Facts
The petitioner was issued a Letter of Award dated 1 June 2026 for Cluster-C under the Tariff Based Competitive Bidding mechanism for implementing a Standalone Battery Energy Storage System at various locations/sub-stations of the respondent-UPCL.
Source reference: p.1, para. 2By communication dated 31 August 2026, the Superintending Engineer informed the petitioner that the Letter of Award had been cancelled with immediate effect.
Source reference: p.1, para. 2The petitioner challenged the cancellation on the grounds that no show-cause notice or opportunity of hearing had been provided and that the order was non-speaking.
Source reference: p.1, paras. 2–3UPCL stated that the cancellation followed the petitioner’s refusal to agree to reduced rates, while conceding that no notice or hearing had been afforded.
Source reference: p.2, para. 4UPCL also contended that the petitioner had applied for Clusters A and B under a fresh RFP but not for Cluster-C.
Source reference: p.3, para. 6Issues
Whether UPCL could cancel the Letter of Award without issuing a show-cause notice or providing the petitioner an opportunity of hearing
Source reference: p.1, para. 3; p.2, paras. 4–5Whether the communication cancelling the Letter of Award was unsustainable for being non-speaking and for failing to disclose reasons
Source reference: p.1, para. 3; p.2, para. 5Whether, pending reconsideration, further proceedings under the fresh RFP for Cluster-C should remain in abeyance
Source reference: p.3, para. 8Law Applied
The Court applied the principles of natural justice, particularly audi alteram partem, requiring that a person affected by an adverse administrative decision be given prior notice and a reasonable opportunity to respond.
Source reference: p.2, para. 5It further applied the requirement that an administrative order adversely affecting legal or legitimate interests must be reasoned or speaking.
Source reference: p.2, para. 5The Court also recognised that issuance of a Letter of Award generated a legitimate expectation that it would be followed by formal execution of the contract, and that such expectation could not be defeated without procedural fairness.
Source reference: p.2, para. 5No specific statutory provision or judicial precedent was cited in the judgment.
Source reference: no citationReasoning
Once UPCL issued the Letter of Award, the petitioner acquired a legitimate expectation that the award would ordinarily proceed toward formal execution of the contract.
Source reference: p.2, para. 5Cancellation of the award, particularly on the alleged ground that the petitioner had declined to reduce its rates, adversely affected the petitioner’s interests.
Source reference: p.2, para. 5Accordingly, UPCL was required to issue notice and provide an opportunity to explain its position before taking the decision.
Source reference: p.2, para. 5UPCL’s concession that no notice or hearing had been provided established a violation of natural justice.
Source reference: p.2, para. 4Further, the impugned communication disclosed no reasons for cancellation, making it a non-speaking order and independently unsustainable.
Source reference: p.2, para. 5The contention regarding the petitioner’s participation in the fresh RFP for Clusters A and B, but not Cluster-C, did not cure these procedural defects.
Source reference: p.3, paras. 6–7Holding
The Court held that cancellation of the Letter of Award without prior notice, hearing, and disclosure of reasons violated the principles of natural justice.
The impugned communication dated 31 August 2026 was therefore quashed.
Source reference: p.3, para. 7UPCL was directed to issue a show-cause notice to the petitioner within 24 hours, allow three days for response, and thereafter pass a fresh order.
Source reference: p.3, para. 7Until the fresh order was passed, further proceedings under the fresh RFP concerning Cluster-C were directed to remain in abeyance and thereafter abide by the fresh decision.
Source reference: p.3, para. 8The writ petition was accordingly disposed of, and any pending application was also disposed of.
Source reference: p.4, paras. 9–10Original Court PDF
KUNDAN GREEN ENERGY PRIVATE LIMITEDvsUTTARAKHAND POWER CORPORATION LIMITED
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