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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
K.S. HEMALEKHA
Hassan Thermal Power Private Limited – Appellant
Versus
Power Company Of Karnataka Ltd. (PCKL) – Respondent
ORDER :
K.S. HEMALEKHA, J.
The petitioner- M/s. Hassan Thermal Power Private Limited has approached this Court seeking a writ of mandamus directing respondent No.1-Power Company of Karnataka Ltd. (PCKL) to refund a sum of Rs. 1,00,00,000/- (Rupees One Crore) deposited by it as Earnest Money Deposit (EMD) on 28.11.1998, together with interest at 12% per annum from 12.04.2016, the date on which the Government of Karnataka withdrew its approval to the proposed Power Purchase Agreement (PPA).
Brief Facts:
2. The petitioner is a company duly incorporated under the provisions of the Companies Act, 1956. It was originally incorporated under the name M/s. Euro India Power Canara Private Ltd. and had its registered office at Bengaluru, with its administrative office situated at New Delhi.
3. The Government of Karnataka, represented by respondent No.2, by its order dated 05.03.1996, acting through the then Karnataka Electricity Board (KEB), the predecessor in contract to the present Karnataka Power Transmission Corporation Ltd., (KPTCL) granted permission to M/S. Euro Kapital A.G. (‘M/s. AG’ for short) to establish a Low Sulphur Heavy Stock (LSHS)-based barge-mounted-power plant of 1x150 MW capac
EMD is independent of the PPA and must be refunded following governmental withdrawal of approval; its retention constitutes unjust enrichment under Article 300A.
Presence of an arbitration clause would oust jurisdiction under Article 226.
The court established that retention of a forfeited bank guarantee is unjustified when the basis for forfeiture is invalidated by subsequent findings, underlining the jurisdiction of courts in contra....
A State entity must act in accordance with principles of fairness and justice in contractual obligations, and cannot withhold payments without a clear determination of dues, as this constitutes arbit....
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