Enron was a learning experience, an American associated with the Dabhol Power Company once said. It promises to be a continuing education for Indians. By its ruling last Friday dismissing the CITU’s public interest petition, the Supreme Court appears to have closed the door with some finality on questions about the validity of the power project. But its decision to examine the related matter of the Maharashtra Government’s series of contradictory stances on Enron keeps the issue alive. In effect, DPC will be free to carry on building the power station and raising funds for Phase II but the government which first scuttled the project and later restarted it will have to explain itself in court. The confusion apparent here is unavoidable.

Following the Bombay High Court ruling in 1995 on the Ramdas Nayak petition, every subsequent judgment has had the effect of treating the Enron contract as a closed chapter. The main reasons are that the courts are not competent to review commercial aspects of executive decisions, the absence of competitive bidding does not by itself establish mala fide, it was not proved that government procedures were flouted and the principle of res judicata bars repetitious litigation. Although Enron’s legal history will give rise to endless disputes among jurists and others, what is established is that the courts, if not politicians, recognise the sanctity of commercial contracts. That leaves the Manohar Joshi Government to face the music and it is right that it should, given its appalling record of duplicitousness on the whole Enron business.

The Bombay High Court has already castigated the government severely in its 1996 judgment. Pointing out that the government misled the people and the courts and placed political advantage above public interest, the court described the government’s performance as reprehensible. However, the question of whether perjury was involved was left open. The three-judge Supreme Court bench now says it is “satisfied” it should go into the accountability of people in authority in view of the changing stances of the Government of Maharashtra on Enron. The whole process of fixing responsibility is bound to be very illuminating not only for Maharashtra but beyond. One essential lesson to be learned by politicians is about the principles that govern commercial contracts. How much damage has been done to the economy and the country by blowing hot and cold with Enron can be seen from the near freeze in foreign investment in the power sector.

Maharashtra itself has felt the impact over a larger front. Beyond that there is the question of the integrity of a government’s word, whether given in the Assembly, from public platforms or in court. The Supreme Court’s decision to go into the question of accountability in all these areas will have far-reaching effects. It is in the interests of good governance and will, therefore, be widely welcomed.