Himachal Pradesh High Court Orders Attachment Of Himachal Bhawan In Delhi Over Unpaid Dues—Here's What Has Happened So Far

The Himachal Pradesh High Court ordered the attachment of Himachal Bhawan, the state’s premier guesthouse located at 27 Sikandra Road in New Delhi, due to unpaid dues owed to Seli Hydro Electric Power Company.

The court also directed the state’s multi-purpose projects and power departments to conduct an inquiry to determine which officials were responsible for failing to deposit the Rs 64 crore arbitration award, along with a 7 per cent interest, as mandated by the court.

Justice Ajay Mohan Goel, who issued the order, emphasised the need to identify those accountable for the delay, noting that the interest amount would be recovered from the guilty officers and employees.

The inquiry, which must be completed within 15 days, is to identify the officials responsible for failing to make the payment. A report on the inquiry will be presented at the next hearing, scheduled for 6 December.

In the order, the court stated that to execute the arbitration award, Himachal Bhawan at Sikandra Road would be attached, and the petitioner, Seli Hydro Electric Power Company, could take the necessary steps to auction the property.

The case stems from a dispute over a power project awarded to Seli Hydro Electric Power Company in 2009. The company was allotted a 320 MW hydroelectric project in the Lahaul and Spiti district of Himachal Pradesh, with the Border Roads Organisation assigned to assist with road construction.

According to the agreement, the state government was to provide basic facilities to help the company initiate the project on time. However, the company claims these facilities were not provided, causing significant delays that ultimately forced the company to abandon the project.

In response to these issues, Seli Hydro Electric filed a writ petition in the Himachal Pradesh High Court in 2017. The company argued that the failure to provide the necessary infrastructure had forced it to abandon the project, and as a result, the state government took back the upfront premium that the company had paid.

The court heard both sides and, on January 13, 2023, ordered the government to return the Rs 64 crore upfront premium. However, the government appealed the decision through a letters patent appeal, which led to the division bench staying the order, provided that the government deposited the arbitration award in court.

When the government failed to deposit the amount, the division bench lifted the stay on 15 July 2024 and upheld the original order to return the upfront premium to the company.

The court emphasised that no interim orders had been issued in favor of the state, and thus, the arbitration award must be enforced. The court also noted that the government's failure to deposit the arbitration amount was leading to daily interest accrual, which would ultimately have to be paid from the state treasury.

The order has sparked political controversy, with the opposition Bharatiya Janata Party (BJP) criticising the Sukhvinder Singh Sukhu-led Congress government for mishandling the situation.

BJP leaders, including Leader of Opposition Jairam Thakur, accused the government of failing to protect the interests and property of Himachal Pradesh. Thakur also raised concerns about the potential future consequences, questioning the efficiency of the state’s law department and alleging that it failed to properly represent the state’s case in court.

He warned that if the situation continued, other state properties, including the Vidhan Sabha building and the state secretariat in Shimla, could also face attachment by the courts.

Chief Minister Sukhvinder Singh Sukhu responded to the criticism, stating that he had not yet reviewed the court’s order. He clarified that the upfront premium was governed by a policy set in 2006, which he had helped to formulate.

He explained that the government had set a reserve price for each megawatt of the hydroelectric project, and the arbitration had decided the matter of the upfront premium. The government had challenged the arbitration order in the high court, and as per the court's directive, the Rs 64 crore was to be deposited.