According to a letter from the cabinet secretariat's office to the Urban Development Ministry last month, ``The (Cabinet) note has been examined and keeping in view the special circumstances and sensitivity involved in the matter, the Prime Minister has directed that all files connected with this case, including the orders of the Delhi High Court at various stages as well as advice given by HUDCO's legal counsel, be made available to the Ministry of Finance for a fresh detailed examination and for indicating their comments on the Cabinet note thereafter.''

The letter further states: ``The Prime Minister has also directed that the Ministry of Law may be advised to specifically examine the matter in the light of the grounds of all attendant litigations and comment on the proposal only after referring the matter to the Attorney General for his advice.''

Interestingly, the Prime Minister's decision was conveyed to the Urban Development Ministry around the time when moves were afoot to shift Ram Jethmalani from that ministry to the law ministry.

In June last year, Union Minister Ram Jethmalani had ordered that the guesthouse-cum-shopping complex be returned to MS Shoes. (HUDCO had earlier cancelled the allotment to MS Shoes after the latter failed to pay the second installment of the Rs 100-crore bid.)

Jethmalani's order had generated considerable controversy and brought into the open the minister's rift with the then urban development secretary Kiran Aggarwal. The latter had refused to implement the order on the grounds that the concurrence of the Ministries of Finance and Law had not been procured.

The matter was later brought to the notice of the Prime Minister, who, as a way out of the impasse, had taken the view that the issue should be brought before the Cabinet after being examined by the Finance and Law Ministries.

A draft note for the Cabinet was subsequently prepared by the Urban Development Ministry and sent to the Finance and Law Ministries for their opinion. The Finance Ministry said the decision to restore the property to MS Shoes was in order but put the ball in the Law Ministry's court by pointing out that since the matter was sub judice, it was appropriate for the latter to take a final decision.

The Law Ministry vindicated the stand taken by Jethmalani and opined that the proposal was in order. After concurrence from both the ministries, the Urban Development Ministry sent the proposal to the Cabinet in March this year so that it could be placed before it for consideration.

In 1994, HUDCO had allotted MS Shoes the guesthouse-cum-shopping complex on a payment of Rs 100 crore in three separate installments. While MS Shoes paid the first installment of Rs 40 crore in time, it did not pay the second one on time. Following this, HUDCO cancelled the allotment of MS Shoes as per the contract and also forfeited the first installment. MS Shoes later went to court against HUDCO's order and obtained a stay restraining HUDCO from re-allotting the property till the case was disposed of.

The Additional District Judge in his order said HUDCO's decision to restore the allotment and forfeit the first installment was unjustified.

Since HUDCO itself had not fulfilled its own part of the agreement which involved getting clearances for the property from the authorities.

HUDCO has challenged this order in the Delhi High Court but while admitting the petition, the court refused to stay the lower court's order. The matter is being presently being heard before the High Court.