The Delhi High Court has officially declined to entertain an urgent plea for interim relief in a high-stakes electricity dispute, reinforcing the principle that specialized regulatory bodies possess the primary authority to manage interim protections. In a decision delivered by Justice Tushar Rao Gedela, the Court underscored that the State Electricity Regulatory Commission (SERC) holds the requisite jurisdiction to grant interim orders , effectively barring parties from seeking such protections through the High Court under the framework of the Arbitration and Conciliation Act, 1996 .

The dispute involves Enerica Infra 3 Private Limited , which had sought to restrain NTPC Vidyut Vyapar Nigam Limited and the Uttar Pradesh Power Transmission Corporation Limited from proceeding with the encashment of bank guarantees totaling ₹52.20 crore. The legal conflict originated from a significant infrastructure project—the development of a 125 MW/500 MWh standalone battery energy storage system at the Garautha Substation in Uttar Pradesh. The project, initiated under a Power Purchase Agreement (PPA) executed on August 26, 2025 , quickly stalled amid allegations of land acquisition deficiencies and fundamental contractual breaches.

Navigating Jurisdictional Boundaries for Energy Projects

At the center of the dispute was the contention that the utilities failed to provide the mandated 10 acres of contiguous, encumbrance-free land within the agreed 60-day window. Enerica Infra alleged that only 8.9 acres were provided, a claim contested by the respondents, who maintained that 9.05 acres had been successfully delivered. Following these mounting tensions, Enerica Infra terminated the agreement on August 14, 2026 , and promptly approached the Delhi High Court just two days later to freeze the encashment of various financial instruments, including a performance guarantee of ₹27.96 crore, a viability gap funding guarantee of ₹13.50 crore, and connectivity guarantees totaling ₹10.74 crore.

However, the Court ruled that the legislative framework governing the electricity sector provides a comprehensive mechanism for addressing such grievances, rendering judicial intervention under Section 9 of the Arbitration and Conciliation Act unnecessary and inappropriate. Justice Gedela’s reasoning centered on the inherent powers granted to the SERC under Section 94(2) of the Electricity Act, 2003 .

“It is clear from a reading of sub-section (2) of Section 94 of the Act that the SERC has the inherent powers to pass interim orders in any proceeding, hearing or matter before it,” the Court observed. “This jurisdiction conferred upon the SERC also postulates that the Commission can pass interim protection orders in the nature of those passed by Civil Courts under Section 9 of the A&C Act .”

By establishing this, the Court held that it was essentially denuded of the jurisdiction to intervene, as the matters presented by the petitioner fell squarely within the statutory mandate of the electricity regulator. The Court further noted that its ruling aligned with existing jurisprudence, specifically referencing the Supreme Court ’s precedent in Gujarat Urja Vikas Nigam Limited v. Essar Power Limited , which affirmed the SERC’s role as the primary adjudicatory authority for disputes between electricity licensees and generating companies.

Scrutiny of Contractual Thresholds and Dispute Splitting

Beyond the broader question of jurisdictional authority, the Court examined the specific contractual stipulations that Enerica Infra had attempted to leverage. The company had argued that its request for an injunction was independent of the monetary recovery limits typically associated with their arbitration clauses . Specifically, the agreement contained a provision allowing for arbitration only when the disputed amount did not exceed ₹25 crore.

Enerica Infra sought to bypass this restriction by framing its petition as a request for injunctive relief rather than a demand for the recovery of funds. The Court, however, dismissed this interpretation. It pointed out that the combined value of the guarantees in question far exceeded the ₹25 crore threshold, and importantly, it noted that the dispute could not be artificially split or restructured to circumvent agreed-upon arbitration limitations. By attempting to avoid the threshold through the nature of the remedy sought, the petitioner failed to persuade the Court that it held the authority to bypass the specific terms of the Power Purchase Agreement .

The Delhi High Court ’s refusal to interfere signifies a growing trend in administrative law where courts are increasingly hesitant to intervene in matters explicitly managed by sector-specific regulators. For entities involved in power infrastructure, the judgment serves as a practical reminder that the first point of contact for interim relief —even in complex contractual disputes involving multi-crore bank guarantees—must be the regulatory commission assigned to that specific sector.

The dismissal was procedural, meaning the Court consciously avoided weighing in on the merits of the underlying land dispute or the lawfulness of the contract termination. In its final directive, the Court explicitly instructed the SERC to disregard any observations made during the High Court proceedings regarding the merits of the case, ensuring that the Commission can conduct an independent review of the evidence should the parties pursue the matter further before the regulatory body.

As it stands, Enerica Infra is now directed to seek its remedies within the regulatory framework established by the Electricity Act. The case illustrates the necessity for rigorous adherence to dispute resolution clauses and statutory jurisdictions, particularly as stakeholders navigate the complexities of large-scale renewable energy infrastructure projects in India. With the High Court’s dismissal, the parties remain at an impasse regarding the encashment of the guarantees, leaving the ultimate determination of the contractual breach to the regulatory authorities tasked with overseeing the power distribution landscape. Any future developments in this matter are expected to unfold solely within the proceedings of the SERC, marking the end of judicial involvement at the High Court level.