The Jammu and Kashmir and Ladakh High Court has reinforced a key legal principle: the validity of an administrative order must be assessed based on the reasons provided at the time of its issuance. The court ruled that additional justifications introduced later, such as those included in reply affidavits, cannot be used to validate an otherwise flawed decision.
In this case, Justice Sanjay Dhar quashed the cancellation of a contract awarded to M/s Mohd Asif for deep drilling and installation of hand pumps in Poonch district. He firmly stated:
"An order bad in the beginning may by the time it comes to Court on account of a challenge get validated by additional grounds later brought out. Thus, it is not open to the respondents to supply an additional ground for their impugned action by urging the same in their reply affidavit."
Background of the Case
M/s Mohd Asif was awarded a contract through allotment orders dated November 18, 2024, for deep drilling and installation of hand pumps at 23 locations in Poonch district. However, just days later, on November 26, 2024, the Executive Engineer of the Jal Shakti Department (Mechanical) issued a cancellation order citing a lack of funds.
Challenging this cancellation, the petitioner contended that the decision was politically motivated. He alleged that the cancellation was orchestrated by a Minister, whose political rival happened to be his father. He also provided documentary evidence, including RTI responses and administrative approvals, proving that funds for the project were available at the time of cancellation.
Court’s Observations
The court carefully analyzed the case and observed that the only reason cited in the cancellation letter was the alleged non-availability of funds. However, official records showed that administrative approvals had already been granted, confirming that funds were allocated for the project.
The court noted:
"Administrative approval for execution of a project is granted only once funds are available. The subsequent release of funds on BEAMS on January 1, 2025, does not alter the fact that financial provisions were in place at the time of cancellation."
Furthermore, the respondents argued that the petitioner failed to execute the agreement within seven days, as required under Clause 22 of the contract terms. However, the court pointed out that this reason was not mentioned in the cancellation letter but was introduced later in the reply affidavit. Citing the Supreme Court judgment in Mohinder Singh Gill vs. Chief Election Commissioner (1978), the court emphasized that an administrative order's validity must be judged on its original reasoning, not on justifications introduced subsequently.
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The court further stated that once a bid is accepted and allotment orders are issued, a binding contract is established. The respondents, as representatives of the state, were obligated to act fairly and reasonably in their dealings.
Quoting the Supreme Court ruling in R.D. Shetty vs. International Airport Authority (1979), Justice Dhar reaffirmed:
"State authorities, even in contractual matters, must adhere to the principles of fairness and reasonableness. Any deviation from these principles renders their actions arbitrary and legally unsustainable."
The court found that the cancellation order was arbitrary and in violation of natural justice principles, as the petitioner was not given an opportunity to be heard before the decision was made.
In light of these observations, the court allowed the writ petition and quashed the cancellation order. It directed the respondents to allow the petitioner to execute the contract per the original allotment orders and contractual terms.
Case Title: M/s Mohd Asif Vs UT Of J&K
