Express termination clauses prevail over implied breach conditions, and post-termination tariff disputes go to the regulatory commission.

An express contractual termination clause cannot be narrowed by implying a requirement that both parties agree on breach, where the plain text allows termination by either party on non-fulfilment of conditions subsequent. The Court gave effect to the specific clause requiring execution of a fuel supply agreement within time and held that the termination notice was valid, because reading in a prior mutual agreement on default would rewrite the contract and make the clause redundant. After upholding termination, the tariff payable post-termination was left to the statutory regulatory mechanism, with the dispute remitted to the Central Electricity Regulatory Commission for determination and related adjustments.

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Issues: (i) Whether the appellant was entitled to terminate the power purchase agreement under the clause dealing with non-fulfilment of conditions subsequent, and whether the appellate tribunal was right in reading into that clause a requirement that both parties must agree on the alleged default; (ii) Whether the dispute relating to tariff payable after termination should be left to the Central Electricity Regulatory Commission for determination under the statutory tariff framework.

Issue (i): Whether the appellant was entitled to terminate the power purchase agreement under the clause dealing with non-fulfilment of conditions subsequent, and whether the appellate tribunal was right in reading into that clause a requirement that both parties must agree on the alleged default.

Analysis: The agreement was construed on its plain language and as a whole. The clause governing conditions subsequent required execution of a fuel supply agreement within the stipulated time, and the termination clause expressly conferred a right of termination on either party upon non-fulfilment of those conditions, with liquidated damages payable by the seller. The Court held that the appellate tribunal's introduction of a prior agreement between the parties regarding breach would amount to rewriting the contract and would render the specific termination clause otiose. The specific clause dealing with non-fulfilment of conditions subsequent prevailed over the general default provisions, and the surrounding record showed that the bid was made on the basis of coal supply commitment and that the procurer and the State were aware of that basis.

Conclusion: The appellant was entitled to invoke the termination clause, and the notice terminating the agreement was legal and valid.

Issue (ii): Whether the dispute relating to tariff payable after termination should be left to the Central Electricity Regulatory Commission for determination under the statutory tariff framework.

Analysis: Once the termination was held valid, the question of compensatory tariff required determination with reference to the statutory tariff mechanism and relevant regulations. The Court declined to undertake the exercise itself and held that the appropriate course was to remit the tariff determination to the regulatory commission, with adjustments to be worked out against amounts already paid and liabilities arising under the contract.

Conclusion: The tariff dispute was to be determined by the Central Electricity Regulatory Commission under the Electricity Act framework.

Final Conclusion: The appeal succeeded, the termination of the agreement was upheld, and the parties were relegated to the statutory tariff forum for determination of compensation and related adjustments.

Ratio Decidendi: An express contractual termination clause cannot be narrowed by implying a condition that contradicts its text, and a specific contractual mechanism for termination and liquidated damages prevails over general default provisions when both are capable of distinct operation.

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