prepared a detailed Project Report for the 1200 MW Teesta Stage-III Hydro Electric Project in the year 1987. The Ministry of Power, Government of India requested the Government of Sikkim's concurrence to carry out the execution of the Project under the Central Sector with National Hydroelectric Power Corporation Ltd. (NHPC) as the implementing agency in October 1987 by a letter dated 12.10.1987. The State Government forwarded its concurrence to the said proposal on 14.03.1988. (iii) The Detailed Project Report was drawn by NHPC for the purpose of obtaining Techno Economic Clearance in December 1990. (iv) In the year 1991, the Government of India announced a new liberalized policy whereby, the Government of India permitted entry of private parties in the field of power generation and consequently, certain private parties expressed their interest in executing Teesta Stage-III Hydro Electric Project for generating 1200 MW electricity. (v) The Government of Sikkim, to secure its interest in a better manner, invited interested parties for implementation of the aforesaid project. (vi) The State Government without taking any policy decision or carefully examining the proposals of the private parties in detail, arbitrarily withdrew its original proposal to execute the project with NHPC. (vii) Government of Sikkim thus proposed to invite bidding from the interested developers across the globe, to develop the said Power Project on 'Build, Own, Operate and Transfer' (BOOT) basis in the year 1993, and also sought permission from the Central Government to execute the above project on BOOT basis. Based on such invitation several interested parties came forward to execute the Teesta Stage-III Hydro Electric Power Project for generating 1200 MW electricity. Of them seven private parties were short listed. For taking further decision in the matter, a High Level Committee was formed to evaluate the bids and offers. (viii) The Ministry of Power, Government of India in their letters dated 18.01.1995 and 15.02.1995, stipulated a mandate that after 18.02.1995, private power projects whose total estimated cost exceeded Rs.100 crores, would have to be awarded only through process of competitive bidding.