Proposal To Revive Dharwad Power Project Shot Down

Undeterred by the rejection, state Chief Minister J H Patel has written to power minister S Venugopalachari asking him to reconsider the proposal in view of the acute power shortage in Karnataka.

The Chief Minister is learnt to have sent legal opinion of two experts to impress upon the Centre that the MoU signed between the state government and Chalais Holdings on August 3, 1992, for setting up the project was still valid.

After the signing of the MoU, the state government had reviewed it on March 18, 1993, and had decided not to pursue it. However, in view of the acute power shortage faced by the state, the Karnataka government decided to revive the MoU on November 15, 1995.

The issue was examined by the power ministry and the revival was found not acceptable as the decision to revive the MoU was taken after the Centre's cut-off date of February 18,1995, set for projects to be awarded through the MoU route.

However, according to the legal opinion obtained by the company, the MoU of 1992 is still valid.

Karnataka High Court advocate Mohammed Saifulla said, the decision on the MoU dated August 3,1992, of the Karnataka government vide its order dated March 18, 1993, has not been communicated to the company.

There is no communication from the Karnataka government to the company terminating the MoU. On the contrary, withdrawal of the earlier decision with the words `not to pursue' was mentioned for the first time in the Karnataka government order dated November 15, 1995.

The words `not to pursue' in the Karnataka government order dated March 18,1993, can only mean not to pursue along with other projects referred in the said order, but to defer the same for the time being.

G Ramaswamy, former attorney general, also concluded that the MoU was still valid for the following reasons:

The interpretation of the Centre that Karnataka did not intend to pursue the matter in view of its order dated March 18,1993, is erroneous as the order of the state government should not be read in isolation but in conjunction with the letter dated September 8, 1993, and its order dated November 15, 1995.

The order dated March 18,1993, has not been communicated to the company and therefore not binding on it. It is obvious that if the Karnataka government had ever intended invalidation of the MoU dated August 3,1992, it would certainly have communicated the same to Chalais Holdings. The absence of such a communication also confirms the fact that the Karnataka government never intended to invalidate the MoU. In this case, a decision to pursue the project of Chalais Homdings Ltd, has been taken by the Karnataka government by its order dated November 15, 1995. This, no doubt, is a clear confirmation of the validity of the MoU. This fact is further strengthened by the state government calling upon Chalais Holdings to take further steps pursuant to the MoU.