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DELHI HIGH COURT
SANJEEV NARULA
Meenakshi Energy Limited – Appellant
Versus
PTC India Ltd. – Respondent
| Table of Content |
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| 1. factual background of the case. (Para 2) |
JUDGMENT
[VIA HYBRID MODE]
Sanjeev Narula, J. (Oral)
1. 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
Contractual obligations prevail over ongoing insolvency proceedings when a party is in material breach, allowing for termination without prior action from associated parties.
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....
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.
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....
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.
Termination of contract by BIDA justified despite insolvency proceedings due to prior breaches by Corporate Debtor, hence moratorium protections under IBC inapplicable.
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.
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