TaxTMI 
TaxTMI 
2022 (11) TMI 1395
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....hich was passed by the Appellant, terminating the Power Purchase Agreement (hereinafter referred to as 'the PPA', for short), which was entered into by the Appellant and the first Respondent. The review filed by the Appellant was dismissed. Hence the appeals. THE FACTS 3. The Appellant, which is "a wholly owned company of the Government of Madhya Pradesh" (as described by the Appellant in the Special Leave Petition), is responsible for the bulk purchase of electricity in the State of Madhya Pradesh for onward sale/supply to the distribution utilities (DISCOMS). The Appellant issued a request for proposal (RFP) dated 06.05.2015 for long-term procurement of 300 MW of solar energy through tariff-based competitive bidding. The bid of M/s. Sky Power Southeast Asia Holding Limited was accepted. It was declared the successful bidder for three units of 50 MW each at different tariff rates. The bidder subsequently incorporated the first Respondent, viz., M/s. Sky Power Southeast Solar India Private Limited as a special purpose company. This was for developing one project of 50 MW. The rate, which is applicable in respect of the first Respondent, was Rs. 5.109 per unit. In resp....
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....it was stated that the PPA is liable to be terminated in terms of Article 2.5.1 of the PPA. Explanation/justification if any was called for from the first Respondent. Acting on the request of the first Respondent, the Appellant granted time for response of the first Respondent till 10.03.2017. The response, which was given on 10.03.2017, reads as follows: Firstly, we are thrilled to update you that the project is under advanced construction and all equipment order for the project have been placed and construction happening on site we expect that the project will be top quality using the best equipment in the market and constructed by a top-tier EPC, for the benefit of both Sky Power and the state of MP. 1. Satisfaction of Condition subsequent regarding Construction Financing MPPMCL Comment: "Loan sanction letter of M/s. L&T Finance vide letter No. S07201A03/16-17 DATED 29.08.2016 Copy of facility agreement and affecting compliance documents as stated in above letters are required to be submitted" SKY POWER comment: reference is made to paragraph 2.1.1.(b) of the PPA, reproduced below: Sd/- D.G.M. (Commercial-3) R.0. MPM....
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....r the PPA, the Appellant had no other option but to terminate the Agreement. This led to the first Writ Petition filed by the first Respondent. The said Writ Petition, viz., Writ Petition No. 12880 of 2017, came to be allowed by the High Court by judgment dated 20.06.2018. The relevant portion of the judgment reads as follows: 2. The contract has been terminated on account of 54 days delay in achieving the first milestone i.e., procurement of land, financial closure and necessary permissions from the competent authority within 210 days from the date of execution of agreement for completing the first part of the project. The only reason to terminate the agreement is that the Petitioner has failed to achieve first milestone within 210 days though the condition of - procurement of land was modified after 210 days on 20.04.2016. The delay in achieving the first milestone is visited with penalty in terms of Clause 2.5 of the agreement. 3. Similar communication terminating the contract was set aside by this Court in Writ Petition No. 12432/2017 (Renew Clean Energy Private Limited v. M.P. Power Management Co. Limited and Anr. vide order dated 18.08.2017. In the said peti....
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....10. Shri K.M. Natraj, learned Additional Solicitor General submits that the impugned judgments are clearly unsustainable. He would firstly point out that the writ petition filed by the first Respondent is not maintainable. The PPA in question is not a statutory contract and therefore interference with the order terminating the contract was not justifiable. In this regard he drew support from the judgment of this Court in Kerala State Electricity Board and Anr. v. Kurien E. Kalathil and Ors. (2000) 6 SCC 293. He would next contend that the PPA contemplated provisions to resolve disputes. He further contended that first Respondent should have resorted, if at all, to a civil suit to claim redress. He pointed out that a writ petition is a public law remedy. The contract in question not being statutory in nature, there was no public law element so as to justify the approach Under Article 226. He would next contend that there is no basis for the High Court to have interfered at all. This is a case where broadly the contract contemplated fulfilment of conditions at two stages. The first stage related to various conditions that had to be fulfilled by the first Respondent which are describe....
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.... that what is described in the agreement as Seller's default occurs. Here is a case where the first Respondent had not actually on the ground carried out necessary installation. In this regard, he would contend that while the CEIG has given its approval, the approval was granted without the first Respondent having complied its obligations under the contract. In this regard essentially two aspects are projected. It is firstly pointed out that while the first writ petition was pending consideration, the Appellant carried out an inspection on 19.04.2018. A report ensued on 21.04.2018. It was revealed that the approval which is granted by the CEIG may not advance the case of the first Respondent as certain lacunae emerged. It was found by the inspecting team of the Appellant that in the blocks 9 and 10 (the project of 50MW consisted of 10 blocks of 5 MW each), 61 inverters were missing. It was further revealed that in regard to 258 invertors, there was duplication of numbers. In other words, without there being the professed numbers of invertors as required under the contract, the approval of the CEIG was procured. In fact, this aspect, which when it was discovered by the Appellant....
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....contra, Dr. A.M. Singhvi, learned Senior Counsel for the first Respondent would point out that there is absolutely no basis for maintaining the appeal in the facts. He would point out that this is a case where the first Respondent turned out to be the lowest bidder in respect of the project in question and what is more an incredible number of 182 bidders participated. It is trouncing its competitors that the holding company of the first Respondent turned out to be the lowest bidder (here we must notice that during the course of the arguments the Appellant did propose that first Respondent could come up with proposal which apparently should involve rates lower than the contract rate so that the public interest concern is adequately addressed whereas the first Respondent pointed out since it has planned for the project on the basis which made it the lowest bidder, it would not be feasible for it to reduce the rate any further). Dr. Singhvi pointed out that there is no basis for discriminating the case of the first Respondent and M/s. Renew Energy. It is pointed out that the High Court in the first round of litigation had interfered with the termination order following the judgment in....
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....cle. This, in fact, would necessarily mean that the period of 210 days would commence not from the date of the agreement but thereafter on the basis of the amended Article. The first Respondent engaged the services of a company for the purposes of purchase and installation of the parts of the project. It had procured, inter alia the invertors which were to be installed, from abroad. There are irrefutable documents in the form of invoices, bills of lading, lorry receipts which fortify the first Respondent in its stand that it had installed all the invertors. The project was ready to take off well within 24 months. The first Respondent would suffer grave avoidable financial loss, besides fall in esteem as a global player, if the termination dated 07.07.2018 is allowed to stand. Under the contract, the first Respondent was obliged to sell power at an agreed rate for a period of 25 years. The fact that in view of the play of market forces, there has been a fall in the price of solar power and it would be open to the Appellant to procure solar power at a cheaper rate should not allow the Appellant to resile from its contractual obligations. In fact, it is pointed out that the Appellant ....
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....e out the possibility of the case of theft being an afterthought. This is as the inspection was carried by the Appellant much later on 19.04.2018. It is further pointed out that as far as the duplication is concerned in the number of certain invertors, it has been established as inconsequential by the first Respondent. The inspection and the report of the CEIG cannot be lightly brushed aside on such a case. Still furthermore, it is pointed out that having regard to the massive cost of the project which stood at nearly Rs. 350 crores, what is involved is a miniscule percentage. In this regard learned Counsel would emphasise the contravention of Article 9.1 under which the Appellant was obliged to serve a notice in case of the alleged seller's default for not commissioning the project in 24 months from the date of PPA. If such a notice had been given, the first Respondent would have had an opportunity if at all even proceeding on the basis of Appellant's contention being tenable to procure invertors which are portable and available in the market and redress the problem. When the project has progressed in the manner, it had to deny the first Respondent the fruits of its labour....
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....imum time contemplated under the contract for fulfilling conditions subsequent, whether the Appellant was justified being duty bound in the matter of terminating the contract? He further pointed out that there was a distinction in the case of the first Respondent and the case of Renew Energy. In the case of Renew Energy, this Court while refusing to interfere with the judgment of the High Court had made it clear that it is not pronouncing on the question as to the delay in fulfilling the conditions subsequent and its impact. Secondly, it is pointed out that in the case of Renew Energy, the said company had gone ahead and commissioned the project and the only aspect was the delay of 16 days whereas in the case of the first Respondent the contract was liable to be terminated both for the reasons that the conditions subsequent was not fulfilled within the maximum time and also for the reason that the first Respondent had not commissioned the project within the time provided under the contract. 15. After hearing the learned Counsel for the parties, we find that the following points arise for our consideration. (1) Whether the PPA in question, is a statutory contract? ....
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....ate for the purpose of Article 12 of the Constitution of India and, quite another, to find that a contract is one which is made in the executive power of the State within the meaning of Article 162 of the Constitution. What is contemplated, is the power of the Union or the State read in conjunction with Article 73 and Article 162 of the Constitution of India, respectively. In other words, for the purpose of Article 298, the broader concept of State, as defined in Article 12 of the Constitution, which, no doubt, would include the Appellant, is inapposite and inapplicable. The Appellant, being a Company, would not be entitled to exercise the executive power contemplated in Article 162 of the Constitution, which is the power with the Union or the State Governments. In this regard we may notice that the present avtar of Article 298 is born by substituting in 1956 the original version and the present version reads as follows: 298. Power to carry on trade, etc. The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose: Pr....
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....f a Clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition Under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature. 11. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contr....
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....nilaterally alter the conditions of the contract and invite bids, held as follows: 11. It was contended by Mr. Cooper, learned Senior Counsel appearing for Appellant GBL and also by some counsel appearing for other Appellants that the Appellant/IPPs had entered into PPAs Under Sections 43 and 43-A of the Electricity Supply Act and as such they are statutory contracts and, therefore, MPEB had no power or authority to alter their terms and conditions................... ......... Merely because a contract is entered into in exercise of an enabling power conferred by a statute that by itself cannot render the contract a statutory contract. If entering into a contract containing the prescribed terms and conditions is a must under the statute then that contract becomes a statutory contract. If a contract incorporates certain terms and conditions in it which are statutory then the said contract to that extent is statutory. A contract may contain certain other terms and conditions which may not be of a statutory character and which have been incorporated therein as a result of mutual agreement between the parties. Therefore, the PPAs can be regarded as statutory only to t....
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....ransparent process of bidding in accordance with the guidelines issued by the Central Government. 25. In the PPA in question, under the definition Clause (Article 1), bidding guidelines have been defined as follows: "Bidding Guidelines" shall mean the "Guidelines for Tariff Based Competitive Bidding Process for Grid Connected Power Projects Based on Renewable Energy Sources" issued by Government of India, Ministry of New and Renewable Energy on December, 2012 Under Section - 63 of the Electricity Act and as amended from time to time; 26. We are of the view that it may not be appropriate to describe the PPA as a Statutory Contract. Section 63 of the Electricity Act, 2003 must be understood in the background of immediately preceding provision, viz., Section 62, In a paradigm shift from the earlier regime, the task of determining the tariff has been conferred on the appropriate Commission. Section 62 indicates the procedure. Section 63, on the other hand, compels the Commission to adopt the tariff determined through a transparent process of bidding. However, the transparent process of bidding must be in accordance with the guidelines issued by the Central Government. Th....
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.... commissioning, sellers' default and power of termination, are not demonstrated to be statutory in nature. What is the scope of judicial review of action by the State in a matter arising from a contract and what is the effect of the contract not being statutory? What is the concept of public law in judicial review in a contractual matter? What is 'arbitrary' action? 27. In Radhakrishna Agarwal and Ors. v. State of Bihar and Ors. (1977) 3 SCC 457 writ petitions were filed against orders of the State Government revising the rate of royalty under a lease. The contention was both against the revision of rate of royalty during the period of the lease and the cancellation of the lease on various grounds. Though an attempt was sought to draw support from the judgment of this Court in Erusian Equipment and Chemicals Limited v. State of West Bengal (1975) 1 SCC 70, the Court took the view that the said case involved discrimination at the threshold or at the time of deciding as to whether the Government should enter into the contract. The Court took the view that the only question which normally arises in such cases is as to whether the action complained of was in con....
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....egistered IInd Class hotel or restaurant and he must have at least 5 years' experience as such and if he did not satisfy this condition of eligibility, his tender would not be eligible for consideration. This was the standard or norm of eligibility laid down by Respondent 1 and since the Respondents 4 did not satisfy this standard or norm, it was not competent to Respondent 1 to entertain the tender of Respondents 4. It is a well-settled Rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This Rule was enunciated by Mr. Justice Frankfurter in Viteralli v. Saton [359 US 535: Law Ed (Second series) 1012] where the learned Judge said: An executive agency must be rigorously held to the standards by which it professes its action to be judged.... Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed.... This judicially evolved Rule of administrative l....
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....le on "The Welfare State, Rule of Law and Natural Justice" in "Democracy, Equality and Freedom" [Upendra Baxi, Ed.: Eastern Book Co., Lucknow (1978) p. 28] "substantial agreement in juristic thought that the great purpose of the Rule of law notion is the protection of the individual against arbitrary exercise of power, wherever it is found". It is indeed unthinkable that in a democracy governed by the Rule of law the executive Government or any of its officers should possess arbitrary power over the interests of the individual. Every action of the executive Government must be informed with reason and should be free from arbitrariness. That is the very essence of the Rule of law and its bare minimal requirement. And to the application of this principle it makes no difference whether the exercise of the power involves affectation of some right or denial of some privilege. This case while it dealt with the issue of arbitrariness at the stage of award of largesse by the State, it paved the way for future development in this field of law. 30. No doubt, in Bareilly Development Authority and Anr. v. Ajai Pal Singh and Ors. (1989) 2 SCC 116, the Appellant-Authority constituted under ....
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....contract has been entered into, to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. In a situation of this nature certain activities of the Respondent company which constituted State Under Article 12 of the Constitution may be in certain circumstances subject to Article 14 of the Constitution in entering or not entering into contracts and must be reasonable and taken only upon lawful and relevant consideration; it depends upon facts and circumstances of a particular transaction whether hearing is necessary and reasons have to be stated. In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 of the Constitution, and must be reasonable and can be taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to Rule of law and must be informed by reason. So, whatever be the activity of the public authority, in such monopoly or semi-....
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.... law field. It is true that there is discrimination between power and right but whether the State or the instrumentality of a State has the right to function in public field or private field is a matter which, in our opinion, depends upon the facts and circumstances of the situation, but such exercise of power cannot be dealt with by the State or the instrumentality of the State without informing and taking into confidence, the party whose rights and powers are affected or sought to be affected, into confidence. In such situations most often people feel aggrieved by exclusion of knowledge if not taken into confidence. (Emphasis supplied) 32. In the judgment of this Court rendered by a Bench of two learned Judges decided in Shrilekha Vidyarthi (Kumari) v. State of U.P. (1991) 1 SCC 212, the court was concerned with a challenge to a general order by which the appointment of all government counsel in all the districts of the state of U.P. came to be terminated. The writ petition was filed Under Article 32 of the Constitution of India. Important and apposite are the following observations: 22. There is an obvious difference in the contracts between private parties and co....
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....nothing which militates against the concept of requiring the State always to so act, even in contractual matters. There is a basic difference between the acts of the State which must invariably be in pubic interest and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not promote public interest. Viewed in this manner, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regulating the conduct of the State activity. 27. Unlike a private party whose acts uninformed by reason and influenced by personal predilections in contractual matters may result in adverse consequences to it alone without affecting the public interest, any such act of the State or a public body even in this field would adversely affect the public interest. 28. Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, we have no hesitation in saying that the ultimate impact of all actions of the State or a public b....
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.... private law. It is not a statutory contract. It is governed by the provisions of the Contract Act or maybe, also by certain provisions of the Sale of Goods Act. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. That is a matter either for arbitration as provided by the contract or for the civil court, as the case may be. Whether any amount is due to the Respondent from the Appellant-Government under the contract and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not, are all matter which cannot be agitated in or adjudicated upon in a writ petition. The prayer in the writ petition, viz., to restrain the Government from deducting a particular amount from the writ Petitioner's bill(s) was not a prayer which could be granted by the High Court Under Article 226. Indeed, the High Court has not granted the said prayer. 36. In Verigamto Naveen v. Govt. of A.P. and Ors. (2001) 8 SCC 344, the case involved, mining leases granted to a corporation and a sub-lease, which was permitted by the Government.....
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.... and Ors. (2005) 6 SCC 657, this Court was dealing with termination of services of Respondents who were working as Members of the Management, staff of the Appellant company. The Appellant company purported to terminate their services. The Respondents thereupon filed a writ petition Under Article 226 of the Constitution of India. The Appellant company contended that it was neither a public authority nor did its action involve a public law element, and a writ of Mandamus would not lie. The High Court granted only the declaratory relief to the effect that the termination was illegal. We notice the following: 30. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. But nevertheless, it may be noticed that the Government or government authorities at all levels are increasingly employing contractual techniques to achieve their regulatory aims. It cannot be said that the exercise of those powers are free from the zone of judicial review and that there would be no limits to the exercise of such powers, but in normal circumstances, judicial review principles cannot be used to enforce contractual....
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.... which serves as an admonition against considering the availability of the remedy Under Article 226 as an absolute charter to invoke jurisdiction in all cases. 28. However, while entertaining an objection as to the maintainability of a writ petition Under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs Under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corporation v. Registrar of Trade Marks ((1998) 8 SCC 1).) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said ju....
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....) 3 SCC 553] each case, however, must be decided on its own facts. Public interest as noticed hereinbefore, may be one of the factors to exercise the power of judicial review. In a case where a public law element is involved, judicial review may be permissible. (See Binny Ltd. v. V. Sadasivan [(2005) 6 SCC 657 : 2005 SCC (L&S) 881] and G.B. Mahajan v. Jalgaon Municipal Council [(1991) 3 SCC 91] 45. Of further relevance to notice is the case of the Respondent therein that only because the price of iron ore increased in the international market, the Appellant had filed the writ petition only in February 2004. It was found that the said contention was not wholly misconceived. Thereafter the court went on to following observations: 41. The submission of Mr. Desai that rise in international price would not by itself be a relevant consideration to rescind the contract may be correct, but then the same was not the sole ground for Respondent 2 to refuse to supply iron ore fines to the Appellant. 42. Moreover, certain serious disputed questions of fact have arisen for determination. Such disputed questions of fact ordinarily could not have been entertained by the High C....
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....ure of things; not governed by any fixed Rules or standard; also, in a somewhat different sense, absolute in power, despotic, or tyrannical; harsh and unforbearing. When applied to acts, 'arbitrary' has been held to connote a disregard of evidence or of the proper weight thereof; to express an idea opposed to administrative, executive, judicial, or legislative discretion; and to imply at least an element of bad faith, and has been compared with 'willful'. xxx xxx xxx 23. Arbitrariness in the making of an order by an authority can manifest itself in different forms. Non-application of mind by the authority making the order is only one of them. Every order passed by a public authority must disclose due and proper application of mind by the person making the order. This may be evident from the order itself or the record contemporaneously maintained. Application of mind is best demonstrated by disclosure of mind by the authority making the order. And disclosure is best done by recording the reasons that led the authority to pass the order in question. Absence of reasons either in the order passed by the authority or in the record contemporaneously main....
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....per this, no doubt, there is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when monetary claim is raised. At the same time, discretion lies with the High Court which under certain circumstances, it can refuse to exercise. It also follows that under the following circumstances, "normally", the Court would not exercise such a discretion: 69.1. The Court may not examine the issue unless the action has some public law character attached to it. 69.2. Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion Under Article 226 of the Constitution and relegate the party to the said mode of settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration. 69.3. If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination. 69.4. Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances. ....
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....tion of law or if it can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice. 70.8. If the contract between private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court Under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction. 70.9. The distinction between public law and private law element in the contract with the State is getting blurred. However, it has not been totally obliterated and where the matter falls purely in private field of contract, this Court has maintained the position that writ petition is not maintainable. The dichotomy between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with....
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....ntract can be entertained by a writ court. It depends upon facts of each case. The issue that had arisen in ABL International [(2004) 3 SCC 553] was that an instrumentality of a State was placing a different construction on the clauses of the contract of insurance and the insured was interpreting the contract differently. The Court thought it apt merely because something is disputed by the insurer, it should not enter into the realm of disputed questions of fact. In fact, there was no disputed question of fact, but it required interpretation of the terms of the contract of insurance. Similarly, if the materials that come on record from which it is clearly evincible, the writ court may exercise the power of judicial review but, a pregnant one, in the case at hand, the High Court has appointed a Commission to collect the evidence, accepted the same without calling for objections from the Respondent and quashed the order of termination of contract. (Emphasis supplied) 52. In State of U.P. v. Sudhir Kumar Singh and Ors. 2020 SCC Online 847, the first Respondent the successful tenderer had worked the contract for a year when he was visited with cancellation. This Court exhaustivel....
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.... frontiers of the Court's jurisdiction to strike at State action in matters arising out of contract, based, undoubtedly, on the facts of each case. It remains open to the Court to refuse to reject a case, involving State action, on the basis that the action is, per se, arbitrary. 54. We may cull out our conclusions in regard to the points, which we have framed: i. It is, undoubtedly, true that the writ jurisdiction is a public law remedy. A matter, which lies entirely within a private realm of affairs of public body, may not lend itself for being dealt with under the writ jurisdiction of the Court. ii. The principle laid down in Bareilly Development Authority (supra) that in the case of a non-statutory contract the rights are governed only by the terms of the contract and the decisions, which are purported to be followed, including Radhakrishna Agarwal (supra), may not continue to hold good, in the light of what has been laid down in ABL (supra) and as followed in the recent judgment in Sudhir Kumar Singh (supra). iii. The mere fact that relief is sought under a contract which is not statutory, will not entitle the Respondent-State in a case by its....
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....ion of this Court in State of U.P. and Ors. v. Bridge & Roof Co. (1996) 6 SCC 22, by its observations in paragraph-14 in ABL (supra)]. ix. The need to deal with disputed questions of fact, cannot be made a smokescreen to guillotine a genuine claim raised in a Writ Petition, when actually the resolution of a disputed question of fact is unnecessary to grant relief to a writ applicant. x. The reach of Article 14 enables a Writ Court to deal with arbitrary State action even after a contract is entered into by the State. A wide variety of circumstances can generate causes of action for invoking Article 14. The Court's approach in dealing with the same, would be guided by, undoubtedly, the overwhelming need to obviate arbitrary State action, in cases where the Writ remedy provides an effective and fair means of preventing miscarriage of justice arising from palpably unreasonable action by the State. xi. Termination of contract can again arise in a wide variety of situations. If for instance, a contract is terminated, by a person, who is demonstrated, without any need for any argument, to be the person, who is completely unauthorised to cancel the contract,....
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.... Ors. v. State of U.P. and Ors. (1991) 1 SCC 212)). However, it must be made clear that every case involving breach of contract by the State, cannot be dressed up and disguised as a case of arbitrary State action. While the concept of an arbitrary action or inaction cannot be cribbed or confined to any immutable mantra, and must be laid bare, with reference to the facts of each case, it cannot be a mere allegation of breach of contract that would suffice. What must be involved in the case must be action/inaction, which must be palpably unreasonable or absolutely irrational and bereft of any principle. An action, which is completely malafide, can hardly be described as a fair action and may, depending on the facts, amount to arbitrary action. The question must be posed and answered by the Court and all we intend to lay down is that there is a discretion available to the Court to grant relief in appropriate cases. xiii. A lodestar, which may illumine the path of the Court, would be the dimension of public interest subserved by the Court interfering in the matter, rather than relegating the matter to the alternate Forum. xiv. Another relevant criteria is, if the Cour....
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....er round would not be an obstacle for the Appellant to revisit and terminate the contract for the reason that the PPA made it incumbent on the Appellant to terminate the contract Under Article 2.1(d) if the contractor did not fulfil the conditions subsequent even after the expiry of 210 days and a further period of nine months after the commencement of PPA. We must examine whether the earlier judgment, in fact, in law permits the Appellant to re-open the said issue. A perusal of the judgment dated 20.6.2017 would reveal that the court was dealing with the challenge to the order dated 11.08.2017. The order dated 11.08.2017 would reveal that the Appellant has found that there is a delay of 54 days in achieving the condition subsequent deadline. After considering the representation by the Respondent, the Appellant found that there is no merit in the case of force majeure and there was no justification for the delay in achieving conditions subsequent. Thereafter, the Appellant, in terms of Article 2.5.1(d), terminated the PPA. Still further, a sum of Rs. 1180.50 lakhs was found recoverable as penalty in terms of Article 2.5. It is this order which was challenged. Thereafter we find tha....
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.... in Renew Clean Energy. All that was left open was the question related to the delay in commissioning the project. 59. Learned Additional Solicitor General apart from reiterating his contention would point out that the earlier judgment should not be treated as res judicata and the only reason Appellant did not challenge the High court judgment, dated 20.06.2018, was the liberty granted. He would further submit that at any rate even proceeding on the basis that the High court could not revisit the issue of the non-fulfilment of the conditions subsequent, the decision of the High Court would not stand in the way of this Court considering whether the order which is impugned in this case which includes the issue relating to non-fulfilment of the conditions subsequent is sustainable. This is apart from pointing out that even in the case of Renew Clean Energy, this Court in its order refusing to interfere in the judgment of the High Court has made it clear that it was not going into the merits of the said contention having regard to observations which had been made, namely, that the contractor therein being faced with unavoidable circumstances as also the factum of huge investment mad....
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....t with the Grid, certain regulatory requirements, before injecting of power therein, are to be complied with. They are registration, data and speech communication facility, interface metering and communication of meter data through automatic meter reading. Single line diagram indicating connectivity with the grid duly certified by MPPTCL (fourth Respondent), when connected to 132KV and above, inter alia, copy of connection agreement with the fourth Respondent, inter alia, information regarding sale of power under long-term access, medium-term open access or short-term open access, approval of CEIG for construction, operation and maintenance of electrical plans and electrical lines Under Section 73C of the Electricity Act, 2003 and approval of Power, Telecommunication and Coordination Committee (PTCC). It is further stated that on compliance with procedures it first issues a unique code for charging power evacuation line. When the line holds for a reasonable time, unique code for injection is issued. Real time generation is monitored. If it is satisfied with the data recorded by the interface meters (Main and check) then a generating station is deemed to be commissioned. It is po....
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....eer (LD:E&T), SLDC, MPPTCL, Jabalpur. As far as the requirement of connection agreement, it has been stated in the reply affidavit of the first Respondent that such connection agreement was, indeed, executed between Respondent No. 1 and Respondent No. 4. The agreement is dated 18.05.2017. At this juncture, we may notice that a Sur-Rejoinder has been filed by Respondent No. 5. Having regard to the connection agreement, all that is stated is, till date, Respondent No. 5 was not provided with a copy by the first Respondent. It is also stated that Respondent Nos. 4 and 5 are two distinct entities and, therefore, it was required for compliance that the same should have been submitted to Respondent No. 5. We have already noticed that letter dated 23.07.2017 is on the same letterhead, showing the names of Respondent Nos. 4 and 5 and signed by the Superintending Engineer, wherein also, the names of Respondent Nos. 4 and 5 appear. It is a little intriguing and strange, that the fifth Respondent did not know about the agreement and referred to it as a requirement and as though it had not been complied with by the first Respondent. The first Respondent has stated that, with regard to the sing....
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....irst Respondent was left free to sell power to a third party, which sale was to be regulated by certain terms. 65. As regards another requirement, viz., approval of the CEIG for construction, operation and maintenance of the electrical plants and electrical lines, it is the case of the first Respondent that such approval was obtained by letter dated 10.08.2017. It was also marked to Respondent No. 4. CEIG approval for the electrical plant was received on 09.08.2017. Respondent No. 4, it is pointed out, had also, on 24.08.2017, issued a Joint Inspection Report certifying that the project may be charged. In fact, we find, in the Joint Inspection Report issued by the fourth Respondent that: Newly constructed 132KV D.C.D.S. line from 400KV PS Chhegaon to 50MW Pooling Station of M/S. Sky Power Solar India Pvt. Ltd. And 50MW Pooling Station of M/S. Sky Power Southeast Solar India Pvt. Ltd. At village Chhirbel has been jointly inspected with EE (EHT-M) MPPTCL, Indore on dt. 24/08/2017. During Joint Inspection No. any major defects has been found and line. May be charged. (Emphasis supplied) 66. In regard to the same, Respondent No. 5 in the Sur-Rejoinder would state that....
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....g to the fifth Respondent was that approval of the PTCC was required. The first Respondent has, in the reply, stated the said requirement was completed on 05.09.2017. We find that Chief Engineer (Procurement) of the fourth Respondent has recorded in the communication dated 05.09.2017 that PTCC had accorded PTCC route approval: With reference to the subject cited above, DET (PTCC), Mumbai has accorded PTCC route approval for charging 132KV DCDS line from 400kV S/s Chhegaon to 100MW Solar Power Project of M/s. Sky Power Solar India & M/s. Sky Power Southeast Solar India Pvt. Ltd. Chhirbel, Dist. Khandwa. 69. The fifth Respondent, in the Sur-Rejoinder, in response to the same, would respond by stating that the Respondent No. 4 granting approval, did not mean that the same was issued with the knowledge or concurrence of Respondent No. 5. We only remind ourselves that in the Counter Affidavit filed by Respondent No. 5, Respondent No. 5 had only stated against Requirement No. VIII that there was the requirement of approval of PTCC. What is reflected in letter dated 05.09.2017 is that DET [PTCC] has accorded PTCC route approval. The approval is not granted by the fourth Respon....
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....transmission line". This is taken as an admission of the readiness of the first Respondent for generation of power. It is pointed out further that necessary approval was taken before December 2016 to August 2017 for operating the transmission line. Respondent No. 1 was not allowed to commission. Reliance is also placed on the inspection report of the Appellant to show that the transmission line was ready. The examples about other operators are brushed aside as irrelevant. It is the generator's prerogative to sell power in the open market. 73. A Sur-Rejoinder is filed by Respondent No. 5. Therein, it has interestingly produced its return in the review petition filed by the Appellant before the High court. Therein we may notice that it referred to Section 32(2) of the Electricity Act and its functions. Thereafter it has stated as follows: 3. That, in accordance with Electricity act, 2003, role of SLDC comes after commissioning of the generating plant and its evacuating transmission lines. On receipt of commissioning certificate of a generator, connectivity with the Grid, metering arrangement and other regulatory compliances, SLDC accords permission of injection of pow....
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....oad Despatch Centres.--(1) The State Government shall establish a Centre to be known as the State Load Despatch Centre for the purpose of exercising the powers and discharging the functions under this Part. (2) The State Load Despatch Centre shall be operated by a Government company or any authority or corporation established or constituted by or under any State Act, as may be notified by the State Government: Provided that until a Government company or any authority or corporation is notified by the State Government, the State Transmission Utility shall operate the State Load Despatch Centre: Provided further that no State Load Despatch Centre shall engage in the business of trading in electricity. 77. Therefore, it would appear to us that actually the fifth Respondent is to be operated by the State Transmission Utility, which is defined in Section 2(67) as the Board (defined as the State Electricity Board) or the Government company specified by the State Government Under Section 39(1), unless it is operated by a Government company or any authority or corporation established or constituted by or under and State Act. It would, therefore, appear to us t....
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.... as the public law aspect is concerned, we are inclined to take the view that in view of what has been laid down in Shri Vidhyarthi Lekha (supra), the impact of the action in a contractual matter in the facts by public authority is felt in public domain. We are dealing with the action of the Appellant in terminating the contract dealing with the right to generate renewable energy and for supplying it to the consumers. Supply of power and its consumption are imperative and indispensable needs for not only the common man but also for the efficient functioning of trade and industry. Decisions in this domain do impinge on public interest. Therefore, we would not be inclined to shut the doors on the first Respondent in this matter. We also bear in mind that this is the second round of litigation. As noticed already, in the first round, the first Respondent did succeed. 79. Having found that though a non-statutory contract and that there is no absolute prohibition against judicial review on the score that action is shown to be arbitrary, the questions which would fall for further consideration are: (1) whether action is arbitrary (2) the projected disputes of facts and their impact; (....
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....asing such a small capacity, in terms of the rate under the PPA, would make no difference to the consumer tariff. This is apart from countenancing the Appellant reneging on a binding contract, which involves reaching a reward for arbitrary State action, besides, destroying an investment of Rs. 331 crores. In this regard, reliance is placed on the judgment of this Court in Vice Chairman & Managing Director, City and Industrial Development Corporation of Maharashtra Ltd. and Anr. v. Shishir Realty Private Limited and Ors. (2021) SCC Online SC 1141. Public interest cannot be determined with reference to monetary considerations alone, it is pointed out. 82. As far as All India Power Engineer Federation (supra) is concerned, in fact, the Court was dealing with Civil Appeals, which were filed under the Electricity Act, 2003. The question about public interest arose in the context of the provision in the contract, which provided for waiver, which would be a unilateral act Under Article 18.3 of the PPA therein. The Court also discussed the effect of Section 63 of the Indian Contract Act, 1872. The Court, while dealing with waiver and public interest, held as follows: 21. Regard....
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....999) 1 SCC 492. 86. In Michigan Rubber (India) Limited v. State of Karnataka and Ors. (2012) 8 SCC 216 after referring to Tata Cellular and Raunaq International Limited (supra), the Court inter alia held as follows: 35. As observed earlier, the Court would not normally interfere with the policy decision and in matters challenging the award of contract by the State or public authorities. In view of the above, the Appellant has failed to establish that the same was contrary to public interest and beyond the pale of discrimination or unreasonable. 87. In Raunaq International Ltd. v. I.V.R. Construction Ltd. and Ors. (1999) 1 SCC 492 the case involved award of contract for the purpose of Thermal Power Station. In fact, the Appeals in this Court were maintained against the grant of an interim order against the Appellant to whom the contracts stood awarded. The case also involved relaxation of the criteria which was based on valid principles it was found. It was further found that the construction of two Thermal Power Units was being held up due to the dispute. The Court, inter alia, held as follows: 9. However, because the State or a public body or an agency of t....
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....lic interest. We do not go on to say that consideration of public interest should not at all enter the mind of the court when it deals with a case involving repudiation of a claim under a contract or for that matter in the termination of the contract. However, there is a qualitative difference in the latter categories of cases. Once the State enters into the contract, rights are created. If the case is brought to the constitutional court and it is invited to interfere with State action on the score that its action is palpably arbitrary, if the action is so found then an appeal to public interest must be viewed depending on the facts of each case. If the aspect of public interest flows entirely on the basis that the rates embodied in the contract which is arbitrarily terminated has with the passage of time become less appealing to the State or that because of the free play of market forces or other developments, there is a fall in the rate of price of the services or goods then this cannot become determinative of the question as to whether court should decline jurisdiction. In this case, it is noteworthy that the rates were in fact settled on the basis of international competitive b....
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....be within 12 months from the date of financial closure subject to Force Majeure. In case of Solar Project of capacity beyond 50 MW and up to 100 MW, commissioning of plant shall be within 15 months from the date of financial closure subject to Force Majeure For capacity beyond 100 MW, commissioning period shall be within 18 months from the date of financial closure subject to Force Majeure.. In case of failure to achieve this milestone, provision of PPA as mentioned below shall apply: MPPMCL shall encash the CPG in the following manner for the capacity not commissioned, subject to Force Majeure: a) Delay from 0-3 months - 1% per week. b) Delay from 3-6 months - 2% per week for the period exceeding 3 months, apart from (a) above.. c) Delay of more than 6 months - 3% per week for the period exceeding 6 months, apart from (a) and (b) above. Part Commissioning: In case of Solar PV Projects, Part commissioning of the Project shall be accepted by MPPMCL subject to the condition that the minimum capacity for acceptance of part commissioning shall be 5 MW. Or in multiple of 5 MW COD means the commissioning date of just units (s....
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....quired. The seller supplying power from outside of MP State shall require to obtain long term open access permission as per relevant Regulations of central and state regulators, as the case may be, from the state or regional load dispatch center and/or the state/central transmission utilities. 93. Article 4 deals with System Operations. Article 4.2 deals with system operation and scheduling. We may notice Articles 4.2.1 and 4.2.4. 4.2.1. The State Load Despatch Center shall be the Nodal Agency if the project is located in MP, for system operation, power accounting, scheduling, etc. The foes and charges of SLDC as approved by the MPERC shall be payable by the Seller to the SLDC. In case of the system is located in any other state, the Seller has to follow the Regulations of the particular SLDCIRLDC and the fees and charges shall be payable by the seller accordingly. 4.2.4. SLDCs/Control Centers of the States/UTs/DVC, in which the solar power plant is located, shall provide the 15-minute block-wise data of Schedule and actual generation from Solar Grid Connected Power Plant as recorded in the Energy Meters to the concerned RLDC and NLDC on a weekly basis as per t....
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....n that all of the conditions set forth in this Article have been satisfied or waived by the STU/CTU/MPPMCL/Transco/Discom i.e.: a) The Seller has successfully completed the testing of the Plant in accordance with the manufacturer's recommendations and the Seller has obtained and provided to the STU/CTU/Transco/Discom Certificates from the Electrical Inspectorate of GoMP or any other state government authorised agency, and the STU/Transco/Discom's officer as may be designated; in case project is located in MP. In case project is located outside MP, similar certificates be obtained from the concern authority of respective state. b) The Seller has delivered to the Transco/Discom a list of the Plant's equipment, showing the make, model, serial number and certified the installed capacity of the Plant; c) The Plant has achieved initial synchronization with the Transco/Discom's/STU/CTU Grid System and has demonstrated the reliability of its communications systems and communications with the STU/CTU/Transco/Discom; d) The Seller has operated the Plant without experiencing any abnormal or unsafe operating conditions on any interconnected s....
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....p to the Contracted Capacity, relevant to the Scheduled Commissioning Date, by the end of 24 months; or 97. Article 9.5 provides for Appellant's events of default. Article 9.7 falling under 9.6 which generally deals with 'Remedy'. It reads as follows: 9.7. MPPMCL commits to buy power, as indicated in Article Error! Reference source not found (sic). of PPA, from Seller at Rs. 5.051 per kWh for a period of 25 years from COD. In case MPPMCL refuses or is unable to buy the said power, fully or partially, or there is an event of default as per Clause 9.5 of PPA leading to termination of the PPA, the seller would be free to sell the said power to a Third Party at any rate which will be decided between the Seller and the said Third Party and such sale would be governed by the following principles: (Emphasis supplied) The principles are set out providing for two cases. 98. Article 11.6.3 deals with Change in Law. Article 13 deals with Jurisdiction and Dispute Resolution. Article 13.2.1 reads as follows: 13.2.1. Either Party is entitled to raise any claim, dispute or difference of whatever nature arising under, out of or in connection with this Agre....
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.... project involved two milestones and the High court has set aside the earlier order which dealt with delay in achieving the first milestone. Thereafter, the finding is that the project was certified to be completed much prior to 24 months which period ended on 19.9.2017 and the notice of commissioning was given on 4.7.2017. The CEIG approval was also granted on 9.8.2017. It is further found that another inspection was done on 19.04.2018 after nine months of the notice of commissioning and the CEIG approval. It is despite the same that the impugned order has been passed. Still further the High court proceeds to find that it is undisputedly established that both the milestones of the project were completed whereas only some of the invertors were stolen for which an FIR was also lodged. It is again found that it is not in dispute that the aforesaid parts have been replaced by the Respondent. Support was drawn from the case of Renew Energy and the courts discretion to interfere in the matter was reiterated. The decision was found to be arbitrary. The court directed the Respondent to file necessary application for statutory sanction for operation of the unit and the Appellant was to dec....
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.... six months, after deadline of commissioning of project, the plant is not ready for commissioning. Thus, there was not only failure to achieve condition subsequent but also failure to commission the project within time. In comparison with the case of Renew Clean Energy, it is pointed out that apart from failure to comply with condition subsequent, even the outer timeline has not been observed, whereas, in the case of Renew Clean Energy, they were ready to commission by the scheduled commissioning date. The timeline Under Article 9.1 was not conformed to. After referring to the Order of the High Court, it was found that, with reference to Article 2.5.1(d) and Article 9.1 of the PPA, the PPA was terminated. 104. Let us demystify the case for termination. Apart from non-fulfilment of the condition subsequent, apparently, in tune with the liberty granted by the High Court, the Appellant has set out a case that the last date of commencement of supply was 18.09.2017, and even as on 19.04.2018, the Respondent was not ready for commissioning of the project. With reference to Articles 5.1, 5.2 and 5.3 of the PPA, which consisted of the commercial operation date, pre-commercial operation ....
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.... case of the first Respondent that, through its EPC Contractor, it had procured, inter alia, 1163 string invertors. Some of the string invertors were stolen, as stated earlier. That the case of the Respondent is not that the project had been commissioned but that the Appellant prevented it from commissioning the project before the last date. It is also seen stated that the project was complete in all respects from the side of the Respondent but on account of theft of a very small number of equipment, highlighted by the Appellant in its Inspection Report, the first Respondent had, in the meanwhile ensured to get these miscellaneous equipments and parts reinstalled and the project was complete in all respects as on that date. As far as the theft is concerned, the first Respondent had lodged two FIRs through its EPC Contractor well before the inspection carried out on 19.04.2018. THE ASPECT OF DISPUTED QUESTIONS OF FACTS 106. What are the disputed questions of facts? The most important disputed question of fact is as to whether the first Respondent was, in fact, ready to commission the project by the end of the peremptory date, which was fixed as a period of twenty-four months f....
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.... bidder, which, at that time was hailed. THE CASE UNDER ARTICLE 9.1 READ WITH ARTICLE 9.4(a) 108. One of the grounds taken by the first Respondent against the termination notices is that it is issued without complying with Article 9.1 of the PPA. We have already adverted to the said Article. We have also referred to Article 9.4 (a). Let us divine what is contemplated under the PPA. The PPA contemplates Article 9 with its sub-divisions to provide for events of default and remedies. Under Article 9, the sub-Articles provide for seller's event of default and the Appellant's Event of default. Reading Article 9.1 with Article 9.4 and, more particularly, Article 9.4 (a), which alone is relevant, we understand the following to be what is contemplated by the parties. Article 9.1 begins with the words 'in case of default'. The default in the case of seller's event of default would be the default, which is the subject matter of the termination. Here, we can safely conclude that the seller's event of default, which is apposite, is the failure to commence the supply of power to the Appellant at the contracted capacity, relevant to the scheduled commissioning date ....
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....e period. In paragraphs-21, 22 and 23 of the impugned notices, the Appellant takes the following stand: 21. As per table-I, time line for commissioning of project has been indicated. You were required to adhere to stipulated provisions of the PPA. Whereas this has not been achieved by you, within the time line even considering provisions of Article 9.1 of the PPA i.e., 24 months (supply to power to. contracted capacity from date of PPA) + 3 months (default notice period) + 7 days (termination notice period), from the signing of the PPA have already being exhausted. 22. Whereas, in light of show cause notice issued vide this office letter No. 108 dated 22.02.2017 and liberty granted " by Hon'ble Court to MPPMCL, in its order dated 20.06.2018 for issuing fresh order in terms of PPA dated 18.09.2015 to you, in accordance with law, it is evident that you have failed to fulfil your contractual obligation as per PPA executed with you on 18.09.2015. Thus, the PPA qualifies for termination. 23. Therefore, in line and in compliance to the Hon'ble High Court judgment dated 20.06.2018 and pursuant to the provision Under Article-2.5.1(d) along with the consid....
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....2017 Dear Sir, With reference to your latter cited above, this is to intimate that on scrutiny of the documents submitted by you for fulfilment of condition subsequent after 210 days from signing of PPA. In respect of your 50 MW solar power project proposed at village Chhirbel, Taluka & dist Khandwa, status of the documents found as under: Sr. No. Location Proposed in PPA/Final Location Status of grid connectivity Status of financial closure Details of land acquisition Acquired land in hectare Mode of acquisition Remarks 1 BEDHSYA, Khandwa/ chhibel Khandwa In principal connectivity issued by Transco vide letter No.04- 02/PSP-147-LI & 1.2/95 7, Jabalpur, dated 19.10.16, which is generally found in order Loan sanction letter of M/s L&T finance vide letter No.LTF/89 2567/16- 17 dated 29.08.16, L&T INFRA vide letter No. S07201A0/ 16-17, dated 29.08.16, copy of facility Agreement and affecting compliances documents as stated in above letters are require to be submitted 99.06 64.94 HEET, UNDER REGISTERED SALE DEED 34.12 HEET under unregistered sale deed for 12 months only from Sterling Wil....
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....fault, which in this case, is the default by the seller, and, furthermore, the default being non-observance of the time limit of twenty-four months from the date of agreement dated 18.09.2015, the notice dated 22.02.2017, could not have been issued, even before the expiry of the period of twenty-four months from 18.09.2015. In other words, the seller's event of default Under Article 9.4(a) could have become the subject matter of a notice Under Article 9.1 only if there was failure on the part of the first Respondent to supply power, as provided in Article 9.4(a), within twenty-four months. That point of time, viz., the expiry of twenty-four months from 18.09.2015, would arrive, at the earliest, only on 18.09.2017. Therefore, it is only after 18.09.2017 that the first notice or, what is described as the default notice, could have been issued by the Respondent Under Article 9.1. Apparently, what has happened is the Appellant has combined the default alleged with reference to Article 2.5.1(d), to which, undoubtedly, notice dated 22.02.2017, could be said to be related and has projected the said show-cause notice as the default notice within the meaning of Article 9.1 read with Art....
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.... perusal of the said judgment in Writ Petition No. 12880 of 2017, we find that the High Court found that an attempt was made by the Appellant to justify the earlier termination dated 11.08.2017 on the ground that Respondent had not commissioned the power project within the time fixed in the agreement. The High Court was not impressed as it found that the lack of commissioning of the power project was not the reason for terminating the contract and the Appellant could not supplement the reason in view of judgment of this Court in Mohinder Singh Gill and Anr. v. Chief Election Commissioner, New Delhi and Ors. (1978) 1 SCC 405. It is thereafter, after setting aside the Order dated 11.08.2017, that liberty was granted to the Appellants to pass fresh Order in terms of the PPA, in accordance with law. High Court, therefore, only permitted the Appellants to invoke the PPA with respect to the lack of commissioning, and moreover, in accordance with law. It becomes clear as day light that since by the date of the Judgment, i.e., 20.06.2018, the period of twenty-four months from the date of the agreement, had expired, and if, in terms of the liberty granted by the High Court, the Appellant wa....
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.... the really significant fact is that after the Appellant terminated the contract on 11.08.2017, it is wholly inconceivable and arbitrary to predicate that the first Respondent should have commenced the project and complied with Article 9.4(a) by 18.09.2017. Even more unfair it would be to find that the first Respondent had three months period from 18.09.2017 to cure the defect which period came to an end on 18.12.2017. Yet, this very premise is reflected in the impugned notice dated 07.07.2018. There is no case at all for the Appellant that immediately on the expiry of 24 months contemplated in Article 9.4(a), a notice was given Under Article 9.1. This could not be, also for the reason that the Appellant had well before 18.09.2017, on 11.08.2017, terminated the contract. This is indisputable. Equally significantly, termination of the contract dated 11.08.2017 clearly was illegal though it was found later and set aside by judgment dated 20.06.2018. Thus, we cannot also brush aside the complaint of the first Respondent that this is a case where it stood prevented from commencing supply within the meaning of Article 9.4(a). The fact of termination by order dated 11.08.2017 and its inv....
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.... basis for interference in powers of judicial review Under Article 226. This is not the basis on which the impugned judgment is based. Could it be said that this is a matter, which should have formed the subject matter of a proceeding in a civil court. In this regard, we may notice the following aspects: The object behind giving the default notice Under Article 9.1 is to provide an opportunity to the seller under the PPA to comply with the PPA and remove the default within the period of three months. If it is a case where it is demonstrated that removal of the default was an impossibility, then, it would, indeed, be a futile exercise and perhaps, at least, in a writ proceeding based on infraction of Article 14 or that the action is arbitrary, the Court may have refused to exercise the extraordinary jurisdiction and relegate the party to other forum to seek whatever relief it may be entitled to. If on the other hand, complying with Article 9.1 was, indeed, meaningful and the default (Article 9.4 (a) could have been removed as contemplated Under Article 9.1, then, undoubtedly, it may constitute arbitrariness to deprive the first Respondent of the benefit of a default notice.....
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....n Chhegaon. Balance 5% is expected to be completed by 15th July, 2017 in all respect. * Bay construction- 90% work on the 132 KV bay is completed (post receipt of connectivity approval from MP Power Transmission Company Limited ("MPPTCL") for the Project along with installation of specified equipment as required by MPPTCL. Balance 10% of the work, including testing, meter and CRP panel, is expected to be completed by 20th July, 2017. * Connecting Agreement- Connection agreements have already been signed on 18th May, 2017 between Madhya Pradesh Power Transmission Company Limited, Jabalpur and M/s. Sky Power Solar India Private Limited. * SLDC connectivity- Connectivity from plant to the SLDC-Indore is already established through dedicated 2nox2mbps point to point lease lines from BSNL (as per approved scheme of SLDC on 23rd March, 2017 through letter No. SE./LD. E&T/880, data can be transferred immediately on charging of plant). Specified equipment as per approved scheme of SLDC has been installed at SLDC-Indore and at the Project. Even, IP scheme for both the routers has been allocated by the SLDC, Jabalpur (through letter No. SE/LD.E&T/06, dated 3rd Apri....
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....s claimed to have been completed as on the 28.06.2017. Balance 5 per cent, it is stated, would be completed by the 15.07.2017 in all respects. In regard to bay construction, 90 per cent of work was stated to be completed along with installation of certified equipment. Here also, it is stated that the balance 10 per cent of the work including, testing, meter and CRP panel would be completed by 20.07.2017. Connection agreement is stated to have been signed on 18.05.2017. As far as SLDC connectivity is concerned, it is stated that connectivity to SLDC indoor was already established through dedicated 2nox2mbps point to point lease lines from BSNL. As far as the certification by the CEIG, it is stated that the process to obtain the CEIG certification would be initiated and it is expected by 20.07.2017. Inspection was prayed for so as to achieve the target commissioning date by 31.07.2017. No doubt, the Appellant has proceeded on the basis that the notice dated 04.07.2017 cannot be treated Under Article 5.3 of the PPA. As far as the CEIG Report is concerned, it appears to be dated 09.08.2017. It could no doubt be found that what Article 5.3 notice contemplates is a state of accomplishmen....
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....uld expire only on 18.09.2017. The CEIG has given its Report on 09.08.2017 that the project was ready for commissioning. The factum of the Report cannot be treated as a disputed question of fact as it is covered by a document. In fact, we find that, the Appellant proceeded on the basis admittedly that it was reliable, but, however, on 11.08.2017 issued the termination notice solely based on non-fulfilment of conditions subsequent. This notice stood set aside on 20.06.2018. Maybe the manner in which the inspection was carried out and the pitfalls in the same may be characterised as the disputed questions of facts. Also, though the Appellant was invited to carry out the inspection on 04.07.2017, the Appellant carried out the inspection only on 19.04.2018 and the Report was dated 21.04.2018. 124. If we go by the Report of the CEIG, the project of the Respondent would appear to have been completed for the purposes of effecting commissioning. It may be another matter that other formalities had to be completed. When the team of the Appellant carried out the physical inspection, (it was done on 19.04.2018), the Appellant's team also substantially endorsed the Report of the CEIG. Ho....
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....ondent has a definite case that about 39 inverters involved were also replaced in June, 2018 based on Purchase Order of May 2018 [See Annexure R12 produced before the High Court in Review Petition No. 682 of 2020]. This is even before 07.07.2018. No doubt, the Appellant has a case that the FIRs relied on by the first Respondent did not refer to inverters. As to whether, it was a result of thefts that the inverters etc. which were already there as on the date of the CEIG inspection went subsequently missing or as to whether it was as a result of the Report of the CEIG being flawed and, therefore, the inverters etc. were not there in the first place, even as on the date of the CEIG Report, appears to us to be a disputed question of fact. We proceed on the basis that the inverters in question were not there. But as noticed, about 39 stolen invertors were already replaced in June 2018. At any rate, if a default notice had been given pointing out this aspect, the matter could possibly be put right within three months of such a notice. We recall here the few complaints (essentially two in number) which remained of Respondent No. 5. It could have been pointed out as part of aspect of defa....
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....d by the Customs Department but the Lorry Receipts, to establish the procurement of 1175 Inverters required for the first Respondent Unit in 2017. It is also their case that the inverter serial numbers themselves carry no significance. They were mere identifiers for the purpose of record keeping, warranty claims, etc. All the 1163 Inverters installed by the first Respondent had identical mechanical specification and the mere mention of incorrect serial numbers in the Report of the CEIG did not establish that the first Respondent was not ready to commission the project. The first Respondent also has pointed out that on learning of the duplication of the few inverters serial numbers in the Report of the CEIG, it promptly approached the CEIG on 16.09.2020 with details of the correct unique serial numbers and the corresponding location of the inverters. It requested the CEIG to inspect and verify the inverters and to issue a corrigendum to the first Report dated 09.08.2017. In fact, there is reference to first Respondent in compliance with the first impugned judgment writing to the CEIG earlier on 15.04.2020, to visit the project site for reissuing/revalidating the approval for commiss....
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....6.09.2020. The report would indeed indicate the state of affairs about all the facets. As already noticed, even under the impugned judgment dated 27.02.2020, the first Respondent would have to submit necessary applications. We only clarify that it may involve removing any remaining deficiencies with the fifth Respondent. 130. It may not be wholly irrelevant to notice the following aspect which is reflected in the counter affidavit filed by the Respondent No. 1 before this Court. It is of utmost importance to mention here that while the challenge to the 2018 Termination Notice was pending, the Petitioner had proposed a so-called amicable resolution of the dispute with the Respondent No. 1 and convened a meeting for this purpose on February 6, 2020. Occurrence of this meeting and the discussions held are recorded at paragraphs 7 and 8 of the Impugned Order 1. During this meeting, the Petitioner had attempted to impress upon the Respondent No. 1 to explore 'Third Party Sale' from the project or, agree to a reduction in tariff in line with the recent auctions conducted by SECI for other solar power projects. Respondent No. 1 had rejected both the option of 'thir....