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SANJEEV NARULA
Meenakshi Energy Limited – Appellant
Versus
Ptc India Ltd – Respondent
JUDGMENT
Sanjeev Narula, J. - Meenakshi Energy Limited (through its Resolution Professional, Mr. Ravi Sankar Devarakonda) - the Petitioner herein [hereinafter referred to as MEL], has approached this Court under Section 9 of the Arbitration and Conciliation Act, 1996, [hereinafter referred to as the Act], seeking, inter alia: (i) the stay of operation of a termination notice dated 25th November, 2021, issued by PTC India Limited - being the Respondent No. 1 [hereinafter referred to as PTC] in terms of Clause 4.4(c) of the Power Purchase Agreement dated 9th October, 2018 executed between PTC and Bangladesh Power Development Board [hereinafter referred to as BPDB], and (ii) also stay of invoking of certain performance of bank guarantees.
2. FACTS
2.1. MEL is presently admitted to Corporate Insolvency Resolution Process (CIRP) in terms of the Insolvency and Bankruptcy Code, 2016, pursuant to an admission Order dated 07th November 2019 passed by National Company Law Tribunal, Hyderabad Bench (NCLT).
2.2. MEL and PTC entered into an Exclusive Power Purchase Agreement on 09th January 2018 to enable PTC to participate in a bid floated by BPDB for procurement of power. PTC was successful in th
The Court established that a party's material breach of contract justifies the other party's termination, and the balance of convenience and public interest are crucial factors in determining injunct....
Contractual obligations prevail over ongoing insolvency proceedings when a party is in material breach, allowing for termination without prior action from associated parties.
Termination of contract by BIDA justified despite insolvency proceedings due to prior breaches by Corporate Debtor, hence moratorium protections under IBC inapplicable.
The functional status of the Central Electricity Regulatory Commission (CERC) and its jurisdiction under the Electricity Regulation Act, 2003 were central to the court's decision.
The court upheld the termination of a consultancy contract due to the appellant's failure to perform obligations, affirming the right to invoke arbitration for grievances.
The main legal point established in the judgment is that in the case of a determinable contract, no injunction against termination and enforcement of the contract can be issued.
Court upheld the petition challenging the termination of the Power Purchase Agreement, emphasizing the maintenance of status quo until the Central Electricity Regulatory Commission resumes functional....
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