In Brief
M.P. Power Management Company terminated a Power Purchase Agreement with Sky Power for supplying 50 MW solar power at Rs 5.109 per unit. The Court held that while the PPA is non-statutory, the State's termination can be reviewed for arbitrariness under Article 14. The termination was illegal because the appellant failed to issue a default notice as mandated by Article 9.1 of the PPA before terminating. Though disputed facts existed regarding project readiness, they were immaterial since the procedural violation was clear. The Court found the State's action arbitrary, especially given the transparent competitive bidding where 182 bidders participated and the first respondent's bid was lowest. Public interest did not justify termination merely because market rates fell. The High Court's judgment was upheld, dismissing the appeals.
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