NDLI: M. P. Power Management Company Limited, Jabalpur Vs. M/s. Sky Power Southeast Solar India Private Limited & Others

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Electricity Laws – Electricity Act 2003 – ss.63 and 62 – Contract – Non-statutory contract
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13 Referred Case 14 Referred Case 15 Referred Case 16 Referred Case 17 Referred Case 18 Referred Case 19 Referred Case 20 Referred Case 21
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Electricity Laws – Electricity Act, 2003 – ss.63 and 62 – Contract – Non-statutory contract – Power Purchase Agreement (PPA) entered into by the appellant and the first respondent, if a statutory contract – Held: The PPA was not made either in purported compliance with the statutory dictate, either in the form of parent enactment or a subordinate legislation – The terms and conditions of the PPA were not transplanted into the PPA from any statutory provision – That tariff was arrived at in accordance with the transparent process of bidding, which was in tune with the guidelines u/s.63, may not be sufficient to make the PPA a Statutory Contract – A contract containing prescribed terms and conditions being mandatory under the Statute, results in the contract becoming a Statutory Contract – If this test is applied, one fails to see how reference to the bidding guidelines, under which the bids were made and finally the PPA was entered into, can be treated as tantamounting to saying that the PPA contains prescribed statutory terms and conditions as an indispensable part of a Statute – The expression ‘terms and conditions’, which are statutory in nature, must be understood as those statutory terms and conditions, which provide for rights and obligations of the contracting parties – Such reference is conspicuous by its absence in the PPA – It may not be appropriate to describe the PPA as a Statutory Contract. Contract – Administrative action – Judicial Review – Scope of judicial review of action by the State in a matter arising from a non-statutory contract – Held: The mere fact that relief is sought under a contract which is not statutory, will not entitle the respondent-State in a case by itself to ward-off scrutiny of its action or inaction under the contract if the complaining party is able to establish that the action/inaction is per se arbitrary – Even if it is a non-statutory contract, there is no absolute bar in dealing with a cause of action based on acts or omission by the State or its instrumentalities even during the course of the working of a contract. Administrative Law – Arbitrariness in State action – When an act is to be treated as arbitrary – Held: The court must carefully attend to the facts and the circumstances of the case – It should find out whether the impugned decision is based on any principle – If not, it may unerringly point to arbitrariness – If there is absence of good faith and the action is actuated with an oblique motive, it could be characterised as being arbitrary – A total non-application of mind without due regard to the rights of the parties and public interest may be a clear indicator of arbitrary action – A wholly unreasonable decision which is little different from a perverse decision under the Wednesbury doctrine would qualify as an arbitrary decision under Art.14 – Ordinarily visiting a party with the consequences of its breach under a contract may not be an arbitrary decision – Constitution of India – Art. 14.
Judge	Hon'ble Mr. Justice K.M. Joseph
Neutral Citation	2022 INSC 1208
Petitioner	M. P. Power Management Company Limited, Jabalpur
Respondent	M/s. Sky Power Southeast Solar India Private Limited & Others
SCR	[2022] 5 S.C.R. 1
Judgement Date	2022-11-16
Case Number	8515-8516

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