Public Interest Cannot be Conflated with an Evaluation of Monetary Gain or Loss Alone: Supreme Court  

public interest

The Supreme Court ruled that public interest cannot be conflated with an evaluation of the monetary gain or loss alone. 

Background 

The appellant impugned the Judgment of the High Court in Writ Petition. It further challenged the Order in Review Petition. By the said Judgment in the Writ Petition, the High Court allowed the Writ Petition filed by the first respondent and quashed the Order, which was passed by the appellant, terminating the Power Purchase Agreement which was entered into by the appellant and the first respondent. The review filed by the appellant was dismissed.

Arguments 

K.M. Natraj, Additional Solicitor General contended that the PPA contemplated provisions to resolve disputes. 

He further contended that first respondent should have resorted, if at all, to a civil suit to claim redress. 

He pointed out that a writ petition is a public law remedy. The contract in question not being statutory in nature, there was no public law element so as to justify the approach under Article 226. 

Senior Advocate A.M. Singhvi, appearing for the first respondent, pointed out that there is absolutely no basis for maintaining the appeal in the facts. 

He contended that this is a case where the first respondent turned out to be the lowest bidder in respect of the project in question and what is more, an incredible number of 182 bidders participated.

He submitted that there is no basis for discriminating the case of the first respondent and M/s. Renew Energy.

Decision 

The division bench of Justice K.M. Joseph and Justice Hrishikesh Roy found that the concept of overwhelming public interest has essentially evolved in the context of cases relating to the award of contract by the State. 

“We do not go on to say that consideration of public interest should not at all enter the mind of the court when it deals with a case involving repudiation of a claim under a contract or for that matter in the termination of the contract” , the court said.

The court noted that the rates were in fact settled on the basis of international competitive bidding and in which as many as 182 bidders participated and the rate offered by the first respondent was undoubtedly the lowest. 

It was observed by the court that the fact that power has become cheaper in the market subsequently by itself should not result in non-suiting of the complaint of the first respondent, if it is found that a case of clear arbitrariness has been established by the first respondent. 

It was further observed by the court that PPA clearly indicates the issuance of a default notice when the seller commits an act of default. Without issuing the first default notice, giving three months’ time from the date of issue of the notice, the second notice, which would be a notice of termination, cannot be issued. 

The bench stated that essentially the appellant’s attempt was to secure a reduction in the rate. The rate of the first respondent was found to be the lowest after a clearly keenly competitive international bidding, involving a large number of bidders. 

The court dismissed the appeals. 

Case title: M.P. Power Management Company Limited, Jabalpur v/s M/S. Sky Power Southeast Solar India Private Limited & Others

Citation:  SLP (C) Nos.4609-4610 OF 2021

Click here to read the Order/Judgment 

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