Summary: In a legal battle between M/S Saisudhir Energy Ltd and NTPC Vidyut Vyapar Nigam Ltd, the Supreme Court addressed delays in a solar power project. The court decided on financial penalties due to delayed commissioning, balancing both parties' interests.
In 2010, the Indian government launched the Jawaharlal Nehru National Solar Mission (JNNSM) to promote solar energy. NTPC Vidyut Vyapar Nigam Ltd (NVVNL) was set as the main agency. M/S Saisudhir Energy Ltd (SEL) entered a Power Purchase Agreement (PPA) with NVVNL on January 24, 2012, to supply 20 MW of solar power by February 26, 2013.
Saisudhir Energy Ltd faced delays, producing only 10 MW by April 26, 2013, and the rest by July 24, 2013. NTPC Vidyut Vyapar Nigam Ltd demanded financial penalties for the delay. Saisudhir Energy Ltd sought to prevent NTPC Vidyut Vyapar Nigam Ltd from cashing in bank guarantees through legal means.
A three-member Arbitral Tribunal was formed, which awarded ₹1.2 crores to NTPC Vidyut Vyapar Nigam Ltd. However, both parties were unhappy and moved to the Delhi High Court under Section 34 of the Arbitration and Conciliation Act, 1996.
The Delhi High Court initially increased the penalties to ₹27.06 crores, later reduced by a Division Bench to ₹20.70 crores. Saisudhir Energy Ltd argued that NTPC Vidyut Vyapar Nigam Ltd didn't prove actual losses, while NTPC Vidyut Vyapar Nigam Ltd maintained it was a public utility project, hence no proof was needed.
On January 30, 2026, the Supreme Court, with Justice Atul S. Chandurkar presiding, overturned the Division Bench's decision, restoring the Single Judge's ruling of awarding 50% of the calculated penalties, amounting to ₹27.06 crores.
Public Utility Argument: NTPC Vidyut Vyapar Nigam Ltd's project was deemed in public interest, aligning with environmental goals.
Financial Penalties Clause: Clause 4.6 of the PPA specified penalties for delays, which Saisudhir Energy Ltd was found responsible for.
Court's Power: The court emphasized its ability to modify awards under Section 34, focusing on fair compensation without re-evaluating merits.
The Supreme Court's decision underscores the importance of adhering to contractual timelines, especially in projects of public interest. Both parties were instructed to bear their own costs, concluding a lengthy legal saga over solar energy deployment delays.
