January 22, 2019:
On Monday, Justice Vibhu Bakhru of Hon'ble Delhi High Court in M/s BGR Mining and Infra Limited versus NTPC Limited and Anr. observed that state actions have to be fair, reasonable and informed by reason.
The petitioner (BGR Mining and Infra Limited) filed a Writ petition before the Hon'ble High Court praying that the respondent (NTPC Limited) be directed to act in compliance with Clause 23 of the Project Agreement entered into between the petitioner and NTPC.
According to NTPC, the show cause notice was issued to the petitioner alleging that the petitioner has indulged in corrupt and fraudulent practice.
NTPC contended that in view of the aforesaid allegation, the event of default as alleged is not of a nature that can be remedied by good faith discussions and, therefore, no purpose will be served by holding any discussion under Clause 23 of the Project Agreement.
High court has observed that all actions of the State, whether administrative or otherwise have to be fair, reasonable and informed by reason. It is not open for any State agency to enter into a contract and not perform the obligations undertaken thereunder.
In view of the above, NTPC is directed by the High Court to hold good faith discussions with the petitioner in terms of Clause 23.1(b) of the Project Agreement. It is, however, clarified that the said discussions shall also be construed as compliance of Clause 24.4 (c) of the Project Agreement.
Read Judgment @ LatestLaws.com
M.s BGR Mining and Infra Ltd vs NTPC Ltd and Anr- DHC-21-01-2019(Downloadable PDF)
M.s BGR Mining and Infra Ltd vs NTPC Ltd and Anr- DHC-21!01!2019 by Anonymous P3qxYB on Scribd
Picture Source :
