Madhya Pradesh High Court
M/S Sky Power Southeast Solar India Pvt. ... vs M.P.Power Management Company Limited ... on 20 June, 2018
...1...
WP-12880-2017
HIGH COURT OF MADHYA PRADESH
Writ Petition No.12880/2017
(M/S SKY POWER SOUTHEAST SOLAR INDIA PVT. LTD. A MEMBER OF THE SKY POWER
GLOBAL GROUP OF COMPANIES VS M.P.POWER MANAGEMENT
COMPANY LIMITED AND OTHERS)
Jabalpur, Dated 20-06-2018.
Shri Naman Nagrath, Senior Advocate with Shri Jubin Prasad,
Advocate for the petitioner.
Shri P.K. Kaurav, Advocate General with Shri Aditya
Khandekar, Advocate for the respondents.
1. The challenge in the present petition is to communication dated 11.08.2017 terminating Power Purchase Agreement (PPA) dated 18.09.2015 and encashment of Contract Performance Guarantee (CPG) for recovery of penalty, due to delay in completing the commissioning of the project.
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 ...2...
WP-12880-2017 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 vs M.P. Power Management Company Limited and another) vide order dated 18.08.2017. In the said petition, the petitioner has admittedly commissioned the power project within the time prescribed except that there was delay of 16 days in achieving the first milestone. The said order has been affirmed on 05.04.2018 by the Hon'ble Supreme Court in Civil Appeal No.3600/2018 (M.P. Power Management Company Limited vs ReNew Clean Energy Private Limited and another).
4. The parties are not ad idem about the stage of commissioning of the power project in the present petition.
5. Mr. Kaurav sought to justify the termination of the Power Purchase Agreement (PPA) asserting that the petitioner has not commissioned the power project within the time fixed in the agreement, but the lack of commissioning of power project is not the reason for terminating of the contract. Since, such is not the reason mentioned in the order terminating the agreement, therefore, the respondents cannot supplement the reasons for termination of the contract by virtue of additional assertions in the return and/or in the ...3...
WP-12880-2017 arguments raised in view of the Supreme Court decision in Mohinder Singh Gill v. Chief Election Commissioner (1978) 1 SCC 405.
6. In view of the fact that the similar reason of termination of the agreement has not been found to be justified in the matter of ReNew Clean Energy Private Limited (supra), therefore, the impugned communication dated 11.08.2017 is hereby set aside. However, liberty is granted to the respondents to pass fresh orders in terms of Power Purchase Agreement dated 18th September, 2015 in accordance with law.
7. The petition is allowed in above terms.
(Hemant Gupta) (Akhil Kumar Srivastava)
Chief Justice Judge
vinod
Digitally signed by VINOD
VISHWAKARMA
Date: 2018.06.21 03:49:36 -07'00'