In Public Function Matters Like Electricity Supply No Ex Parte Stay Must Be Given, Vacation Plea Must Be Decided Expeditiously: Rajasthan HC

The Jaipur bench of the Rajasthan High Court ruled that in matters that affect supply of public services like electricity to the consumers in the State, ordinarily ex-parte interim order ought not to be granted, and even if it was granted, the application for vacating the stay is required to be considered expeditiously.

The observation came in appeal filed against a June 25 interim order of the Vacation Judge wherein an ex-parte interim stay was granted in favour of respondent no. 1 Somi Conveyors Beltings Limited, restraining the appellant Rajasthan Vidyut Vitran Nigam Limited from issuing work order to the lowest bidder–respondent no. 2 NRC Industries Private Limited for supply of conveyer belts which is essential for supplying electricity in the state.

In doing so, the court observed that procurement of conveyor belts–which it noted had been delayed by six months, is absolutely essential to ensure continuous supply of coal leading to production of electricity and uninterrupted supply thereof to the consumers in the State. It said that it was unfortunate that the appellant which carried out "public functions" had to run from pillar to post just to get his plea for vacation of stay considered.

A division bench of Chief Justice Manindra Mohan Shrivastava and Justice Ashutosh Kumar in its order said, "Present is an intra-court appeal and therefore, it is clearly maintainable. It is unfortunate that the appellant, which is a Corporation enjoined with public functions for supply and distribution of electricity which is running from pillar to post only to seek indulgence on its application for vacating stay. The learned Vacation Judge passed an ex parte interim order on 25.06.2024. Though the appellants filed an application for vacating stay on 10.07.2024, the application remained pending despite requests made so much so that the appellants had to approach this Court by filing appeal against the exparte interim order".

The court noted that while initially it was not inclined to decide the appeal on merits because the application for vacation of stay was pending consideration; the court had disposed of the appeal with a request to the Single Judge to decide the application for vacation of stay expeditiously. However, the court said that since the application has not been decided, the appellants had again sought the court's indulgence.

The bench then said that once an ex-parte interim order passed and as soon as the application for vacating stay is filed, the application is required to be decided one way or the other "expeditiously and it cannot be allowed to remain pending for a long time".

"It is relevant to note here that in the present case, the respondent/writ petitioner has challenged award of contract in the matter of procurement of conveyor belts. Learned counsel for the appellants has rightly brought to the notice of this Court that timely procurement of conveyor belts is absolutely essential to ensure continuous supply of coal leading to production of electricity and uninterrupted supply thereof to the consumers in the State. Therefore, in such matters, ordinarily ex-parte interim order ought not to have been granted and even it was granted, the application for vacating stay was required to be considered expeditiously or the writ petition itself ought to have been decided finally. We find that the interim order passed on 10.06.2024 has remained operative which is resulting in delay in procurement of conveyor belts," the court underscored.

It was the case of the appellants that the award of letter of intent in favour of the lowest bidder was challenged by the respondent no. 1 by way of a writ petition in which the Vacation judge passed the interim order without hearing the appellants and without material facts brought to its notice. An application for vacating this stay was filed by the appellants before a single judge of the Court which was not heard despite repeated prayer. Hence, appeal was filed before the division bench of the Court.

The counsel for the appellants argued that the case pertained to awarding work order for supply of conveyer belts which were very essential for transportation of coal to boiler in thermal plant. Owing to the stay order and failure on part of the appellants to procure the conveyer belts would lead to stoppage of thermal power production, obstructing the supply of electricity in the State which would be contrary to public interest.

However, the appellant contended, the Single judge failed to appreciate that the Vacation Judge should not have passed the stay without hearing the appellants. Appellants also relied on the Supreme Court case of N.G. Projects Ltd. v Vinod Kumar Jain & Ors. (2022) to argue that it had been reiterated by the Apex Court that in matter of public projects, injunction should not be granted lightly. It was thus argued that that even after filing an application for vacating stay, the appellant's application has not been heard till date and therefore, the appellant–"which is a public functionary", was left with no option but to challenge the ex-parte interim order by way of appeal.

Meanwhile the respondent no. 1 argued that the appellants instead of pressing their application for vacating stay, have time and again sought indulgence of the appellate court, which is not proper. The appellants' remedy is to press their application for vacating stay before the learned Single Judge, it added. It was also argued that anappeal against interim order is not maintainable in view of provisions contained under Rule 134 of the Rajasthan High Court Rules, 1952, as the order passed by the Vacation Judge is not a final order nor can be said to be a judgment. It was also argued that respondent no. 2 is not eligible as it could not be declared as NTPC approved vender during any of the last three financial years.

Observing that the interim order needs to be interfered with the Court referred to the Supreme Court's observations in the N.G Projects case–relied upon by the appellants, in which certain infrastructure project was involved where the top court had said:

“A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good. The grant of interim injunction by the learned Single Bench of the High Court has helped no-one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone.”

In this background, the Court observed that the ex-parte interim stay should not have been granted and even when it was granted, it being a case of continuity of electricity production, either the application for vacating stay ought to have been decided as soon as it was filed, or the petition itself was required to be decided at the earliest.

“Continuing interim order without hearing application for vacating stay and keeping the matter pending, virtually amounts to allowing the petition. Over and above the rights of the parties, delay in procurement of conveyor belt by six months has seriously and adversely affected electricity production," the bench said.

In this light, the Court directed that the writ petition itself be finally decided within one month without any adjournment being granted to any of the parties. Directing that its order be brought to the single judge's notice within three days, the bench said that the interim order shall lose its efficacy either on the expiry of one month or decision in the writ petition (whichever was earlier).

The appeal was accordingly partly allowed.

Case Title: Rajasthan Vidyut Vitran Nigam Limited and Ors. v Somi Conveyors Beltings Limited and Ors.

Citation: 2024 LiveLaw (Raj) 364

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