# RITHWIK ENERGY GENERATION PVT. LTD v. BANGALORE ELECTRICITY SUPPLY CO. LTD. & ORS. ETC

- **Citation:** [2018] 1 S.C.R. 1023
- **Court:** Supreme Court of India
- **Decided:** 2018-02-06
- **Case number:** Civil Appeal Nos. 5084-5085 of 2015
- **Bench:** R. F. Nariman, Navin Sinha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rithwik-energy-generation-pvt-ltd-v-bangalore-electricity-supply-co-ltd-ors-etc-32610
- **Pages:** 12

## Headnote

Electricity: Supply under Open Access System - PPA between
appellant and respondent no.1 - State Commission did not accord
approval to the PPA and returned the same - Appellant filed O.P.
before State Commission seeking declaration that no valid PPA
subsisted between them - State Commission dismissed the O.P. -
Appeal before Appellate Tribunal - During pendency of appeal,
appellant sent Letter dated 5.5.2011 to respondent no.1 mentioning
the defaults in making payment for power bill and interest and
default in opening letter of credit and seeking permission to sell the
power to third party - Meanwhile appellant sought to bring
subsequent events on record for decision of appeal - Appellate
Tribunal examined the subsequent events on merits and ultimately
dismissed the appeal holding that no notice to remedy the default
or termination notice was served by appellant on the respondent
no.1 - On 11.5.2012, appellant sent notice of termination -
Respondent no.1 made certain payments and also opened letter of
credit and thereafter filed O.P. before State Commission seeking
declaration that termination of PPA by appellant was invalid - On
9.5.2013, Central Commission asked appellant to approach State
Commission for adjudication of dispute regarding subsistence or
otherwise of the PPA after the termination notice dated 11.05.2012
- O.P. by respondent was allowed by State Commission by order
dated 17.3.2017, on the ground that notice dated 5.5.2011 was not
a default notice and therefore subsequent notice of termination based
upon 5.5.2011 notice could not be said to be valid in law - Appellate
Tribunal dismissed appeals of appellant filed against order dated
9.5.2013 and 17.3.2017 - In the instant appeals, plea of appellant
inter alia was that finding based on letter dated 5.5.2011 by Appellate
Tribunal was not on a matter directly and substantially in issue but
being merely collateral could not be said to be res judicata - Held:
 [2018] 1 S.C.R. 1023
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[2018] 1 S.C.R.
There is no doubt whatsoever that the appellant itself invited the
Appellate Tribunal to go into a subsequent event, which, according
to it, was of extreme importance in deciding the appeal - This being
the case, after contest, and after the Appellate Tribunal held in
favour of the appellant that such subsequent event was indeed
important and will be decided by the Tribunal, and then suffering a
finding which was found, on merits, to be against it, the appellant
was clearly estopped from attempting to argue now that the very
important issue raised by way of subsequent events according to
the appellant itself should be held, as a matter of law, to be only a
collateral issue and therefore, not res judicata - A reading of PPA
showed that upon occurrence of an event of default, a default notice
may be served to the Corporation in writing specifying in reasonable
detail the event of default giving rise to the notice, and calling upon
Respondent No.1 to remedy the same within a period of 30 days
from the delivery of the default notice unless the parties have agreed
otherwise - It is only then that the Company may deliver a
termination notice to the Corporation - Letter dated 05.05.2011
spoke only of events of default, but did not call upon Respondent
No.1 to remedy the same within the period specified - Thus there
was no substantial compliance of Clause 9.3.2 of the PPA - Appellate
Tribunal in the impugned judgment cannot be faulted on any score.
Dismissing the appeals, the Court
HELD: 1. Once a Court or Tribunal decides to look into a
subsequent event at the behest of any of the parties, the Court
itself thinks that it is important to do so, otherwise it would not
look into such subsequent event. As seen from the Appellate
Tribunal's judgment, not only did the appellant considered the
subsequent event as directly and substantially in issue for deciding
the appeal, which incidentally was n

## Text

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RITHWIK ENERGY GENERATION PVT. LTD.
v.
BANGALORE ELECTRICITY SUPPLY CO. LTD. & ORS. ETC.
(Civil Appeal Nos. 5084-5085 of 2015)
FEBRUARY 06 2018
[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Electricity: Supply under Open Access System - PPA between
appellant and respondent no.1 - State Commission did not accord
approval to the PPA and returned the same - Appellant filed O.P.
before State Commission seeking declaration that no valid PPA
subsisted between them - State Commission dismissed the O.P. -
Appeal before Appellate Tribunal - During pendency of appeal,
appellant sent Letter dated 5.5.2011 to respondent no.1 mentioning
the defaults in making payment for power bill and interest and
default in opening letter of credit and seeking permission to sell the
power to third party - Meanwhile appellant sought to bring
subsequent events on record for decision of appeal - Appellate
Tribunal examined the subsequent events on merits and ultimately
dismissed the appeal holding that no notice to remedy the default
or termination notice was served by appellant on the respondent
no.1 - On 11.5.2012, appellant sent notice of termination -
Respondent no.1 made certain payments and also opened letter of
credit and thereafter filed O.P. before State Commission seeking
declaration that termination of PPA by appellant was invalid - On
9.5.2013, Central Commission asked appellant to approach State
Commission for adjudication of dispute regarding subsistence or
otherwise of the PPA after the termination notice dated 11.05.2012
- O.P. by respondent was allowed by State Commission by order
dated 17.3.2017, on the ground that notice dated 5.5.2011 was not
a default notice and therefore subsequent notice of termination based
upon 5.5.2011 notice could not be said to be valid in law - Appellate
Tribunal dismissed appeals of appellant filed against order dated
9.5.2013 and 17.3.2017 - In the instant appeals, plea of appellant
inter alia was that finding based on letter dated 5.5.2011 by Appellate
Tribunal was not on a matter directly and substantially in issue but
being merely collateral could not be said to be res judicata - Held:
 [2018] 1 S.C.R. 1023
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SUPREME COURT REPORTS
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There is no doubt whatsoever that the appellant itself invited the
Appellate Tribunal to go into a subsequent event, which, according
to it, was of extreme importance in deciding the appeal - This being
the case, after contest, and after the Appellate Tribunal held in
favour of the appellant that such subsequent event was indeed
important and will be decided by the Tribunal, and then suffering a
finding which was found, on merits, to be against it, the appellant
was clearly estopped from attempting to argue now that the very
important issue raised by way of subsequent events according to
the appellant itself should be held, as a matter of law, to be only a
collateral issue and therefore, not res judicata - A reading of PPA
showed that upon occurrence of an event of default, a default notice
may be served to the Corporation in writing specifying in reasonable
detail the event of default giving rise to the notice, and calling upon
Respondent No.1 to remedy the same within a period of 30 days
from the delivery of the default notice unless the parties have agreed
otherwise - It is only then that the Company may deliver a
termination notice to the Corporation - Letter dated 05.05.2011
spoke only of events of default, but did not call upon Respondent
No.1 to remedy the same within the period specified - Thus there
was no substantial compliance of Clause 9.3.2 of the PPA - Appellate
Tribunal in the impugned judgment cannot be faulted on any score.
Dismissing the appeals, the Court
HELD: 1. Once a Court or Tribunal decides to look into a
subsequent event at the behest of any of the parties, the Court
itself thinks that it is important to do so, otherwise it would not
look into such subsequent event. As seen from the Appellate
Tribunal's judgment, not only did the appellant considered the
subsequent event as directly and substantially in issue for deciding
the appeal, which incidentally was not opposed by Respondent
No.1 on this ground but on the ground that it would be bringing
in a new issue at the stage of appeal, but the Appellate Tribunal
having turned down the Respondent No.1's plea, and having
examined subsequent events, it cannot but be said that the
Appellate Tribunal itself considered the issue No.3 raised by it,
based on subsequent events brought to its notice, as being
directly and immediately in issue. On this ground also, therefore,
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apart from the appellant being estopped in law from raising such
a plea, the plea itself has no legs to stand down. [Paras 13, 15]
[1000-F-H; 1031-G-H; 1032-A-C]
2. A reading of clause 9.3.2 of the PPA would show that
upon occurrence of an event of default, a default notice may be
served to the Corporation in writing. The requirements of the
said notice are two fold - (1) to specify in reasonable detail the
event of default giving rise to the notice, and (2) calling upon
Respondent No.1 to remedy the same within a period of 30 days
from the delivery of the default notice unless the parties have
agreed otherwise. It is only then that the Company may deliver
a termination notice to the Corporation. Letter dated 05.05.2011
spoke only of events of default, but did not call upon Respondent
No.1 to remedy the same within the period specified. This,
according to the appellant was in any event substantial compliance
with the said clause. Both parts of Clause 9.3.2 are important -
one specifying in reasonable detail the event of default and the
second, calling upon Respondent No.1 to remedy the same within
a period of 30 days. The parties may otherwise agree, in which
case the Respondent No.1 may remedy the defaults mentioned
in the notice either before or after the expiry of 30 days period
laid down, showing that the parties considered that this part of
Clause 9.3.2 is as important as the first part, for otherwise, a
termination notice could, de hors the second part of Clause 9.3.2
have issued straight away without more. This being the case,
submission that there has been substantial compliance of Clause
9.3.2 of the PPA is not tenable. [Paras 16, 17, 21] [1032-C-D;
1033-B-C]
Pasupuleti Venkateswarlu v. The Motor & General
Traders [1975] 3 SCR 958 ; Sajjadanashin Sayed Md.
B.E. EDR (D) by LRs. v. Musa Dadabhai Ummer and
Others (2000) 3 SCC 350 : [2000] 1 SCR 1095 - relied
on.
Nani Gopal Biswas v. the Municipality of Howrah
[1958] SCR 774 ; Thakur Pratap Singh v. Shri Krishna
Gupta and Others [1955] 2 SCR 1029 - Distinguished.
RITHWIK ENERGY GENERATION PVT. LTD. v. BANGALORE
ELECTRICITY SUPPLY CO. LTD. & ORS. ETC.
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Case Law Reference
[1975] 3 SCR 958
relied on
 Para 13
[2000] 1 SCR 1095
relied on
 Para 14
[1958 SCR 774
Distinguished Para 19
[1955] 2 SCR 1029
Distinguished Para 20
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 50845085 of 2015.
From the Judgment and Order dated 11.03.2015 of the Appellate
Tribunal for Electricity, New Delhi in Appeal No. 170 of 2013.
Dhruv Mehta, Sr. Adv, Mishra Saurabh, V. V. S. Murthy, Ankit
Kr. Lal, Ms. Vanshaja Shukla, Anant Gautam, Anubhav Ray, Mantha
Shrinivas, Advs for the Appellant.
Ms. Pratiksha Mishra, Balaji Srinivasan, Abhishek Bharti,
Ms. Vaishnavi Subrahmanyam, Nikhil Nayyar, N. Sai Vinod, Ms. Smriti
Shah, Divyanshu Rai, Tushar Bakshi, Advs for the Respondents.
The Judgment of the Court was delivered by
R. F. NARIMAN, J. 1. The present appeals are filed by the
appellant - a Generating Company, which entered into an Agreement
dated 26.09.2006, with the Government of Karnataka for setting up a
24.75 MW mini hydro-electric power plant in a certain District in
Karnataka. On 03.05.2007, the appellant and Respondent No.1 signed
a Power Purchase Agreement (for short 'the PPA'). Pursuant to the
Clauses of the PPA, Respondent No.1 sent the PPA to the State
Commission for its approval. On 06.06.2007, the State Commission did
not accord its approval to the PPA and returned the same on the ground
that Respondent No.1's quota of 10% under the Karnataka Regulations
of 2004 had already been exhausted from other sources.
2. Meanwhile, on 26.07.2008, the appellant entered into another
PPA with PTC India Limited for sale of electricity and sought the
Commission's approval for supply to PTC under the Open Access
provisions of the Electricity Act. On 31.08.2009, the appellant filed O.P.
No. 29 of 2009 before the State Commission seeking a declaration that
no valid PPA subsisted between the appellant and Respondent No.1, as
a result of which it was open to the appellant to enter into another PPA
and supply electricity under the Open Access system.
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3. On 23.12.2010, the State Commission dismissed the appellant's
O.P. holding that the return of the PPA did not tantamount to rejection,
and this non-grant of approval, therefore, did not invalidate the PPA
between the parties. An Appeal was preferred before the Appellate
Tribunal, during the pendency of which a letter dated 05.05.2011 was
sent by the appellant to Respondent No.1. As a great deal turns upon
the effect of this letter, the relevant paragraphs are set out herein below:-
The letter begins with "WITHOUT PREJUDICE" and has as its
Subject - "Permission to sell Power to Third Parties". The letter then
goes on to state that on the assumption that the PPA is valid, which is
pending appeal before the Appellate Tribunal, the appellant wishes to
bring to the attention of Respondent No.1 three specific defaults in the
obligations undertaken by Respondent No.1 under the PPA. The defaults
related to default in making payments for the Power Bills within 15 days
of submission; default in payment of interest; and default in opening a
Letter of Credit. The letter further goes on to state:
"Thus, BESCOM defaulted in its financial and material obligations,
that too for over a continuous period of three months.
There, BESCOM shall permit, in terms of Article 9.2.2. of t h e
disputed PPA, our Company to sell power from the Project to third parties
and for entering into Wheeling and Banking Agreement with it.
So we request you to confirm that you will permit us to sell the
power to third to pay the applicable charges."
4. On 21.10.2011, the Appellate Tribunal dismissed the appeal
filed by the appellant. On the two issues that were raised before the
State Commission, the Appellate Tribunal found in favour of Respondent
No.1 and was in complete agreement with the findings of the State
Commission. However, the Appellate Tribunal then went on to advert to
an affidavit that was filed before the Appellate Tribunal seeking to bring
on record certain subsequent events as being material for decision of
the appeal. And these subsequent events were sought to be brought on
record by the appellant itself. After a contest on whether these events
ought to be brought on record, Respondent No.1 stating that this is a
new case not permissible in appeal, the Appellate Tribunal turned down
the plea of Respondent No.1 and felt that it was important to examine
the subsequent events on merits. It then referred to certain provisions
of the PPA and, in particular, Clause 9.3.2 which deals with termination
for default of Respondent No.1, and then went on to hold as follows:
RITHWIK ENERGY GENERATION PVT. LTD. v. BANGALORE
ELECTRICITY SUPPLY CO. LTD. & ORS. [R.F. NARIMAN, J.]
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"12.12.
Thus, for termination of the PPA, in the event of payment
default for a continuous period of three months, the appellant has
to deliver a Default Notice to the second respondent in writing
calling upon it to remedy the same. After expiry of 30 days from
delivery of notice unless the parties have agreed otherwise or the
event of default has been remedied, the appellant can deliver a
Termination Notice to the second respondent under intimation to
the State Commission. Upon delivery of the Termination Notice,
the PPA shall stand terminated.
Xxx xxx xxx
12.13
Admittedly, no notice to remedy the default or termination
notice has been served by the appellant on the respondent
distribution licensee, only a letter dated 5.5.2011 about payment
default and seeking permission to third parties in terms of Article
9.2.2. was sent to the respondent distribution licensee on 19.5.2011
after the interim order of the Tribunal dated 18.5.2011"
5. On 11.05.2012, since according to the appellant, Respondent
No.1 did not remedy the default in payment of interest despite the expiry
of 30 days period from the date of the notice dated 05.05.2011 and also
from the expiry of a further period of 30 days granted by the Appellate
Tribunal, the appellant purported to terminate the PPA. The letter of
11.05.2012 specifically referred to and relied upon the notice dated
05.05.2011 and referred to it in para 9 thereof as a default notice that
was issued subsequent to which, defaults as mentioned therein, were
not cured and that therefore, exercising their rights under Clause 9.3.2
of the PPA, a termination notice was then issued. It needs only to be
mentioned that on 29.05.2012, in reply to the "without prejudice" part of
the 11.05.2012 notice to pay interest, in any case, within 30 days from
the said notice, Respondent No.1 paid a sum of Rs. 3.22 lakhs as interest.
On 14.08.2012, it also substituted the earlier Letter of Credit that was
opened and opened a Letter of Credit for an amount that was in
accordance with the PPA, as was contended by the appellant.
6. Thereafter, on 21.02.2013, Respondent No.1 filed O.P. No. 6
of 2013 before the State Commission for a declaration that the termination
of the PPA by the appellant was invalid.
7. By an order dated 09.05.2013, the Central Commission first
asked the petitioner i.e. the appellant herein to approach the State
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Commission for adjudication of the dispute regarding subsistence or
otherwise of the PPA after the termination notice dated 11.05.2012.
8. On 17.10.2013, Respondent No.1's O.P. No. 6 of 2013 was
allowed by the State Commission, relying strongly on the observations
of the Appellate Tribunal in its judgment dated 21.10.2011, which have
been extracted above, to say that the notice dated 05.05.2011 was not a
default notice or could not be said to be a default notice under Clause
9.3.2 of the PPA and that this being so, it is clear that the subsequent
notice of termination based upon the 05.05.2011 notice being a default
notice could not be said to be valid in law. It thus allowed the O.P. filed
by Respondent No.1 and held the termination of the PPA to be invalid.
9. In appeals filed against both the 09.05.2013 order and the
17.10.2013 order, the Appellate Tribunal dismissed the appeals of the
appellant, again relying upon the Appellate Tribunal's judgment dated
21.10.2011 in stating that the alleged notice dated 05.05.2011, not being
in conformity with Clause 9.3.2 of the PPA, could not be said to be a
default notice and that, therefore, any termination notice issued thereafter
is also invalid. It also ultimately found, as a matter of fact, that so far as
the Letter of Credit was concerned, since the appellant had not gone to
the State Commission to remedy the same, it did not find any fault with
the State Commission's orders and ultimately after summarizing its
findings, dismissed both the appeals.
10. Mr. Dhruv Mehta, learned Senior Advocate, appearing on
behalf of the appellant has raised three points before us. According to
him, the finding based on the letter of 05.05.2011 by the Appellate Tribunal
in its judgment dated 21.10.2011 was not on a matter directly and
substantially in issue, but being merely collateral, could not be said to be
res judicata. He next argued that, in any case, the notice dated
05.05.2011 was a notice, which substantially conformed to Clause 9.3.2
of the PPA, and, therefore, ought to have been held as a default notice.
This being so, the termination notice dated 11.05.2012 was valid in law
and, therefore, the judgments of the State Commission as well the
Appellate Tribunal are incorrect on this score. He cited certain judgments,
which will be dealt with by us. He also argued that despite the relevant
period under the PPA having long elapsed, defaults continued and were
remedied long after the period so stated.
11. Ms. Pratiksha Mishra, learned counsel appearing for the
respondent(s), on the other hand, first argued that Mr. Mehta's client
RITHWIK ENERGY GENERATION PVT. LTD. v. BANGALORE
ELECTRICITY SUPPLY CO. LTD. & ORS. [R.F. NARIMAN, J.]
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ought to be estopped from taking the plea that there was no res judicata
in the instant case, and it is the appellant itself that filed an affidavit
before the Appellate Tribunal and called for a finding on subsequent
events which, according to the appellant, was important for determination
of the issue at hand. She also adverted to the relevant portions of the
judgment of the Appellate Tribunal dated 21.10.2011, and stated that, in
any case, it was correct in law. So far as the opening of the Letter of
Credit was concerned, it was her case that a Letter of Credit was opened
and there was, therefore, no default. Only the amount for which it was
opened being lower than what the PPA required, when such default was
pointed out, rectification followed and the Letter of Credit as it stands
after 14.08.2012 is opened in accordance with the PPA.
12. Having heard the learned counsel appearing for the parties,
we are of the view that there is no doubt whatsoever that the appellant
itself invited the Appellate Tribunal to go into a subsequent event, which,
according to it, was of extreme importance in deciding the appeal. This
being the case, it is clear that, after contest, and after the Appellate
Tribunal held in favour of the appellant that such subsequent event is
indeed important and will be decided by the Tribunal, and then suffering
a finding which was found, on merits, to be against it, we are of the view
that the appellant is clearly estopped from attempting to argue now that
the very important issue raised by way of subsequent events according
to the appellant itself should be held, as a matter of law, to be only a
collateral issue and therefore, not res judicata.
13. In Pasupuleti Venkateswarlu vs. The Motor & General
Traders, [1975] 3 S.C.R. 958, this Court adverted to the cautious taking
into account of events that arise subsequent to the filing of a petition.
Krishna Iyer, J., in the aforesaid decision, stated:
"We feel the submissions devoid of substance. First about the
jurisdiction and propriety vis a vis circumstances which come into
being subsequent to the commencement of the proceedings. It is
basic to our processual jurisprudence that the right to relief must
be judged to exist as on the date a suitor institutes the legal
proceeding. Equally clear is the principle that procedure is the
handmaid and not the mistress of the judicial process. If a fact,
arising after the lis has come to court and has a fundamental
impact on the right to relief or the manner of moulding it, is brought
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diligently to the notice of the tribunal, it cannot blink at it or be
blind to events which stultify or render inept the decretal remedy.
Equity justifies bending the rules of procedure, where no specific
provision or fairplay is violated, with a view to promote substantial
justice-subject, of course, to the absence of other disentitling
factors or just circumstances. Nor can we contemplate any
limitation on this power to take note of updated facts to confine it
to the trial Court. If the litigation pends, the power exists, absent
other special circumstances repelling resort to that course in law
or justice. Rulings on this point are legion, even as situations for
applications of this equitable rule are myraid. We affirm the
proposition that for making the right or remedy claimed by the
party just and meaningful as also legally and factually in accord
with the current realities, the court can, and in many cases must,
take cautious cognizance of events and developments subsequent
to the institution of the proceedings provided the rules of fairness
to both sides are scrupulously obeyed."
It is clear therefore, that once a Court or Tribunal decides to look
into a subsequent event at the behest of any of the parties, the Court
itself thinks that it is important to do so, otherwise it would not look into
such subsequent event.
14. In Sajjadanashin Sayed Md. B.E. EDR. (D) by LRs. vs.
Musa Dadabhai Ummer and Others, (2000) 3 SCC 350, one of the
issues that arose for consideration was what exactly is an issue which is
directly and substantially in issue, as opposed to being collaterally and
incidentally in issue. After referring to various authorities, both English
and American, this Court ultimately referred to and relied upon Mulla's
Civil Procedure Code (15th Edition) in which two tests were set out.
One test is that if the issue was "necessary" to be decided for adjudicating
on the principal issue, and was decided, it would be treated as directly
and substantially in issue as the judgment was, in fact, based upon such
a decision. The other principle is that the issue must be decided on the
facts of each case, the material test to be applied being whether the
Court considers the adjudication of the said issue material and essential
for its decision.
15. As seen from the Appellate Tribunal's judgment dated
21.10.2011, not only did the appellant considered the subsequent event
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ELECTRICITY SUPPLY CO. LTD. & ORS. [R.F. NARIMAN, J.]
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as directly and substantially in issue for deciding the appeal, which
incidentally was not opposed by Respondent No.1 on this ground but on
the ground that it would be bringing in a new issue at the stage of appeal,
but the Appellate Tribunal having turned down the Respondent No.1's
plea, and having examined subsequent events, it cannot but be said that
the Appellate Tribunal itself considered the issue No.3 raised by it, based
on subsequent events brought to its notice, as being directly and
immediately in issue. On this ground also, therefore, we are of the view
that, apart from the appellant being estopped in law from raising such a
plea, the plea itself has no legs to stand down.
16. We now come to the other main plank of Mr. Mehta's
submission. Mr. Mehta read to us Clause 9.3.2 of the PPA and contended
that the letter dated 05.05.2011 substantially complied with the
requirements of the said clause and should be treated to be a notice of
default under the said clause. To appreciate this plea, Clause 9.3.2 of
the PPA needs to be set out:
"9.3.2 Termination for corporation's Default: Upon the
occurrence of an event of default as set out in sub-clause 9.2.2
above, Company may deliver a Default Notice to the Corporation
in writing which shall specify in reasonable detail the Event of
Default giving rise to the default notice, and calling upon the
BESCOM to remedy the same.
At the expiry of 30 (thirty) days from the delivery of this default
notice and unless the Parties have agreed otherwise or the Event
of Default giving rise to the Default Notice has been remedied,
Company may deliver a Termination Notice to Corporation.
Company may terminate this Agreement by delivering such a
Termination Notice to Corporation and intimate the same to the
Commission. Upon delivery of the Termination Notice this
Agreement shall stand terminated.
Where a Default Notice has been issued with respect to an Event
of Default which requires the co-operative of both BESCOM
and the Company to remedy, BESCOM shall render all reasonable
cooperation to enable the Event of Default to be remedied."
A reading of this clause would show that upon occurrence of an
event of default, a default notice may be served to the Corporation in
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writing. The requirements of the aforesaid notice are two fold - (1) to
specify in reasonable detail the event of default giving rise to the notice,
and (2) calling upon Respondent No.1 to remedy the same within a
period of 30 days from the delivery of the default notice unless the parties
have agreed otherwise. It is only then that the Company may deliver a
termination notice to the Corporation.
17. On a perusal of the letter dated 05.05.2011, what is clear is
that the letter speaks only of events of default, but does not call upon
Respondent No.1 to remedy the same within the period specified. This,
according to Mr. Mehta, is in any event substantial compliance with the
aforesaid clause. We cannot agree. Both parts of Clause 9.3.2 are
important - one specifying in reasonable detail the event of default and
the second, calling upon Respondent No.1 to remedy the same within a
period of 30 days. It is also important to note that the parties may
otherwise agree, in which case the Respondent No.1 may remedy the
defaults mentioned in the notice either before or after the expiry of 30
days period laid down, showing that the parties considered that this part
of Clause 9.3.2 is as important as the first part, for otherwise, a termination
notice could, de hors the second part of Clause 9.3.2 have issued straight
away without more. This being the case, we are unable to agree with
Mr. Mehta's submission that there has been substantial compliance of
Clause 9.3.2 of the PPA.
18. Mr. Mehta cited three judgments before us to persuade us
that the letter dated 05.05.2011 substantially complied with Clause 9.3.2
of the PPA.
19. In Nani Gopal Biswas vs. The Municipality of Howrah,
[1958 S.C.R. 774, this Court was concerned with a notice issued under
Section 299 of the Calcutta Municipal Act, 1923. Since Section 300 of
the Municipal Act was attracted to the facts of the case and not Section
299, this Court held that even though the notice may be headed as being
under Section 299 of the Act, it would make no difference as, in substance,
the effective part of the notice leaves no doubt in the minds of the parties
concerned that the requisition is to remove an encroachment caused by
a compound wall which is a structure which falls within Section 300.
This case is wholly distinguishable inasmuch as all that was required by
Section 300 of the Calcutta Municipal Act was the fact that a compound
wall was an encroachment. This was clearly stated in the notice, and
RITHWIK ENERGY GENERATION PVT. LTD. v. BANGALORE
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the fact that it was stated to be under a wrong provision of law would,
therefore, make no difference to the substance of the notice.
20. Similarly, in Thakur Pratap Singh vs. Shri Krishna Gupta
and Others, [1955] 2 S.C.R. 1029, this Court dealt with the filling up of
a nomination paper in order to stand for the office of President of a
Municipal Committee. Here again, this Court held that the fact that the
word "occupation" in the form was either struck out or left blank would
make no difference since a man's occupation is not one of the
qualifications for the office of President. It was, therefore, held that this
part of the form was only directory, and is part of the description of the
candidate, but does not go to the root of the matter, so long as there is
enough material in the paper to enable him to be identified beyond doubt.
This judgment again is wholly distinguishable on facts in that, as has
been found by us above, the part of Clause 9.3.2 relating to calling upon
Respondent No.1 to remedy defaults within a period of 30 days unless
otherwise agreed is as important as the events of default that have been
stated to have taken place. Substantial compliance, therefore, can be no
answer to such a mandatory requirement.
21. It is unnecessary for us to pronounce on any further aspect,
including the aspect of late payment and late opening of Letter of Credit.
We are of the view that the Appellate Tribunal in the impugned judgment
cannot be faulted on any score.
22. The appeals are, accordingly, dismissed.
Devika Gujral
 Appeals dismissed.