In Brief
In this dispute over a 10 MW solar power project in Karnataka, the Supreme Court upheld the right of Chamundeshwari Electricity Supply Company (CESC) to encash a ₹24.9 crore performance guarantee. The project developer, Saisudhir Energy, failed to meet contractual deadlines due to delays in commissioning transmission lines by the state power utility (KPTCL). The developer claimed Force Majeure but had not issued the required formal notice. The Court held that where a Power Purchase Agreement provides specific contractual mechanisms for relief, parties must seek relief through those channels. Regulatory bodies cannot rewrite commercial contracts or override agreed risk allocations. The developer's failure to seek formal extension or issue proper Force Majeure notice within contractual timelines meant the performance guarantee was lawfully encashed.
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