M. P. POWER MANAGEMENT COMPANY LTD. versus RENEW CLEAN ENERGY PVT. LTD. & ANR.
Termination of contract by appellant was arbitrary considering uncontrollable circumstances faced by respondent No.1. Delay should be counted factoring such circumstances, and only penalty—not termination—should be imposed. Invocation of bank guarantee maintained.
- Parties
- Appellant: M.P. Power Management Company Ltd.; Respondent No.1: Renew Clean Energy Pvt. Ltd.; Respondent No.2: Bank (Respondent No.2)
- Jurisdiction
- India
- Judgment Date
- 05 April 2018
- Procedural Posture
- Civil Appeal / Final Judgment
- Outcome
- appeal dismissed
- Legal Topics
- Termination of Contract, Power Purchase Agreement, Penalties for Delay, Bank Guarantee
Case Brief
Summary, issues, holding and outcome
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Parties
M.P. Power Management Company Ltd.
Appellant
Renew Clean Energy Pvt. Ltd.
Respondent No.1
Bank (Respondent No.2)
Respondent No.2
Procedural Posture
Civil Appeal / Final Judgment
Legal Issues
- 1 Whether the termination of the Power Purchase Agreement was valid and fair
- 2 Whether the respondent is liable to pay penalty for delay under the contract
- 3 Whether invocation of the bank guarantee was maintainable
Ratio Decidendi
Termination of contract by appellant was arbitrary considering uncontrollable circumstances faced by respondent No.1. Delay should be counted factoring such circumstances, and only penalty—not termination—should be imposed. Invocation of bank guarantee maintained.
Court Disposition
appeal dismissed
Orders
- Respondent No.1 shall pay penalty of Rs.11,95,54,200/- to the appellant within four weeks from the date of judgment.
- Termination of contract set aside.
Full Case Text
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