In Brief
M.P. Power Management Company Ltd. entered into a Power Purchase Agreement with ReNew Clean Energy Pvt. Ltd. for procurement of 51 MW solar power. After the respondent faced resistance at the allotted land in Rajgarh district, the appellant approved a change of location. The respondent purchased new land and advanced the project construction but exceeded the nine-month deadline for achieving Conditions Subsequent by approximately 16 days. The appellant terminated the contract on 11.08.2017 and invoked the bank guarantee. The High Court set aside the termination but upheld the invocation of the bank guarantee. The Supreme Court dismissed the appeal, holding that while termination was arbitrary given the respondent's substantial investment and the project's advanced stage, the respondent remains liable to pay the contractually stipulated penalty of Rs.11,95,54,200/- for the delay.
The lawyer headnote and full judgment text are available to registered users.