In a major relief to Alfred Ford of the Ford Motor Company, the Himachal Pradesh High Court has given clearance to his upcoming multi-billion dollar Himalayan Ski Village project near the tourist resort of Manali.

The court has set aside the government order to scrap the Rs.1,581.10-crore project, being developed by Alfred Ford-promoted subsidiary Himalayan Ski Village Private Ltd, and allowed the company to get going after obtaining necessary clearances.

In a 77-page judgement, a copy of which was provided to the media Friday, Justice Rajiv Sharma observed: "It is duly established that the state government had already made up its mind to cancel the project and the issuance of notice based on the recommendations of the (state's high-power) committee was merely a ritual."

"The notice issued to the company Jan 7, 2010, is without jurisdiction and authority of law. The action of the state to issue notice is unreasonable," said the order dated June 22.

The company had moved the court against the government's show-cause notice in January 2010, which asked it to explain the reasons for not fulfilling mandatory requirements pointed out by the government.

"The state government has changed its stand by initially supporting the case of the company and now by opposing the same on the grounds which are not available to it under the law," the judge said.

Noting that the state government has a right to cancel the implementation agreement after giving the company an opportunity of being heard in case it is found that there was misrepresentation or suppression of material information by the company or in the event of breach of any of the provisions of the agreement, the court said this was not proved.

"The state has failed to satisfy the court that there was any misrepresentation or suppression of material information or breach of any of the provisions of the IA dated June 5, 2006," Justice Sharma said.

The company pleaded that the state had already signed memorandum of understanding, IA and detailed project report and argued that decision to issue the show cause notice was unilateral.

The Ford Motor Company had in April 2004 shown interest in setting up an high-end ski resort project in the Himalayas. In December 2005, the then state government headed by Virbhadra Singh entered into an agreement with the Himalayan Ski Village Company for establishing the project.

The court said it is true that the interests of the local people have to be watched scrupulously by the governmental agencies by adopting the principle of sustainable development. "There is a method prescribed. This has not been followed by the state."

The Bharatiya Janata Party (BJP) - then in the opposition and now ruling - had demanded that the project be scrapped.

When it came to power in January 2008, the BJP said the project was sanctioned by the previous Congress government in a hush-hush manner and raised doubts on the project's adverse impact on the environment and livelihood of the people.