New
Delhi:
A policy decision to get the “best operator at the best price” cannot be said
to be unreasonable and the courts are not concerned with the ultimate decision
but the decision-making process while judicially reviewing the actions of the
Executive, the Supreme Court held today.
The
verdict of the top court came on an appeal filed by the Punjab State Power
Corporation Limited (PSPCL), in which it set aside the judgment of the Punjab
and Haryana High Court that had held that Emta Coal Limited will have the first
right of refusal in a matter of lending of mining lease.
PSPCL
had granted the mining lease in favour of the company in 2000 for the purpose
of development of captive coal mines in Jharkhand for the production of
electricity in the state.
However,
the top court later cancelled all the coal block allocations and in the
subsequent process, the company could not get the mining lease, leading to
several court cases.
“A
policy decision to get the best operator at the best price cannot be said to be
a decision which no reasonable person would take in his affairs. In that view
of the matter, the attack on the order (of the authority to grant mining
lease)...is without merit,” a bench headed by Justice L Nageswara Rao said.
The
bench, which also comprised justices B R Gavai and B V Nagarathna, allowed the
appeal of the PSPCL against the high court's verdict after holding that the
mining lease has been granted following a competitive bidding process and the
firm cannot claim a right to legitimate expectations and the first right to
refusal.
“It
could thus be seen that while exercising the powers of judicial review, the
court is not concerned with the ultimate decision but the decision-making
process. The limited areas in which the court can enquire are as to whether a
decision-making authority has exceeded its powers, committed an error of law or
committed a breach of principle of natural justice.
“It
can examine as to whether an authority has reached a decision which no
reasonable tribunal would have reached or has abused its powers,” the judgment
said.
Writing
the judgment, Justice Gavai said it is not for the court to determine whether a
particular policy or decision taken in the fulfilment of that policy is fair.
“The
court will examine as to whether the decision of an authority is vitiated by
illegality, irrationality or procedural impropriety. While examining the
question of irrationality, the court will be guided by the principle of
Wednesbury...the court will examine whether the decision of an authority is
such that no authority properly directing itself on the relevant law and acting
reasonably could have reached it,” the judgment said.
It
said PSPCL had decided to go in for a competitive bidding process for the
purpose of eliciting the best operator.
Referring
to a judgment, it said the decision-makers' freedom to change the policy in
public interest cannot be fettered by applying the principle of substantive
legitimate expectation.
“In
the result, the impugned judgment and order passed by the High Court of Punjab
and Haryana is unsustainable in law. The appeals are therefore allowed and the
judgment and order passed by the High Court of Punjab and Haryana dated January
25, 2019 is quashed and set aside,” it held.
In
2001, the Centre had allotted a captive coal block, Pachhwara (Central Block)
Coal Mine in Jharkhand, to the Punjab electricity body.
“However,
on August 25, 2014, this court, in the case of Manohar Lal Sharma, held that
the entire allocation of coal blocks made between 1993 and 2011, except those
which were made through competitive bidding, were invalid, unfair, arbitrary
and violative of Article 14 of the Constitution,” the judgment noted.
As
the company could not get the mining lease during subsequent tender
proceedings, it went to the high court, which allowed its plea.
“We
find that the reasoning adopted by the high court is totally wrong. Merely
because the coal mine block was allotted to PSPCL, the same could not give any
vested right in favour of EMTA, particularly in view of the language used in
section 11 of the said Act.
“The
reasoning given by the high court that PSPCL was within its rights to reject
the arrangement if the performance of EMTA was unsatisfactory or if there was
any other factor which the corporation found relevant enough to discard the
arrangement altogether, in our view, is totally erroneous,” the top court said.
_____________