M. P. POWER MANAGEMENT COMPANY LIMITED, JABALPUR v. M/S. SKY POWER SOUTHEAST SOLAR INDIA PRIVATE LIMITED & OTHERS

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A subsequently location changed to Village Chhibel, Teb-Khalliiwa, Distt- Khandwa at a rate of Rs. 5.091 per unit, is hereby terminated.”

110. Thus, we find the twenty-four months period from the date of the PPA, plus three months default notice period, plus seven days termination notice period, had been already exhausted. In paragraph-22, support is sought to be drawn from the show-cause notice dated ‘22.02.2017’ and the liberty granted by the High Court in the first Writ Petition, for issuing a fresh Order. The PPA, it was found by the appellant, qualified for termination. In paragraph-23, it is explicitly stated that based on Article 2.1.1(d) along with the timeline stipulated in Article 9.1 and the show-cause notice dated 22.02.2017, the PPA was terminated.

111. Therefore, the show-cause notice dated 22.02.2017 is what the appellant lays store by to conclude that it was acting in compliance with the requirement of issuance of the default notice under Article 9.1. It, therefore, becomes necessary to advert to the notice dated 22.02.2017. D We may extract the following: “MP POWER MANAGEMENT COMPANY LIMITED CIN: U4010MP2006SGC018637 (A Govt. of M.P. UNDERTAKING) E Regd. Office: Shakti Bhawan, Rampur, Jabalpur, Madhya Pradesh, india-482008, Tel: 0761-2661111;-2660500, Fax: 0761- 261696, website:-www.mppmcl.com, email: md@mppmcl.com, No. 05-01/Solar Bidding-III/PP A/108 ‘Jabalpur Date 22.02.2017 F To, M/s Sky Power Southeast Solar Pvt. Ltd. 16A/20 W.E.A. Main Ajmal Khan Road,

G Karol Bagh, New Delhi-110005. Subject: submission of documents for fulfilment of condition subsequent in respect of your 50MW Solar Power project proposed at Village Chhirbel, Tallika Dist Khandwa under Phase-III solar H competitive bidding.

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 87 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

Ref: 1. Power purchase Agreement executed on 18.09.2015. A

2. Your letter No. SKP/MP/SOLAR/MPPMCL/2015-116/06, dated 12.01.2017 Dear Sir, With reference to your latter cited above, this is to intimate that B on scrutiny of the documents submitted by you for fulfilment of condition subsequent after 210 days from signing of PPA. In respect of your 50 MW solar power project proposed at village Chhirbel, Taluka & dist Khandwa, status of the documents found as under: C

D.G.M. (Commercial-3) R.0., MPPMCL, Bhopal G Chief General Manager (Commercial): Block No. 11, Shakti Bhawan, Rampur, Jabalpur (MP) 482008 Tel: 0761-2661245, 2702404, Fax: 0761-2661245, email: makarand.chincholkar@mppmcl.com H

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A It needs to be mentioned here that as per provisions of amended clause 2.1 (f) of the PPA pertaining to acquisition of land for the project, Seller shall be required to furnish the following ~ documentary evidence:- • Ownership or lease hold right (for at least 30 years) or right to use permission (for revenue land in Madhya Pradesh) in the name of seller and possession of 100% of the area of the land required for the allotted project. • Requisite documents from the concerned and competent revenue registered authority for the acquisition ownership vesting of the land in the name of the seller and in case of private land clear title for ownership and/ or registered lease deed for land taken on lease. As can be seen from the above table you have submitted clear title for ownership for only 64.94 hectare land. whereas for 34.12 D hectare land you have submitted unregistered lease deed for only 12 months, which cannot be considered for fulfilment of condition subsequent as per provisions of the PPA as mentioned above. Further, as per provision of clause 2.5.l (dO of the PPA, referred PPA is liable for termination. Therefore, you are requested to E submit your explanation/ justifications, if any, within 10 days from the issue of this letter, for further - necessary action in the matter.

Chief General Manager Commercial MPPMCL, Jabalpur” F

112. A perusal of this notice, would reveal the following: The subject matter of the said notice appears to be the fulfilment of condition subsequent. It is clearly mentioned that as per Article 2.5.1, the PPA was liable for termination. The first respondent was asked for the explanation within ten days from the date of the letter for further necessary action in the matter. We are of the view that the said notice cannot qualify as one which was issued as a default notice under Article 9.1. We have already found that Article 9.1, dealing with default, which in this case, is the default by the seller, and, furthermore, the default being non-observance of the time limit of twenty-four

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 89 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

months from the date of agreement dated 18.09.2015, the notice dated 22.02.2017, could not have been issued, even before the expiry of the period of twenty-four months from 18.09.2015. In other words, the seller’s event of default under Article 9.4(a) could have become the subject matter of a notice under Article 9.1 only if there was failure on the part of the first respondent to supply power, as provided in Article 9.4(a), within twenty- four months. That point of time, viz., the expiry of twenty-four months from 18.09.2015, would arrive, at the earliest, only on 18.09.2017. Therefore, it is only after 18.09.2017 that the first notice or, what is described as the default notice, could have been issued by the respondent under Article 9.1. Apparently, C what has happened is the appellant has combined the default alleged with reference to Article 2.5.1(d), to which, undoubtedly, notice dated 22.02.2017, could be said to be related and has projected the said show-cause notice as the default notice within the meaning of Article 9.1 read with Article 9.4. Article 9.1 D contemplates a default, the issuance of default notice and, most importantly, giving a period of three months for the seller (first respondent) to set right things. It is if the seller does not remedy the matter within three months, that the second notice, which is essentially an Order of termination of the PPA, can be issued. A perusal of the notice dated 22.02.2017 does not make any E reference to the seller’s event of default contemplated in Article 9.4.(a). The reasons are not far to seek. For the reasons, which we have indicated hereinbefore, the notice could not have been issued based on there being a seller’s default within the meaning of Article 9.4.(a) on 22.02.2017. We reiterate that as on F 22.02.2017, the seller’s event of default under Article 9.4.(a), could not exist in law or in facts. Still further, we notice from the tenor of the notice dated 22.02.2017 that the first respondent was, in fact, asked to give its justification within ten days from the date of issue of the notice for necessary action in the matter. This is totally incompatible with the notice contemplated as a G default notice within the meaning of Article 9.1. Article 9.1 contemplates the existence of a default by the seller and the giving of a period of three months to the seller to remove the defect. We are unable to understand how notice dated 22.02.2017 could be understood as affording any such H

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A opportunity as is contemplated under Article 9.1. Therefore, we have no hesitation in holding that the appellant cannot seek shelter under notice dated 22.02.2017 to justify the notice of termination dated 07.07.2018, if reliance is to be placed on Article 9.1 read with Article 9.4.(a). We have already found that the appellant cannot be permitted to reopen the issue relating B to the non-fulfilment of the conditions subsequent, as the issue has attained finality by virtue of the Judgment of the High Court dated 20.06.2018.

113. Appellant has attempted to justify the notice dated 22.02.2017 as the show-cause notice within the meaning of Article 9.1 based on the C Judgment of the High Court in the first round of litigation. We are of the view that appellant would not be justified in drawing support from the said Judgment to contend that the issuance of notice dated 22.02.2017, would suffice and it absolves the appellant from complying with Article 9.1. From a perusal of the said Judgment in Writ Petition No. 12880 of D 2017, we find that the High Court found that an attempt was made by the appellant to justify the earlier termination dated 11.08.2017 on the ground that respondent had not commissioned the power project within the time fixed in the agreement. The High Court was not impressed as it found that the lack of commissioning of the power project was not the reason for terminating the contract and the appellant could not supplement the reason in view of Judgment of this Court in Mohinder Singh Gill and another v. Chief Election Commissioner, New Delhi and others35. It is thereafter, after setting aside the Order dated 11.08.2017, that liberty was granted to the appellants to pass fresh Order in terms of the PPA, in accordance with law. High Court, therefore, only permitted the appellants to invoke the PPA with respect to the lack of commissioning, and moreover, in accordance with law. It becomes clear as day light that since by the date of the Judgment, i.e., 20.06.2018, the period of twenty- four months from the date of the agreement, had expired, and if, in terms of the liberty granted by the High Court, the appellant was to lawfully terminate the contract, it could not have acted in breach of the mandate of the PPA, which, in fact, the High Court had specifically directed appellant to comply with. In other words, though nearly nine months had gone by from 18.09.2017, when the High Court pronounced Judgment on 20.06.2018, if the appellant wanted to terminate the agreement, at least under the contract, the appellant was obliged to issue 35 H (1978) 1 SCC 405

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 91 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

the default notice. As we have noticed, the appellant was perhaps A persuaded to issue the impugned termination notice on the basis of the earlier notice dated 22.02.2017 as it felt that it was entitled to ask the Court to revisit the issue relating to the non-fulfilment of the condition subsequent as well. The appellant has, in fact, proceeded in the notice of termination that the three months period, contemplated in Article 9.1, B came to an end automatically, on 18.12.2017 and things had not changed on the ground, entitling it to issue the notice dated 07.07.2018, after the further expiry of seven days on 25.12.2017. The appellant, in this regard, appears to have laboured under the apprehension that the mere expiry of the period of three months, after the occurring of the event of seller default, within the meaning of Article 9.4.(a) and the further expiry of C another seven days, entitled it to issue the notice of termination. What, on the other hand, Article 9.1 read with Article 9.4.(a) contemplated was not the mere running of time for a period of three months, after the occurrence of the seller’s event of default but an opportunity to the seller by the giving of a notice of default and waiting for three months. It D is only after the seller was put on notice of the default, which it had committed and an opportunity was granted to remove fully the default and it persevered in breach, that a valid Order of termination could be passed. On this reasoning, there can be no dispute that the appellant has clearly failed to act in terms of the clear mandate of Article 9.1 read with Article 9.4.(a). E

114. There is another vital aspect to be borne in mind. The impugned notice dated 11.08.2017, brought about the termination of the contract. This is while notice dated 04.07.2017 was issued by the first respondent, as noticed. Therein, the appellant was specifically asked to inspect the premises. The CEIG also issued the certificate on 09.08.2017. F Now the really significant fact is that after the appellant terminated the contract on 11.08.2017, it is wholly inconceivable and arbitrary to predicate that the first respondent should have commenced the project and complied with Article 9.4(a) by 18.09.2017. Even more unfair it would be to find that the first respondent had three months period from 18.09.2017 to cure the defect which period came to an end on 18.12.2017. Yet, this G very premise is reflected in the impugned notice dated 07.07.2018. There is no case at all for the appellant that immediately on the expiry of 24 months contemplated in Article 9.4(a), a notice was given under Article 9.1. This could not be, also for the reason that the appellant had well before 18.09.2017, on 11.08.2017, terminated the contract. This is H

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A indisputable. Equally significantly, termination of the contract dated 11.08.2017 clearly was illegal though it was found later and set aside by judgment dated 20.06.2018. Thus, we cannot also brush aside the complaint of the first respondent that this is a case where it stood prevented from commencing supply within the meaning of Article 9.4(a). The fact of termination by order dated 11.08.2017 and its invalidation by the High B court on 20.06.2018 are again not matters of dispute.

115. There is another aspect to the matter. The termination of a contract, undoubtedly, results in the intrusion into and deprivation of valuable rights, which are vouchsafed to the awardee of the contract. It could be argued that dehors a contractual provision, unless it be that the contract peremptorily provides for the termination of the contract expressly without service of the notice on the occurrence of certain stipulated events, principles of natural justice may not be out of place and under the Theory of Fair State Action, in consonance with Article 14, an opportunity to the awardee as to why the contract should not be terminated, may be just. In this regard, we may recapitulate what this Court in State of U.P. v. Sudhir Kumar Singh and Others36 has, inter alia, held: “23. It may be added that every case in which a citizen/person knocks at the doors of the writ court for breach of his or its fundamental rights is a matter which contains a “public law element”, as opposed to a case which is concerned only with breach of contract and damages flowing therefrom. Whenever a plea of breach of natural justice is made against the State, the said plea, if found sustainable, sounds in constitutional law as arbitrary State action, which attracts the provisions of Article 14 F of the Constitution of India - see Nawabkhan Abbaskhan v. State of Gujarat (1974) 2 SCC 121 at paragraph 7. The present case is, therefore, a case which involves a “public law element” in that the petitioner (Respondent No. 1 before us) who knocked at the doors of the writ court alleged breach of the audi alteram G partem rule, as the entire proceedings leading to cancellation of the tender, together with the cancellation itself, were done on an ex parte appraisal of the facts behind his back.” No doubt, it related to a case of cancellation of the tender after the tenderer had worked thereunder for over a year and based on two 36 H (2020) SCConline SC 847

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 93 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

ex parte enquiries. We may bear in mind that Article 9.1 captures not really the principles of natural justice as such but an opportunity to set right a default by the seller.

116. Having found that the impugned termination Order dated 07.07.2018 ill squares with the requirement of Article 9.1, the question may arise, whether this is a matter which should be the basis for interference in powers of judicial review under Article 226. This is not the basis on which the impugned Judgment is based. Could it be said that this is a matter, which should have formed the subject matter of a proceeding in a civil court. In this regard, we may notice the following aspects: C The object behind giving the default notice under Article 9.1 is to provide an opportunity to the seller under the PPA to comply with the PPA and remove the default within the period of three months. If it is a case where it is demonstrated that removal of the default was an impossibility, then, it would, indeed, be a futile exercise and perhaps, at least, in a writ proceeding based on infraction of Article 14 or that the action is arbitrary, the Court may have refused to exercise the extraordinary jurisdiction and relegate the party to other forum to seek whatever relief it may be entitled to. If on the other hand, complying with Article 9.1 was, indeed, meaningful and the default (Article 9.4.(a) could have been removed as contemplated under Article 9.1, then, undoubtedly, it may constitute arbitrariness to deprive the first respondent of the benefit of a default notice. We cannot be totally unmindful of the fact that such a Clause like Article 9.1 was inserted with the understanding, that, in such large complex projects, involving large sums of money being invested, and furthermore, the successful completion of the project being intended to augment the production of energy, in this case solar energy, there was an element of public interest also involved in not allowing the curtains to be rung down by an abrupt termination without affording an opportunity to the seller to remove the default. Therefore, we would also examine whether there is a case where, it could be said that the case of the first respondent is totally bereft of bonafides or merit.

117. In this case, on 04.07.2017, the first respondent addressed what it purports to be the notice of commercial operations within the meaning of Article 5.3. It reads as follows: H

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A “Ref No. SKP-2/MP/SOLAR/COMM/2017-18/026 Date: 04-07-2017

To B The Chief Engineer (Planning & Design) M P Power Transmission Company Limited, Shakti Bhawan, Rampur, Jabalpur – 482008, Madhya Pradesh. C Subject: Notice to Commission on the 50 MW Solar Power Project of SkyPower Southeast Solar India Private Limited located at Village Chirbel, District Khandwa (“Project”), and Evacuation of Power from the Project to the 400 KV Chhagaon Sostation. Reference: Power Purchase Agreement dated September 18, 2015 D between Southeast Solar India Private Limited and MP Power Management Company Limited (“PPA”). Dear Sir, As per above cited subject matter and reference, we hereby intimate you of our intention to commission the project by 31st E July, 2017 (“Proposed Commissioning Date”). By the Proposed Commissioning Date, we are likely to procure and obtain all permissions and approvals required for the Plant and fulfil and obligations specified in Article 5.3 read with Annexure XII of the PPA. F In relating to the commissioning of the Project by the Proposed Commissioning Date, we would like to apprise you of the progress made by use in relation to completion of some of the critical path items for the Project- • Transmission Line – 95% work has been completed as on G 28th June, 2017 for the 132KV DCDS (double circuit double string) transmission line from location of the Project to the 400KV substation Chhegaon. Balance 5% is expected to be completed by 15th July, 2017 in all respect. • Bay construction- 90% work on the 132 KV bay is completed (post receipt of connectivity approval from MP

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 95 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

Power Transmission Company Limited (“MPPTCL”) for the Project along with installation of specified equipment as required by MPPTCL. Balance 10% of the work, including testing, meter and CRP panel, is expected to be completed by 20th July, 2017. • Connecting Agreement-Connection agreements have already been signed on 18th May, 2017 between Madhya Pradesh Power Transmission Company Limited, Jabalpur and M/s SkyPower Solar India Private Limited. • SLDC connectivity- Connectivity from plant to the SLDC- Indore is already established through dedicated 2nox2mbps C point to point lease lines from BSNL (as per approved scheme of SLDC on 23rd March, 2017 through letter no. SE./LD. E&T/880, data can be transferred immediately on charging of plant). Specified equipment as per approved scheme of SLDC has been installed at SLDC-Indore and at the Project. Even, IP scheme for both the routers has been allocated by the SLDC, Jabalpur (through letter no. SE/LD.E&T/06, dated 3rd April, 2017). • CEIG Certification-We have initiated the process to obtain the CEIG certification, and the CEIG certification is expected by 20th July, 2017. The CEIG certificate shall be produced to MPPTCL as an annexure to obtain the commissioning certificate, as required under the PPA. Considering above facts on project progress we hereby request your kind needful and depute necessary officials and personnels to our site to undertake necessary inspection and testing and help us in the target commissioning dated of 31st July, 2017. In the event, you require any further information from us, we will be happy to provide the same upon your request.” (Emphasis supplied) G

118. No doubt, Article 5.3 contemplates a notice whereunder the seller specifies that the plant was constructed as per the agreement and it was ready to deliver the solar power in accordance with its terms. Secondly, it must be indicated that all permissions and approvals required for the plant to sell solar power at the rates and terms had been obtained. H

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A Still further, all interconnection facilities were available to receive solar power. Notice is to take effect, however, only when the TRANSCO/ DISCOM declares that all the conditions in Article 5.3 stood satisfied (or waived by it), inter alia, i.e., that the seller had successfully completed the testing of the plant in accordance with the manufacturer’s recommendations and the seller had obtained and provided from the B Electrical Inspectorate of the Government of Madhya Pradesh or other authorised agency, a certificate and the seller had delivered a list of the equipments with details. The further condition is that the plant had achieved initial synchronisation with the appellant and had demonstrated reliability of its communication system, inter alia, that the seller had operated the C plant without experiencing any abnormal or any unsafe operating condition on any interconnected system. The seller was also to notify the appellant within no later than 30 days prior to the commercial operations date, that the conditions, as laid down in Article 1.01 have been met.

119. However, the first respondent in the letter dated 04.07.2017 D has intimated about the intention to commission the project by 31.07.2017, which is on the 27th day after the notice. As far as transmission line was concerned, 95 per cent of the work was claimed to have been completed as on the 28.06.2017. Balance 5 per cent, it is stated, would be completed by the 15.07.2017 in all respects. In regard to bay construction, 90 per cent of work was stated to be completed along with installation of certified E equipment. Here also, it is stated that the balance 10 per cent of the work including, testing, meter and CRP panel would be completed by 20.07.2017. Connection agreement is stated to have been signed on 18.05.2017. As far as SLDC connectivity is concerned, it is stated that connectivity to SLDC indoor was already established through dedicated F 2nox2mbps point to point lease lines from BSNL. As far as the certification by the CEIG, it is stated that the process to obtain the CEIG certification would be initiated and it is expected by 20.07.2017. Inspection was prayed for so as to achieve the target commissioning date by 31.07.2017. No doubt, the appellant has proceeded on the basis that the notice dated 04.07.2017 cannot be treated under Article 5.3 of the PPA. G As far as the CEIG Report is concerned, it appears to be dated 09.08.2017. It could no doubt be found that what Article 5.3 notice contemplates is a state of accomplishment of conditions when the notice is sent. However, the notice dated 04.07.2017 promised completion by 31.07.2017. Article 5.3 provides for waiver. If a default notice under H Article 9.1, was given on 07.07.2018, in place of the termination notice,

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 97 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

then, with the state of completion attained and, if anything further remained, doing that also, and issuing the notice, if insisted, the defect could have been removed.

120. In this regard, we may notice a significant distinction between Article 2.5.1 (d) which was used as the sheet anchor by the appellant to contend that in the event of non-achievement of condition subsequent termination was mandatory. Article 2.5.1(d) is as follows: “d) In case of delay of more than 9 months, MPPMCL shall terminate PPA and release balance amount of CPG.” (Emphasis supplied) C

121. When it comes to Article 9.1, we have noticed that it contemplates the giving of default notice when an event of default takes place. The seller is given three months’ time to set right things fully. Thereafter, Article 9.1 provides that in case of the default by the seller not being removed fully, apparently, the appellant by giving seven days termination notice ‘may’ terminate the agreement. The choice of the word ‘may’ importing discretion in Article 9.1 is in stark contrast with Article 2.5.1 (d).

122. Apparently, it was so drafted so that in an event like in a seller event of default under Article 9.4.(a), i.e., failure by the seller to supply power within 24 months, bearing in mind the nature of project and the stakes involved for both the appellant and the seller, there may be cases where the seller may wish to grant more time so that a project which has progressed to a state of near completion may not be aborted by the termination and grant of time would, on the other hand, witness the full blossoming of the project. F

123. It would appear that the appellant did not carry out any inspection. The inspection carried out by the CEIG in first week of August, 2017 was an inspection conducted by the five-member team and it is further claimed that this inspection lasted for 3-4 days beginning from 01.08.2017. The CEIG has certified that the project was ready and that G the first respondent can proceed with the commissioning activity. We bear in mind that the period of twenty-four months contemplated in Article 9.4(a), would expire only on 18.09.2017. The CEIG has given its Report on 09.08.2017 that the project was ready for commissioning. The factum of the Report cannot be treated as a disputed question of fact as it is covered by a document. In fact, we find that, the appellant proceeded H

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A on the basis admittedly that it was reliable, but, however, on 11.08.2017 issued the termination notice solely based on non-fulfilment of conditions subsequent. This notice stood set aside on 20.06.2018. Maybe the manner in which the inspection was carried out and the pitfalls in the same may be characterised as the disputed questions of facts. Also, though the appellant was invited to carry out the inspection on 04.07.2017, the appellant carried out the inspection only on 19.04.2018 and the Report was dated 21.04.2018.

124. If we go by the Report of the CEIG, the project of the respondent would appear to have been completed for the purposes of effecting commissioning. It may be another matter that other formalities had to be completed. When the team of the appellant carried out the physical inspection, (it was done on 19.04.2018), the appellant’s team also substantially endorsed the Report of the CEIG. However, it was found that a certain number of string inverters inter alia, were not found at many locations in Block Nos. 9 and 10. It was found as follows: D “4. Any other specified observation in respect of installation of solar P.V plant In block 9 and 10, string inverters were not found at many location but those location had solar panels installed interconnections of PV panel (cabling) string work at there location are not found connected with each other Further, at some location the cable and earthing work is observed incomplieto & suspended.”

125. It is here that we must notice the case of the first respondent to be that though the equipment was installed as certified in the Report of the CEIG and what remained was formal connectivity to the grid upon which commissioning certificate would be issued, the final event remained on account of non-issuance of connectivity code for connection to the grid. It is while so, when the challenge against the first termination notice was under consideration and there was demobilisation of manpower, certain string inverters were stolen, the cost of which is stated to be Rs.172000 per string inverter. Based on safety concerns, the equipment was, according to the first respondent, removed and kept in safe custody. The first respondent has laid store by two first information reports lodged. The first FIR was lodged on 12.09.2017 and another FIR was lodged on 04.03.2018 relating to the theft of certain equipments. This is a case where the first respondent has alleged that it has already invested Rs.331 crores.

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 99 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

126. We will proceed on the basis that there was a CEIG Report A dated 09.08.2017 certifying that the project of the first respondent was complete. This is well before 18.09.2017, which was the date by which the commissioning had to be done. It is also clear that the commissioning, as such, was not completed. Still further, if we go by the CEIG Report, the case of the first respondent of it being on the verge of commissioning could not be brushed aside as wanting in bonafides or merit. Still further, there is a case of the appellant that the inspection carried out on 19.04.2018, resulting in Report dated 21.04.2018, revealed certain deficiencies in the form of missing inverters inter alia from Block Nos. 9 and 10 inter alia. First respondent has a case of thefts occurring. In fact, the first respondent has a definite case that about 39 inverters involved were also replaced in June, 2018 based on Purchase Order of May 2018 [See Annexure R12 produced before the High Court in Review Petition No.682 of 2020]. This is even before 07.07.2018. No doubt, the appellant has a case that the FIRs relied on by the first respondent did not refer to inverters. As to whether, it was a result of thefts that the inverters etc. which were already there as on the date of the CEIG inspection went subsequently missing or as to whether it was as a result of the Report of the CEIG being flawed and, therefore, the inverters etc. were not there in the first place, even as on the date of the CEIG Report, appears to us to be a disputed question of fact. We proceed on the basis that the inverters in question were not there. But as noticed, about 39 stolen invertors were already replaced in June 2018. At any rate, if a default notice had been given pointing out this aspect, the matter could possibly be put right within three months of such a notice. We recall here the few complaints (essentially two in number) which remained of Respondent No.5. It could have been pointed out as part of aspect of default if it was so understood. We have also found that the joint inspection of the respondent No.4 had found on 24.08.2017 that the line may be charged. What we can find is only that this is not a case where the first respondent could be said to be in a position where it could be said that it would be unable to comply with the terms of the default notice if it was warranted. In other words, if as on 07.07.2018, instead of issuing a G termination notice, if notice had been given within the meaning of Article 9.1, it is quite possible that the first respondent would have remedied the defect as alleged. We have also noted that even in 2017, no notice was given under Article 9.1 and even the contract was terminated illegally as found by the High Court by notice dated 11.08.2017. The whole idea H

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A behind the default notice under Article 9.1 was lost sight of by the appellant. We have unravelled also, the impact of the use of the word ‘may’ in Article 9.1. The action of the appellant in departing from unambiguous regime of the PPA without any justification would make its actions arbitrary.

127. The other aspect projected by the appellant is what was projected in the Review Petition filed before the High Court. It was contended essentially as follows: The first respondent had committed a fraud on the Office of the Chief Electrical Inspector, the appellant and on the Court. C It was alleged that the project was divided into 10 blocks of 5MW each and each Block of 5MW would have 116/117 Inverters approximately. Each of the Inverter was to have a unique distinctive serial number. Each inverter was to have 43KV rating, as indicated in the CEIG Report. The fraud consisted of a discovery by the appellant on an alleged ‘detailed’ analysis of the serial numbers of the inverters, that in each Block, there were several Inverters having numbers which were common/duplicate and interchangeably used in the same or other blocks. It was alleged that for about 186 Invertors serial numbers were commonly, duplicably and interchangeably used. Some of the inverter numbers were not legible. Therefore, it was alleged that there was lack of due diligence by the authorised personnel of the CEIG.

128. In this regard, the first respondent has countered the case of the appellant not only by producing invoices supplied by the overseas supplier and the bill of entry issued by the Customs Department but the Lorry Receipts, to establish the procurement of 1175 Inverters required for the first respondent Unit in 2017. It is also their case that the inverter serial numbers themselves carry no significance. They were mere identifiers for the purpose of record keeping, warranty claims, etc. All the 1163 Inverters installed by the first respondent had identical mechanical specification and the mere mention of incorrect serial numbers in the Report of the CEIG did not establish that the first respondent was not ready to commission the project. The first respondent also has pointed out that on learning of the duplication of the few inverters serial numbers in the Report of the CEIG, it promptly approached the CEIG on 16.09.2020 H with details of the correct unique serial numbers and the corresponding

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 101 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

location of the inverters. It requested the CEIG to inspect and verify the inverters and to issue a corrigendum to the first Report dated 09.08.2017. In fact, there is reference to first respondent in compliance with the first impugned Judgment writing to the CEIG earlier on 15.04.2020, to visit the project site for reissuing/revalidating the approval for commissioning the project, since the validity of the first report dated 09.08.2017 had lapsed. It is specifically contended in the reply to the Review Petition that due to non-cooperation of the appellant on the excuse of Covid-19, the CEIG inspection could not be undertaken. This stand is reiterated, in fact, in the counter affidavit in this Court also. It would appear that the first respondent had deposited the inspection fee of Rs.66,14,000/- which is said to be equipment based meaning thereby that it was paid reckoning all the inverters. It would appear that no inspection has been carried by the CEIG based on the request for revisit. As far as this aspect is concerned, apart from the fact that the CEIG has conducted an inspection and given a Report on 09.08.2017, certifying the readiness of the Unit of the first respondent, the first respondent has produced documents like invoices from overseas sellers, bill of entry with the Customs Department and certain lorry receipts. The alleged fraud is the common number found in 186 inverters in the Report of the CEIG. A physical inspection by the CEIG, which was necessitated in terms of the original Judgement, at any rate, for revalidation of the Report was and is necessary and inevitable even if the appeals fail. The first respondent had alerted the E CEIG for the need for a reinspection for ascertaining the aspect relating to duplication in numbers. It would appear that such inspection has not been carried out. In this regard, it is important to notice that the appellant carried out an inspection on 19.04.2018 and it had not found out any such discrepancy as it has not projected in regard to the aspect of common numbers or illegibility of numbers, in the inverters, in its Report dated 21.04.2018. At any rate, the PPA clearly provided for the issuance of a default notice, providing an opportunity to remove the defect. This obligation has been observed in its breach.

129. Therefore, we would find that an inspection by the CEIG would necessarily have to be carried out in which the appellant would have to be involved to facilitate the exercise. In the facts of this case, on being satisfied, the CEIG would necessarily have to grant the re-validation of the earlier Report. It would also involve an opportunity to the CEIG to look into the aspects which have been projected by the fist respondent itself in its letter dated 16.09.2020. The report would indeed indicate the H

p. 101 — page break not located

p. 102

A state of affairs about all the facets. As already noticed, even under the impugned Judgement dated 27.02.2020, the first respondent would have to submit necessary applications. We only clarify that it may involve removing any remaining deficiencies with the fifth respondent.

130. It may not be wholly irrelevant to notice the following aspect B which is reflected in the counter affidavit filed by the respondent No.1 before this Court. “It is of utmost importance to mention here that while the challenge to the 2018 Termination Notice was pending, the Petitioner had proposed a so-called amicable resolution of the dispute with the C Respondent No.1 and convened a meeting for this purpose on February 6, 2020. Occurrence of this meeting and the discussions held are recorded at paragraphs 7 and 8 of the Impugned Order

1. During this meeting, the Petitioner had attempted to impress upon the Respondent No.1 to explore ‘Third Party Sale’ from the project or, agree to a reduction in tariff in line with the recent auctions conducted by SECI for other solar power projects. Respondent No.1 had rejected both the option of ‘third Party Sale’ or, the attempts to reduce tariff specified in Article 9.7 of the PPA, which was discovered through a transparent competitive bidding process. The very fact that the Petitioner had proposed to the respondent No.1 to explore sale of power from the Project to third parties is proof enough that the Project was complete and ready for commissioning.” In this regard, we may notice paragraph 4 of the minutes of the meeting dated 06.02.2020 which reads as follows: - F “4. MPPMCL further stated that, as the commissioning of the project has been substantially delayed and, in the meantime solar binding tariffs have been considerable reduced up to Rs. 2.61/ Unit for which MPPMCL has already entered into PPAs, therefore MPPMCL offered M/s Sky Power to supply power at reduced G tariff of the project was the lowest in the bid and their investment was made during the FY 2016-2017 therefore, supplying power to MPPMCL at reduced tariff will not be viable hence not possible.” We would think that essentially the appellant’s attempt was to secure a reduction in the rate. The rate of the first respondent was H

M. P. POWER MANAGEMENT COMPANY LTD., JABALPUR v. M/S. SKY 103 POWER SOUTHEAST SOLAR INDIA PVT. LTD. [K. M. JOSEPH, J.]

found to be the lowest after a clearly keenly competitive international A bidding, involving a large number of bidders.

131. In the totality of facts, we would, therefore, think that though for reasons, which may not be the same as in the impugned judgment, we need not interfere with the view taken by the High Court. The appeals fail and are dismissed. Parties to bear their own costs. B

Bibhuti Bhushan Bose Appeals dismissed. (Assisted by : Neha Sharma, LCRA)