Mr. Puneet Taneja, Sr. Advocate with Mr. Anil Kumar, Mr. Manmohan Singh Narula and v. PRECISION TECHNIK PRIVATE LIMITED

Judgment

1. The present cross-appeals under Section 37 of the Arbitration and Conciliation Act, 19961, arise from the impugned order dated 18.12.20182 passed by the learned Single Judge in OMP (Comm) No. 481/2016, titled “NTPC Vidyut Vyapar Nigam Ltd. vs. Precision Technik Private Limited”. By the said order, the learned Single Judge partially set aside the Arbitral Award dated 08.05.2015 and permitted NTPC Vidyut Vyapar Nigam Ltd. (hereinafter „NTPC‟) to retain the sum of Rs. 1,82,13,000/-, which it had received upon encashment of the Performance Bank Guarantee3 furnished by Precision Technik Private Limited (hereinafter „PTPL‟). 2. Essentially, NTPC has filed FAO(OS)(COMM) 42/2019, seeking complete setting aside of the Arbitral Award and permission to encash the PBG for the delay period between 08.02.2012 and

21.02.2012, while PTPL has preferred FAO(OS)(COMM) 128/2019, challenging the Impugned Order insofar as it allows NTPC to retain Rs.1,82,13,000/- from the encashment of the PBG. 1 A&C Act 2 Impugned Order 3 PBG Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:21.07.2025 17:31:55 FAO (OS) (COMM) 42/2019 and 128/2019 Page 2 of 32 BRIEF FACTS: 3. On 25.07.2010, the Ministry of New and Renewable Energy4, Government of India, issued Guidelines for Phase-1, Batch-1 for the Selection of Grid-connected Solar Power Projects. Under these Guidelines, NTPC was designated as the Nodal Agency to facilitate the procurement of solar power from Solar Power Developers. Pursuant thereto, NTPC issued a Request for Selection5, inviting interested project developers to participate in the selection process. In response, PTPL submitted its bid on 21.09.2010, and a Letter of Intent was issued to it by NTPC on 11.12.2010. 4. On 10.01.2011, the parties executed a Power Purchase Agreement6 for setting up a 5 MW solar power project at Pokhran, Rajasthan. In terms of Article 3.1 of the PPA, PTPL was required to complete the activities listed therein within 180 days from the "Effective Date" of the PPA, which, as per Article 2.1.1, was

10.01.2011. PTPL was obligated to complete the project and commence power supply up the Contracted Capacity by

09.01.2012, 12 months from the signing of the PPA, which was defined as the Scheduled Commissioning Date under Article 1.1. 5. On 14.02.2012, the Superintendent Engineer, Jodhpur, declared that PTPL‟s project had been commissioned on 08.02.2012. Owing to the delay of approximately one month beyond the Scheduled Commissioning Date, NTPC, invoking Article 4.6 of the PPA, encashed 20% of the PBG dated 05.01.2011. 6.

Power was first injected into the grid from PTPL‟s project on

21.02.2012. Subsequently, pursuant to a direction issued by MNRE, 4 MNRE 5 RfS 6 PPA Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:21.07.2025 17:31:55 FAO (OS) (COMM) 42/2019 and 128/2019 Page 3 of 32 the Rajasthan Renewable Energy Corporation Limited7 determined the Commissioning Date of PTPL‟s project as 22.03.2012. Based on this, NTPC contends that installation of all project-related equipment was completed only on 22.03.2012. 7. On 03.05.2012, PTPL invoked arbitration under Article 16.3.2 of the PPA. The dispute was accordingly referred to an Arbitral Tribunal for adjudication. 8. The Arbitral Award was rendered on 08.05.2015, wherein the learned Tribunal allowed PTPL‟s claims by holding that the delay in commissioning was caused by delays on the part of government authorities in granting necessary permissions, clearances, and approvals for laying the transmission line from the project site to the pooling sub-station, which constituted a force majeure event under the PPA and was beyond PTPL‟s control, and further held that the actual commissioning date of 21.02.2012 should be treated as the Scheduled Commissioning Date, thereby rendering NTPC‟s encashment of the Performance Bank Guarantee unjustified. 9. Aggrieved by the Award, NTPC filed objections under Section 34 of the A&C Act before the learned Single Judge, who, by the Impugned Order dated 18.12.2018, partly set aside the Award by permitting NTPC to retain the encashed amount under the PBG on the reasoning that once all equipment was installed and energy began flowing into the grid, the project was deemed commissioned as of

21.02.2012, resulting in a 43-day delay from the Scheduled Commissioning Date, and since obtaining all necessary consents, clearances, and permits was PTPL‟s responsibility, the delay was foreseeable and not a force majeure event. The Ld. Single Judge, 7 RRECL Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:21.07.2025 17:31:55 FAO (OS) (COMM) 42/2019 and 128/2019 Page 4 of 32 however, rejected NTPC‟s claim for encashment relating to the period between 08.02.2012 and 21.02.2012 as unsustainable. 10. Both parties, aggrieved by different aspects of the Order dated

18.12.2018 passed by the learned Single Judge in OMP (Comm) No. 481/2016, have filed the present cross-appeals. SUBMISSIONS OF NTPC:

11. Learned senior counsel for NTPC would submit that the learned Arbitral Tribunal erred in construing Article 11.3.1 of the PPA as an inclusive definition of “Force Majeure”, whereas the clause clearly uses the term “means”, indicating an exhaustive enumeration of events, and as held in S.K. Gupta v. K.P. Jain8, such usage excludes any events not expressly mentioned; therefore, the learned Tribunal, by including delays in government approvals and transmission line works, both within the contractor‟s scope, effectively rewrote the contract, which it had no jurisdiction to do, and this constitutes a patent illegality under Section 34 of the A & C Act, as rightly held by the learned Single Judge. 12. Learned senior counsel for NTPC would further submit that the PTPL‟s reliance on Section 56 of the Indian Contract Act, 19729 is wholly misconceived, since Article 11.3.1 of the PPA contains an express force majeure clause, and as held in Energy Watchdog v. CERC10 and Bangalore Electricity Supply Co. Ltd. v. Hirehalli Solar Power Project LLP11, where a contract provides for specific contingencies under Section 32, the doctrine of frustration under