Why Himachal Bhawan in Delhi to be auctioned for recovery of Rs 150 crore | Explained
Himachal Bhawan auction: The Himachal Pradesh High Court has ordered the attachment of the Himachal Bhawan in Delhi for the recovery of Rs 150 crore.
Himachal Bhawan auction: The Himachal Pradesh High Court has ordered the attachment of Himachal Bhawan in Delhi after the state government failed to pay Rs 150 crore to the Seli Hydropower Electrical Company. Passing the order on Monday (November 18), a single-judge bench of Justice Ajay Mohan Goel said the company may take appropriate steps for the auction of Himachal Bhawan located in central Delhi's Mandi House area thereof.
Embarrassment for Himachal govt
In an embarrassment for the government, the court has not only ordered the attachment of Himachal Bhawan in Delhi but also directed the principal secretary (Power) to order a fact-finding inquiry to identify the officers responsible for the lapse and sought its report within 15 days before the next hearing on December 6.
Advocate General Anup Rattan said the Himachal Pradesh government has already filed an appeal against the HC order which is likely to come up for hearing this month.
Notably, due to the delay in payment, the amount has increased to Rs 150 crore with the accumulation of seven per cent interest from the date of filing of the petition.
CM Sukhu on court's order
Reacting to the order, Chief Minister Sukhwinder Singh Sukhu dismissed criticism on the issue and asserted that the state government would protect the state's interests. "Depositing Rs 64 crore is not a big thing for the state government but we are fighting a legal battle," he told media persons.
In a statement issued on Tuesday evening, the CM said that his government would take appropriate legal measures. "The state government would advocate this case vigorously to protect the interests of the state," he said.
Expressing concern on this issue, former Chief Minister Jairam Thakur said, "The High Court order came on January 13, 2023, but the government did not take it seriously. This is a very serious issue for Himachal Pradesh and if such conditions continue, Himachal Bhawan may be auctioned." He said that due to the delay in payment of the premium of Rs 64 crore related to the Seli Hydroelectric Project, this amount has now increased to about Rs 150 crore.
Thakur warned that if the government does not take the court orders seriously, not only Himachal Bhawan but also the Secretariat may be auctioned.
What is the matter?
The case pertains to the 340 MW Seli Hydropower Electric Project on the Chenab River in Lahaul and Spiti district. The state government awarded the project to Seli Hydro Electric Power Company Limited/Moser Baer and issued the Letter of Allotment (LOA) on February 28, 2009, following which the firm deposited the upfront premium of Rs 64 crore.
However, the project did not materialise. The state government cancelled the LOA and ordered forfeiture of the upfront premium.
The company challenged the decision before an arbitrator ruled, which ruled in its favour, directing the state to return the premium with interest. After the government failed to comply, the firm moved to the high court under Article 226.
The court found merit in the petitioner's contention that the project had become technically and financially unviable and its prayer for withdrawing from it deserved to be allowed. The high court also upheld the decision of the arbitrator on January 13, 2023, and directed the government to deposit the upfront premium with interest with the Registry.
The delay in payment caused the amount to escalate to Rs 150 crore, including a seven percent interest, prompting the high court's attachment of Himachal Bhawan to ensure recovery.
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