The High Court of Kerala dismissed a writ petition filed by a solar power company seeking to quash the termination of an agreement and realization of a bank guarantee by KSEB and related parties.
The writ petition seeking to quash the bank guarantee realization order was dismissed as the invocation was found justifiable.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
WEDNESDAY, THE 17TH DAY OF FEBRUARY 2021 / 28TH MAGHA,1942
WP(C).No.24907 OF 2020(K)
PETITIONER:
M/s ALECTRONA ENERGY PVT. LTD., REP. BY ITS MANAGING DIRECTOR, MR.ROHIT RABINDERNATH, S/O.LATE MR.RABINDERNATH, AGED 42 YEARS, HAVING ITS REGISTERED OFFICE AT 3RD FLOOR, BLOCK A, BANNARI AMMAN TOWERS, NO.29, DR.RADHAKRISHNAN ROAD, MYLAPORE, CHENNAI-600 004
BY ADVS. SRI.M.R.HARIRAJ SRI.THANUJA ROSHAN GEORGE SHRI.VISHWAJITH C.K SMT.GANGA A.SANKAR SHRI.CHACKOCHEN VITHAYATHIL SMT.GISHA G. RAJ SHRI.REJIVUE
RESPONDENTS:
1 KERALA STATE ELECTRICITY BOARD LTD., A GOVT OF KERALA UNDERTAKING, REP. BY ITS CHIEF ENGINEER 9TH FLOOR, VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM-695 001
2 STATE OF KERALA, REP. BY THE SECRETARY TO GOVERNMENT OF KERALA, DEPARTMENT OF ELECTRICITY, THIRUVANANTHAPURAM-695 001
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3 DCB BANK LTD., HAVING ITS CENTRAL OFFICE AT 601 AND 602, PENINSULA BUSINESS PARK, 6TH FLOOR, TOWER A, SENAPATHI BAPAT MARG, LOWER PAREL, MUMBAI 400013, REP. BY ITS MANAGER NUNGAMBAKKAM BRANCH
R1 BY ADV. SRI.SUDHEER GANESH KUMAR.R.,SC R2 BY GOVERNMENT PLEADER SMT. RASHMI K.M.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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J U D G M E N T
~ ~ ~ ~ ~ ~ ~ ~ ~
Dated this the 17th day of February, 2021
The petitioner, a Company in the business of manufacture and installation of Solar Photovoltaic Modules, Electronic Controls, Solar Inverters and Solar Water pumps, is before this Court seeking to quash Ext.P19 and to direct the respondents to allow the petitioner to complete the execution of agreement.
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a meeting relating to execution of the contract on 21.02.2019. The petitioner submitted Ext.P5 revised schedule of project implementation. The petitioner also sent Ext.P6 e-mail with an update on the AC and DC works. In the said e-mail, the petitioner informed the respondents of engaging of local labour as local contractor. The respondents took the engagement of local labours as sub contract and on that ground and without issuing any show-cause notice, issued Ext.P7 terminating the project agreement.
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Dispute Resolution Committee was constituted and a meeting was held on 04.02.2020. In the said meeting, the petitioner pointed out that the original photovoltaic modules offered in the contract have become obsolete and the petitioner is ready to provide their own modules of new model, which are more efficient, without any additional cost.
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that the termination of the agreement without hearing the petitioner is violative of the principles of natural justice. The termination of the project agreement is devoid of any justifiable reason. There was no deficiency on the part of the petitioner in executing the work. The Dispute Resolution Committee deemed it fit to extent the time of the contract. The petitioner also offered to complete the contract with new technology module. When the petitioner was willing to complete the project using new technology module and since there was extension of time to complete the agreed work, the respondents are not justified in invoking the Bank Guarantee.
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respondents are justified in invoking invoking the Bank Guarantee. A prior notice or determination or quantification of loss is not required for invoking Bank Guarantee, contended the Standing Counsel for the respondents.
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over the site for implementation of the project. The project had to be completed by 13.02.2019. The respondents granted extension of time to the petitioner-Company. It is the case of the respondents that the petitioner has not even started the work. The delay in execution of the work is therefore attributable to the petitioner.
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that is within three months from 12.02.2019, it was not done. In the circumstances, this Court is of the considered opinion that the decision of the respondents to invoke and realise the Bank Guarantee is justifiable.
In view of all the above facts, this Court finds no reason to interfere with the decision of the respondents in invoking Bank Guarantee. The writ petition fails and it is accordingly dismissed.
Sd/- N. NAGARESH, JUDGE
aks/17.02.2021
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APPENDIX
PETITIONER'S EXHIBITS:
| EXHIBIT P1 | TRUE (RESS |
COPY )/SPV- |
OF TENDER NO.8/KSEBL/CE MYLT/1.0MW/ 2016-17 |
|---|---|---|---|
| EXHIBIT P2 | TRUE DATED |
COPY 7.12. |
OF WORK ORDER NO.4/2017-18 2017 |
| EXHIBIT P3 | TRUE DATED |
COPY 1.3.2 |
OF AGREEMENT NO.20/2017-18 018 |
| EXHIBIT P4 | TRUE 21.2. |
COPY 2019 |
OF MINUTES OF MEETING DATED |
| EXHIBIT P5 | TRUE PROJE THE P |
COPY CT I ETITIO |
OF REVISED SCHEDULE OF MPLEMENTATION SUBMITTED BY NER |
| EXHIBIT P6 | TRUE PETIT |
COPY IONER |
OF EMAIL SENT BY THE DATED 20.6.2019 |
| EXHIBIT P7 | TRUE PROJE DATED |
COP CTS/AE 2.7.2 |
Y OF ORDER NO.CE(RESS) E1/SPV MYLATTY/2019-20/532 019 |
| EXHIBIT P8 | TRUE PETIT DATED |
COPY IONER 10.7. |
OF EMAIL SENT BY THE TO THE FIRST RESPONDENT 2019 |
| EXHIBIT P9 | TRUE 30.9. HONOU |
COPY 2019 RABLE |
OF THE JUDGMENT DATED IN WP(C) 20009/2019 OF THIS COURT |
| EXHIBIT P10 | TRUE 3.10. |
COPY 2019 |
OF REPRESENTATION DATED |
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| EXHIBIT P11 | TRUE COPY | OF THE MINUTES O | F THE |
|---|---|---|---|
| MEETING COMMITTEE O |
OF DISPUTE RESO N 4.2.2020 |
LUTION | |
| EXHIBIT P12 | TRUE COPY 3.3.2020 |
OF THE REPRESENTATION | DATED |
| EXHIBIT P13(A) | TRUE COPY SOLAR/MYLAT 19.2.2020 |
OF THE LETTER NO.CE( TY/1MW/2019-20/2045 |
REES)/ DATED |
| EXHIBIT P13(B) | TRUE COPY SOLAR/MYLAT 19.2.2020 |
OF THE LETTER NO.CE( TY/1MW/2019-20/2047 |
REES)/ DATED |
| EXHIBIT P14 | TRUE COPY PROJECTS/AE DATED 1.4.2 |
OF THE LETTER NO.CE( EZ/SPV/MYLATTY/2019-2 020 |
REES)/ 0/2341 |
| EXHIBIT P15 | TRUE COPY 23.6.2020 |
OF REPRESENTATION | DATED |
| EXHIBIT P16 | TRUE COPY 27.6.2020 |
OF REPRESENTATION | DATED |
| EXHIBIT P17 | TRUE COPY 29.8.2020 |
OF REPRESENTATION | DATED |
| EXHIBIT P18 | TRUE COPY 20.10.2020 |
OF REPRESENTATION | DATED |
| EXHIBIT P19 | TRUE COPY PROJECTS/AE DATED 12.11 |
OF LETTER NO.CE( -2/SPU MYLATTY/ 2020- .2020 |
REES)/ 21/888 |
| EXHIBIT P20 | TRUE COPY SOLAR DATED |
OF OM.NO.283/18/202 13.8.2020. |
0-GRID |
| EXHIBIT P21 | TRUE COPY DATED 12.11 |
OF OM NO.F.9/4/20 .2020 FOR BID SECURIT |
20-PPD Y. |
| EXHIBIT P22 | TRUE COPY DATED 12. SECURITY. |
OF OM NO.F.9/4/20 11.2020 FOR PERFO |
20-PPD RMANCE |
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| EXHIBIT P23 | OM.F.NO.32/645/2017- (PART-3) DATED 07.12 |
SPV DIVISION .2020. |
|---|---|---|
| EXHIBIT P24 | TRUE COPY OF THE CER | TIFICATE ISSUED BY |
| THE TUVRHEINLAND FO THE PETITIONER |
R THE PRODUCT OF |
|
| EXHIBIT P25 | TRUE COPY OF LET | TER NO.1016/SHLS- |
| CFL/SCHEMES/2013-14 | DATED 10/12/2020 | |
| ISSUED BY TAMILNADU AGENCY. |
ENERGY DEVELOPMENT | |
| EXHIBIT P26 | TRUE COPY OF THE | LETTER REFERENCE |
| NO.NREDCAP/SE/SPVPS/ | ISSUE OF |
|
| EXPERIENCE CERTIFIC | ATE/2017-18 DATD | |
| 23/4/2018 ISSUED BY | NEW AND RENEWABLE | |
| ENERGY DEVELOPMENT ANDHRA PRADESH LTD. |
CORPORATION OF | |
| EXHIBIT P27 | TRUE COPY OF CERTIFI REFERENCE NO.3917 |
CATE OF COMPLETION /CREDA/SSY/2019-20 |
| DATED 19/6/2019 ISSU | ED BY CHHATTISGARH | |
| STATE RENEWABLE E AGENCY (CREDA) |
NERGY DEVELOPMENT | |
| EXHIBIT P28 | TRUE COPY OF C | ERTIFICATE DATED |
| 28/1/2016 ISSUED BY TRUST |
THE CHENNAI PORT | |
| EXHIBIT P29 | TRUE COPY OF PERFO DATED 17/1/2017 ISS TRADING NETWORK FOR GUJARAT |
RMANCE CERTIFICATE UED BY GRASSROOT WOMEN, AHMEDABAD, |
RESPONDENTS' EXHIBITS:
EXHIBIT R1 A THE TRUE COPY OF THE BANK GUARANTEES EXECUTED BY THE PETITIONER DATED 03.02.2018. EXHIBIT R1 B THE TRUE COPY OF LETTER DATED 19.12.2017, E-MAIL DATED 05.01.2018 AND LETTER DATED 05.02.2018 FROM THE PETITIONER SEEKING TIME EXTENSION FOR EXECUTING THE AGREEMENT. EXHIBIT R1 C THE TRUE COPY OF B.O (FTD) NO.05/2020(CE(REES)/SPV-MYLTY/2019-20) TVPM DATED 06.01.2020 REGARDING FORMATION OF DISPUTE RESOLUTION COMMITTEE. EXHIBIT R1 D THE TRUE COPY OF B.O(FTD) NO.244/2020/ CE(REES)/SPV-MYLTY/2019-20 DATED, TVM 30.03.2020 REGARDING TIME EXTENSION.
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EXHIBIT R1 E THE TRUE COPY OF LETTER AND E-MAIL DATED 01.04.2020 REGARDING THE TIME EXTENSION. EXHIBIT R1 F THE TRUE COPY OF LETTER DATED 07.06.2018, 08.10.2018 REGARDING THE MAKE OF PV MODULES.
SR
3 issues framed by the court
Whether the decision of the respondent to invoke the bank guarantee against the petitioner for non-completion of the solar project is justifiable.
Whether natural justice principles were violated by terminating the project without issuing a show-cause notice.
Whether the petitioner was entitled to an extension of time for the project completion.
Colour shows how this judgement treated each authority
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As recorded by the court registry
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