Shimla, March 17 (IANS) The Supreme Court has issued notice to the Himachal Pradesh government for cancelling a multimillion dollar hydropower project in Kinnaur district awarded to Dutch firm Brakel Corp and inviting fresh bids.

Authorities here Wednesday said the apex court issued the notice on March 15 after hearing an appeal filed by Brakel.

The firm had challenged an earlier ruling of the Himachal Pradesh High Court, which on Oct 7, 2009 had ordered cancellation of the allotment of the 960 MW Thopan-Powari-Jangi hydropower project to Brakel on a petition filed by Reliance Infrastructure, one of the bidders.

'We allow the writ petition and quash the decision of the council of ministers dated November 25, 2008, as being arbitrary, illegal and irrational,' the high court had said.

A division bench had ruled that in view of the 'misrepresentation made by Brakel, the allotment of the two projects Jangi Thopan and Thopan Powari of 480 MW each, which were later combined into one project, was illegal and is bound to be cancelled'.

'We further hold that for the reasons stated above the allotment of the above said projects in favour of Brakel is liable to be cancelled and accordingly cancel the same. The state is directed to take fresh decision as to whether it wants to re-advertise the said projects or it wants to act on the basis of the old tender,' said the high court.

Subsequently, the state government decided to invite fresh bids for the projects. It even imposed a penalty of Rs.280.69 crore ($60 million) on Brakel for delaying the implementation of the project.

The Supreme Court division bench of Justices H.S. Bedi and Aftab Alam has referred the case to the division bench of Justices Aftab Alam and B.S. Chauhan as they have substantially heard the matter.