Grew Energy Private Limited was awarded a supply contract for Solar PV Modules by NTPC Renewable Energy Limited for a 1000 MW Solar Park Project. Following GREW’s non-execution of the formal agreement and non-submission of the CPG, NTPC encashed GREW’s bid security, issued a Termination Notice invoking the Termination for Default and Risk Purchase provisions of the GPC, retendered the package, and subsequently issued a Suspension Order debarring GREW from future NTPC tenders.
GREW challenged all three actions before the Delhi High Court. The Hon’ble Division Bench partly allowed the Writ Petition, holding that: (i) the Termination Notice, to the extent it invoked the Termination for Default and Risk Purchase provisions of the GPC, was unsustainable. It indicated that the specific remedy of annulment of award and forfeiture of EMD under the GPC and SPC governed the default; (ii) the Suspension Order was set aside for violation of principles of natural justice, the Court holding that an order equated to debarment under the Debarment Policy could not be issued without affording procedural safeguards; and (iii) while the Retender Notice was not interfered with, the Court clarified that no risk-purchase action against GREW could be sustained on its basis.
The matter raised nuanced questions on the interplay between general and specific contractual remedies in public procurement, the applicability of natural justice to suspension orders under a debarment policy, and the preconditions for valid risk-purchase action. The judgment reinforces that Government procurers must adhere strictly to prescribed contractual remedies and procedural safeguards before imposing commercially significant consequences such as debarment or risk-purchase liability on suppliers.
The team was led by Monark Gahlot, Partner; with assistance from Priyal Shah, Senior Associate; and Parthiv Gandhi, Associate.
The team was also supported with on-site assistance by Nihaad Dewan, Principal Associate; Gunav Gujral and Bhawna Lakhina, Associates.
