IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN TUESDAY, THE 1ST JANUARY 2008 / 11TH POUSHA 1929 WP(C).No. 31044 of 2007(U) ----------------------------------------- PETITIONER: -------------------- HINDUSTAN CONSTRUCTION COMPANY LIMITED, HAVING ITS REGISTERED OFFICE AT HINCON HOUSE, LAL BAHADUR SHASTRI MARG, VIKHROLI (WEST), MUMBAI-400 083. BY ADV. SRI.DAIRUS KHAMBATTA (SR) SRI.M.RAMESH CHANDER RESPONDENTS: ------------------------- 1. KERALA STATE ELECTRICITY BOARD, REPRESENTED BY ITS SECRETARY, VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM. 2. THE STATE OF KERALA, REPRESENTED BY THE COMMISSIONER AND SECRETARY TO GOVERNMENT, POWER DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. 3. BHARAT HEAVY ELECTRICALS LIMITED, HAVING ITS REGISTERED OFFICE AT BHEL HOUSE, SIRI FORT, NEW DELHI-110 049. R1 BY ADV. SRI.C.K.KARUNAKARAN, SC, KSEB BY GOVERNMENT PLEADER SRI. A.J.VARGHESE THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14/12/2007, THE COURT ON 01/01/2008 DELIVERED THE FOLLOWING: Kss WPC.NO.31044/2007 U APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF TENDER DOCUMENTS INSTRUCTION TO BIDDERS ISSUED BY RESPONDENT NO.1 DTD. 4TH DEC.1999. EXT.P2: COPY OF CONSORTIUM AGREEMENT BETWEEN PETITIONER AND RESPONDENT NO.3 DTD. 8TH APRIL 2000. EXT.P3: COPY OF STATEMENT CONTAINING DETAILS OF CORRESPONDENCES REGARDNG EXTENSION OF BANK GUARANTEES/TENDER VALIDITY BETWEEN JANUARY 2001 AND OCTOBER 2001. EXT.P4: COPY OF LETTER DTD. 10TH JULY, 2001. EXT.P5: COPY OF LETTER DTD. 24TH AUGUST, 2001. EXT.P6: COPY OF LETTER DTD. 10TH OCTOBER, 2001. EXT.P7: COPY OF COMMON JUDGMENT OF THE HON'BLE COURT DTD. 17TH OCTOBER 2001 IN O.P.1774 OF 2001 ETC. EXT.P8: COPY OF STATEMENT CONTAINING DETAILS OF CORRESPONDENCES REGARDING EXTENSION OFBANK GUARANTEES/TENDER VALIDITY BETWEEN OCTOBER 2001 AND JUNE 2005. EXT.P9: COPY OF LETTER DTD. 11TH DECEMBER 2001 ADDRESSED BY RESPONDENT NO.1. EXT.P10: COPY OF LETTER DTD. 25TH JANUARY 2002. EXT.P11: COPY OF LETTER DTD. 24TH APRIL, 2002. EXT.P12: COPY OF LETTER DTD. 26TH JULY, 2002. EXT.P13: COPY OF LETTER DTD. 30TH OCTOBER, 2002. EXT.P14: COPY OF LETTER DTD. 30TH JANUARY 2003. EXT.P15: COPY OF LETTER DTD. 28TH MARCH, 2003. EXT.P16: COPY OF LETTER DTD. 27TH JUNE, 2003. Kss ...2/- ....2..... WPC.NO.31044/2007 U EXT.P17: COPY OF LETTER DTD. 6TH AUGUST 2003. EXT.P18: COPY OF LETTER DTD. 21ST AUGUST, 2003. EXT.P19: COPY OF LETTER DTD. 29TH SEPTEMBER,2003. EXT.P20: COPY OF LETTER DTD. 30TH DECEMBER, 2003. EXT.P21: COPY OF LETTER DTD. 30TH MARCH, 2004. EXT.P22: COPY OF LETTER DTD. 29TH JUNE, 2004. EXT.P23: COPY OF LETTER DTD. 30TH SEPTEMBER,2004. EXT.P24: COPY OF LETTER DTD. 28TH DECEMBER, 2004. EXT.P25: COPY OF LETTER DTD. 17TH FEBRUARY, 2005. EXT.P26: COPY OF LETTER DTD. 29TH MARCH, 2005. EXT.P27: COPY OF THE ENVIRONMENTAL CLEARANCE LETTER DTD. 10TH FEBRUARY, 2005. EXT.P28: COPY OF LETTER DTD. 9THMAY 2005 ADDRESSED BY RESPONDENT NO.1. EXT.P29: COPY OF LETTER DTD. 10THMAY 2005. EXT.P30: COPY OF LETTER DTD. 1ST JUNE 2005 ADDRESSED BY RESPONDENT NO.1. EXT.P31: COPY OF STATEMENT CONTAINING DETAILS OF CORRESPONDENCES REGARDING EXTENSION OF BANK GUARANTEES/TENDER VALIDITY BETWEEN JUNE 2005 AND JANUARY 2006. EXT.P32: COPY OF LETTER DTD. 27TH JUNE 2005. EXT.P33: COPY OF LETTER DTD. 28TH SEPTEMBER, 2005. EXT.P34: COPY OF LETTER DTD. 22ND DECEMBER 2005 ADDRESSED BY RESPONDENT NO.1. EXT.P35: COPY OF LETTER DTD. 27TH DECEMBER, 2005. Kss ...3/- ....3.... WPC.NO.31044/2007 U EXT.P36: COPY OF LETTER DTD. 11TH JANUARY 2006 ADDRESSED BY RESPONDENT NO.1. EXT.P37: COPY OF ORDER OF HON'BLE COURT DTD. 23RD MARCH 2006 IN WP(C) NO.11254/2005 ETC. EXT.P38: COPY OF THE STEPS TAKEN TO COMPLY WITH HON'BLE COURTS SAID ORDER DTD. 23RDMARCH 2006. EXT.P39: COPY OF THE ENVIRONMENTAL CLEARANCE DTD. 18TH JULY 2007. EXT.P40: COPY OF LETTER DTD. 18TH MAY 2007 ADDRESSED BY RESPONDENT NO.1. EXT.P41: COPY OF STATEMENT CONTAINING DETAILS OF CORRESPONDENCES REGARDING EXTENSION OF BANK GUARANTEE/TENDER VALIDITY BETWEEN JANUARY 2006 AND SEPTEMBER 2007. EXT.P42: COPY OF LETTER DTD. 31ST MARCH, 2006. EXT.P43: COPY OF LETTER DTD. 30TH MAY 2006. EXT.P44: COPY OF LETTER DTD. 28TH JULY 2006. EXT.P45: COPY OF LETTER DTD. 28TH AUGUST, 2006. EXT.P46: COPY OF LETTER DTD. 30TH NOVEMBER, 2006. EXT.P47: COPY OF LETTER DTD. 31ST JANUARY 2007. EXT.P48: COPY OF LETTER DTD. 30TH MARCH 2007. EXT.P49: COPY OF LETTER DTD. 20TH JUNE 2007. EXT.P50: COPY OF LETTER DTD. 20TH AUGUST 2007. EXT.P50A: COPY OF RESPONDENT NO.1'S BOARD DECISION (EXHIBIT R1(D)- PAGE 2 OF RESPONDENT NO.1'S AFFIDAVIT DTD. 2ND NOVEMBER, 2007). Kss ..4/- ....4.... WPC.NO.31044/2007 U EXT.50(B): COPY OF RESPONDENT NO.2'S LETTER (EXHIBIT R1(C)1-2 PAGES 122-123 OF RESPONDENT NO.1'S COUNTER AFFIDAVIT DTD. 29TH OCTOBER, 2007) EXT.P51: COPY OF LETTER DTD. 5TH SEPTEMBER 2007 ADDRESSED BY RESPONDENT NO.2. EXT.P52: COPY OF NEWSPAPER ARTICLE DTD. 5TH SEPTEMBER 2007 PUBLISHED IN THE NEW INDIAN EXPRESS, THIRUVANANTHAPURAM EDITION. EXT.P53: COPY OF LETTER DTD. 27TH SEPTEMBER 2007 EXTENDING THE VALIDITY OF THE TENDER. EXT.P54: COPY OF LETTER DTD. 27TH SEPTEMBER 2007 EXTENDING THE VALIDITY OF THE BANK GUARANTEES. EXT.P55: COPY OF LETTER DTD. 29TH SEPTEMBER 2007 ISSUED BY RESPONDENT NO.1. EXT.P56: COPY OF RE-TENDER NOTICE DTD. 8TH OCTOBER, 2007 ISSUED BY RESPONDENT NO.1. EXT.P57: COPY OF THE SUMMARY STATEMENT WHICH SHOWS THE UNDISPUTED DECISIONS/STEPS/TIME TAKEN FOR SCRUTINY, EVALUATION, PRE-QUALIFICATION AND THE AWARD OF THE PROJECT AFTER PRICE ESCALATION/ADJUSTMENT FROM THE YEAR 1998 TO 2006. 1ST RESPONDENTS' EXHIBITS: EXT.R1(A): COPY OF BID DOCUMENT FOR THE EXECUTION OF ATHIRAPALLY H.E.PROJECT ON TURN KEY BASIS WITH FINANCIAL PACKAGE. VOLUME 1 (COMMERCIAL). EXT.R1(B): COPY OF CHIEF ENGINEER (CIVIL) CONSTRUCTION LETTER NO. CEGN/DE/39/10/1393 DTD. 29/09/07. EXT.R1(C): COPY OF LETTER NO.324/B2/06/PD DTD. 23/08/2007 OF THE 2ND RESPONDENT. EXT.R1(D): DOCUMENTS REFERRED IN EXT.R1(C) DTD. 22/08/07. EXT.R1(E): EXTRACT OF THE FULL BOARD DECISION DTD. 18/07/2007. /TRUE COPY/ P.A.TO JUDGE Kss S. Siri Jagan, J. =-=-=-=-=-=-=-=-=-=-=-=-=-= W. P (C) No.31044 of 2007 =-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 1st January, 2008. J U D G M E N T An important issue of considerable public importance in the matter of award of contract for construction of a hydro-electric project in the State of Kerala arises in this case. The issue involved is the sustainability of the decision of the Kerala State Electricity Board to re-tender the contract of execution of the Athirapally Hydro-Electric Project of the KSEB, reversing their earlier decision to award the contract to the Consortium consisting of the petitioner and the 3rd respondent, who was earlier selected six years ago in a global tender, after giving price escalation computed in accordance with the formula suggested by the Government of India Undertaking, Water and Power Consultancy Services (India) Ltd., (WAPCOS) taking into account the rise in costs from 2001, even at the risk of the likelihood of the bid price in a fresh global tender going substantially higher than the escalated price as per the formula suggested by the WAPCOS. The facts necessary for the disposal of the writ petition may be summarised below: W.P.C. No.31044/07 -: 2 :- 2. The 1st respondent Kerala State Electricity Board invited global tenders for the project work of Design, Build and Turnkey execution with financial package of Athirappally Hydro- Electric Project, by notification inviting tenders dated 6.6.1998. 117 sets of pre-qualification bids were issued globally. The pre- qualification committee appointed by the KSEB pre-qualified 4 tenderers including the Consortium consisting of the petitioner and the 3rd respondent, (hereinafter referred to as 'the Consortium') out of the 8 tenderers who submitted tenders on 3.11.1998. Bid proposals were invited from the 4 pre-qualified bidders by tender notice dated 4.12.1999. The Consortium submitted their bid on 15.4.2000. Out of the four pre-qualified bidders, only two submitted price bids, namely the Consortium and the Chinese joint venture of CWAEC-CMFE. The bid of the Consortium was the lowest and the Consortium was declared the lowest bidder. On 27.4.2000 a scrutiny committee of the KSEB appointed a Technical Committee to study the technical aspects of the bid. The financial aspects of the price bid were separately examined by a Financial Scrutiny Committee headed by the W.P.C. No.31044/07 -: 3 :- Financial Adviser and Chief Internal Auditor of KSEB. On 17.10.2000, the tender evaluation committee, after evaluating the reports of all committees, decided to have further discussions with the Consortium on reducing the rates and other aspects. In the meeting dated 25.10.2000 of the Full Time Members of the KSEB, detailed discussions were held on the report of the Tender Evaluation Committee and it was decided to recommend to the Full Board to award the work to the Consortium. The Full Board in the meeting held on 25.10.2000 itself decided to form a committee nominated by the Board to put up specific proposals regarding the rates with reference to the bill of quantities for each item of work after asking the Consortium to withdraw all deviations from tender conditions. The Committee was constituted on 3.11.2000, who submitted their report on 27.11.2000. The committee held discussions with the Board pursuant to which the Consortium agreed to extend the validity period of the offer up to 31.1.2001, with a discount of Rs.50 lakhs and to withdraw deviations from the tender conditions. On 2.1.2001 the Full Time members of the Board placed the matter before the Full Board of the KSEB. The W.P.C. No.31044/07 -: 4 :- Full Board met on 3.1.2001 and decided to award the work to the Consortium at the price of Rs.414,22,04,500/-. By order dated 6.1.2001, the KSEB accorded sanction to award the work to the Consortium without financial package at the said price. 3. Three Public Interest writ petitions, namely, O.P.Nos.1774/01, 3581/01 and 7713/01 were filed before this court against the project on the ground of want of proper environmental clearance, in which the award of the contract to the Consortium was also challenged. At the request of the KSEB, the Consortium agreed to extend the validity period of the bid and the bank guarantees furnished. On 17.11.2001 by Ext.P7 judgment a Division Bench of this court set aside the environmental clearance granted by the Central Government for the project. However in that decision the Division Bench inter alia held that there was no justification for this court, to interfere with the decision of the Board to award the contract to the Consortium. On 10.2.2005 the Central Government granted fresh environmental clearance for the project. That environmental clearance was challenged before this court in W.P(C). W.P.C. No.31044/07 -: 5 :- Nos.9542/2005 and 11254/2005. On 9.5.2005, the KSEB issued Ext.P28 letter to the Consortium informing that the work is awarded to the Consortium for Rs.4,14,22,04,500/-, without financial package less a discount of Rs.50 lakhs and requested them to execute the agreement at the earliest and to start the work within 30 days of receipt of the letter. The Consortium issued Ext.P29 letter dated 10.5.2005 drawing attention of the KSEB to the various correspondence between them over the past five years, mentioned therein, which emphasised the need for refixing the original bid price of Rs.4,14,22,04,500/- after clearing environmental issues. The Chief Engineer (Civil Construction) of the KSEB, on 18.5.2005 reported to the Board the suggestion of the Consortium for a revised price of Rs.585.62 crores, taking into account escalation upto March 2005. By Ext.P30 letter dated 1.6.2005, the KSEB requested the Consortium to attend a meeting with the Full Board on 6.6.2005 to consider their request. In the said meeting the Consortium made a presentation on the escalation and their request for revision of the bid price was discussed. Another writ petition, W.P W.P.C. No.31044/07 -: 6 :- (C).No.26073/2005 was filed before this court on 9.9.2005 challenging the environmental clearance for the project. By Exts. P32 and P33 letters dated 27.6.2005 and 28.9.2005, the Consortium agreed to extend the period of validity of their bid and bank guarantees on the understanding that the impact of the economic changes which had taken place since the tender was submitted and the issues regarding completion date of the project and dispute resolution mechanism would be discussed and agreed upon before implementing the contract. 4. The Board referred the matter to the WAPCOS to ascertain the reasonableness of the request for price escalation put forward by the Consortium. In the meanwhile, the Consortium had suggested a revised price of Rs.612.84 crores taking into account the price escalation upto October, 2005. WAPCOS submitted their report computing the price of the project at Rs.570 crores taking into account escalation up to September, 2005, with a formula for calculating escalation beyond September 2005. By Ext.P34 letter dated 22.12.2005, the KSEB requested the Consortium to attend a meeting on W.P.C. No.31044/07 -: 7 :- 26.12.2005 to discuss the matter further. After discussion the KSEB agreed to place a revised price of Rs.570 crores, before the Full Board. The Full Board in its meeting on 30.12.2005 decided to issue revised letter of award to the Consortium at the negotiated price of Rs.570 crores without financial package, after obtaining Government sanction and approval by Kerala State Electricity Regulatory Commission. Accordingly, the KSEB by Ext.P36 letter dated 11.1.2006 requested the Government to approve the Board decision dated 30.12.2005. While so, by Ext.P37 judgment dated 23.3.2006 in W.P(C).Nos.11254/05, 9542/05 and 26073/05, a Division Bench of this Court quashed the environmental clearance granted on 10.2.2005 and directed the KSEB to apply for fresh environmental clearance after publishing the Environmental Impact Assessment Report and conducting a public hearing after publishing the report. By Ext.P40 letter dated 18.5.2005 the KSEB requested the Consortium to extend the validity period of their offer for a further period of 6 months from 31.6.2007, since the revised clearance from the Government of India for the project is W.P.C. No.31044/07 -: 8 :- pending, which the Consortium agreed on the understanding that the agreed project cost would be suitably discussed and mutually agreed upon before the implementation of the work. By Ext.P39 dated 18.7.2007, the Government of India granted fresh Environmental clearance for the project. On 10.8.2007, the Government again wrote to the Government of Kerala requesting to communicate orders on the approval of the decision of the Board dated 30.12.2005 as requested in Ext.P36 letter dated 11.1.2006. By Ext.P50 letter dated 20.8.2007, the Consortium requested the Board for implementation of the project work after taking into consideration price adjustment updated to the date of commencement of work, copy of which was forwarded to the Government of Kerala also. By Ext.P51 letter dated 5.9.2007, the Government informed the Consortium that Ext.P50 has been forwarded to the KSEB for necessary action. In the meanwhile the Consortium extended the period of validity of its offer and the bank guarantees upto 31.12.2007, at the request of the KSEB. While so, on coming across Ext.P52 news item in the New Indian Express dated 5.9.2007, to the effect that the KSEB has decided W.P.C. No.31044/07 -: 9 :- to re-tender the work, the petitioner filed this writ petition on 29.9.2007 challenging the decision to re-tender the work. Apparently on the same day, by Ext.P55 letter dated 29.9.2007, the Board cancelled Ext.P28 order dated 9.5.2005 and by Ext.P56 tender notice dated 8.10.2007, fresh tenders were invited for the project. The petitioner therefore amended the writ petition incorporating additional facts, averments and reliefs. The petitioner, accordingly, seeks the following reliefs as per the amended writ petition: a) It is therefore humbly prayed that this Hon'ble Court be pleased to issue a Writ of Prohibition or any other appropriate writ, order or direction in the nature of prohibition to prohibit the Respondent Nos. 1 and /or 2 from re-tendering the Project Work (i.e. the work of Design-Build and Turnkey execution of Athirappilly Hydro Electric Project (163 MW) which includes the construction of a dam at Athirappally, in the State of Kerala, across the Chalakudy River); (a1) this Hon'ble Court be pleased to issue a Writ of Certiorari or any other appropriate writ, order or direction in the nature of certiorari to call for the records of the case and after going into the same to strike down and set aside the said letter dated 29th September, 2007 (being Exhibit P55 to the Petition) and the said Re-Tender Notice dated 8th October, 2007 (being Exhibit P56 to the Petition), as also the said decision dated 22nd August, 2007 and the said letter dated 23rd August 2007 (being Exhibits P50A and P50B respectively to the Petition) and quash and cancel the same. b) this Hon'ble Court be pleased to issue a Writ of Mandamus or any other appropriate writ, order or direction in the nature of W.P.C. No.31044/07 -: 10 :- mandamus to direct the Respondent Nos.1 and /or 2 to forthwith permit the Consortium (i.e. the Petitioner and the Respondent No.3) to effectually implement the Project Work, after price adjustment updated to the date of commencement of the Project Work and to direct the Respondent No.1 to accordingly issue instructions to the Consortium for commencing the Project Work; c) issue a writ of mandamus or any other appropriate writ order or direction, directing the Respondent Nos. 1 and 2 to take appropriate steps: i) to appoint Water And Power Consultancy Services (India) Limited (WAPCOS), or such other agency as this Hon'ble Court may deem fit, to arrive at the price of the Project Work, updated to the date of commencement of the Project Work; ii) to permit the Consortium to effectually implement the Project Work, after price adjustment updated to the date of commencement of the Project Work and to direct eh Respondent No.1 to accordingly issue instructions to the Consortium for commencing the Project work;” 5. The petitioner raises four contentions. The first is that the reversal of the well considered decision of the statutory body, which the KSEB is, to accept the negotiated price offered by the Consortium for execution of the work, by directing re-tender is arbitrary, unreasonable and violative of Article 14 of the Constitution of India. The second is that since admittedly on re- tender the bid amount is likely to go substantially higher than the negotiated price offered by the the Consortium, and since the W.P.C. No.31044/07 -: 11 :- Consortium alone can start the work before the expiry of the Techno-economic clearance on 31.3.2008, in the event of expiry of which fresh clearance has to be obtained forcing postponing of the work and resulting in further loss to the exchequer, public interest demands that the earlier decision taken by the Board to award the contract to the Consortium at the negotiated price be implemented. The third is that since the Consortium has altered its position to its prejudice relying on the promise held out by the KSEB, the action of the KSEB is hit by promissory estoppel. The last is that the principles of legitimate expectation require the KSEB to act in accordance with its original decision to award the contract to the Consortium for the negotiated price as per the formula suggested by the WAPCOS. 6. In answer, the KSEB and the Government of Kerala in their counter affidavits raise the following contentions: Being a contractual matter involving interpretation of the terms of a contract, this Court shall not interfere with the decision of the Board, in exercise of powers under Article 226 of the Constitution of India by entertaining the writ petition which is W.P.C. No.31044/07 -: 12 :- not maintainable in law. Secondly, the earlier offer was cancelled invoking the terms of the tender conditions, because of the failure on the part of the Consortium to comply with the stipulations in the order dated 9.5.2005. Thirdly, the earlier decision of the Board was cancelled and re-tender was ordered for valid reasons. Fourthly, in the matter of award of contract of such magnitude it is necessary to have transparency in public interest and therefore re-tender serves public interest. There was no promise held out by the Board to the Consortium at any time which would give rise to any claim of promissory estoppel or legitimate expectation in the Consortium so as to bind the Board by such principles and to force the Board to award the contract to the Consortium on any terms. The Consortium having submitted their bid for Rs.414 crores they are not entitled to alter that bid price, which is prohibited by the tender conditions and they having sought escalation of price contrary to the tender conditions, the Board is perfectly within their rights to cancel the bid and to go for re-tender, as has been done by them. 7. Since, in view of the facts disclosed, an early disposal W.P.C. No.31044/07 -: 13 :- of this writ petition is of vital importance to this power starved State, this writ petition was given priority of hearing and was heard at length. I have considered the rival contentions in great detail with reference to the pleadings, documents and the case law cited on the subject, with the anxiety the subject matter demands. 8. The broad facts as stated in the writ petition reproduced as above are not disputed by respondents 1 and 2. In fact the same are corroborated by Ext.P36 letter of the Board themselves written to the Government of Kerala seeking approval of the decision of the KSEB to award the contract to the Consortium at the price suggested by WAPCOS. They only justify their action as it is, on alleged legal principles. Since respondents 1 and 2 contest the maintainability of this writ petition itself, I shall first deal with that issue. 9. According to the respondents 1 and 2, the Board was forced to cancel the order dated 9.5.2005 (Ext.P28) by which the contract was awarded to the Consortium, because the Consortium failed to execute the agreement and start work within W.P.C. No.31044/07 -: 14 :- the 30 days stipulated therein in accordance with clause 15 of Ext.P1 tender conditions. They further submit that as per the tender conditions, the bidder is not permitted to modify his bid under any circumstances, which the Consortium had done by demanding price escalation which also justifies cancellation of the award of contract to the Consortium. Since, for granting the prayers in the writ petition, it would be necessary to interpret the clauses in the bid documents and inter-se rights between the parties in relation to such clauses, in view of the decision of the Supreme Court in KSEB v. Kurien E. Kalathil [(2006) 6 SCC 293], this writ petition is not maintainable, as the disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to usual principles of Contract Act in a suit, especially since the present contract is not a statutory contract, is the contention of the 1st respondent in this regard. 10. According to the petitioner, they are not seeking enforcement of terms of any contract. They would submit that the KSEB being a statutory body, there is a public law element in all their actions and such actions shall be free from arbitrariness W.P.C. No.31044/07 -: 15 :- and unreasonableness. Their contention is that since the KSEB had taken a well considered decision on 30.12.2005 to accept the negotiated price suggested by the Consortium as verified by the WAPCOS and sought approval of the Government for the same, the sudden turn around to decide to re-tender and cancel the award of contract to the Consortium, is arbitrary and unreasonable and violates the mandates of Article 14 of the Constitution of India and such arbitrary action is amenable to the writ jurisdiction of this Court. In support of their contention, they rely on the decision of the Supreme Court in Shrilekha Vidyarthi v. State of U.P (AIR 1991 SC 537) and a Division Bench decision of this Court in Hindustan Construction Co. LTD v. K.S.E.B. [1999 (2) KLT 30] which was confirmed by the Supreme Court in K.S.E.B v. Hindustan Construction Co. LTD. (AIR 2007 SC 425) as also other decisions of the Supreme Court. 11. At the outset I note that the KSEB is taking an inconsistent stand in this case. In their counter affidavit, the KSEB categorically and repeatedly admits that there is no W.P.C. No.31044/07 -: 16 :- concluded contract between the parties. At the same time they contend that since the case involves interpretation of covenants in a contract, the writ petition is not maintainable. Since admittedly there is no concluded contract, the question of interpretation and implementation of a clause in a contract does not arise in this case. That is what is frowned upon by the