In Brief
Adani Power (Mundra) submitted a bid to supply 1000 MW of electricity based on assured coal supply from Gujarat Mineral Development Corporation (GMDC). When GMDC failed to execute a Fuel Supply Agreement, Adani terminated the Power Purchase Agreement with procurer GUVNL and paid liquidated damages. The Commission and Appellate Tribunal rejected the termination, ordering specific performance. The Supreme Court held that the termination was lawful under Article 3.4.2 of the PPA, which permits either party to terminate upon non-compliance with conditions subsequent, with liquidated damages as the sole consequence. The Court rejected the requirement of mutual agreement for invoking termination rights and remitted determination of compensatory tariff to CERC.
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