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 Bank Guarantee furnished by Solar Energy Developer invoking by SECI now restrained: Delhi HC

Judgement:-

The Delhi High Court restrained the Solar Energy Corporation of India (SECI) from invoking bank guarantees furnished by Solar Energy Developer.

Facts of the case:-

The dispute between Petitioner, Solar Energy Developer and SECI was regarding the delay in commissioning of solar power project caused due to imposition of safeguard-duty on the petitioner, the latter has proceeded to encash bank guarantee without supplying the decision copy of  Dispute Resolution Committee (DRC) to the petitioner.

Interpretation of law:-

Mr Sujit Ghosh, the Counsel for the Petitioner contended that the decision process of DRC, which is set up under MNRE mandate for Procedural Guidelines for Dispute Resolution Mechanism (DRM) being a quasi-judicial body needs to be transparent. Mr Ghosh further urged that the Ministry has violated the principles of natural justice by failing to share DRC’s decision copy.

It was further contended that the DRC’s decision basis which the Bank Guarantee is being sought to be encashed has not been shared with Petitioner, thus the entire decision-making process per se will be subject to writ jurisdiction. The petitioner prayed before the court that till the final disposal of the appeal against the decision of DRC, SECI should be restrained from taking any coercive action.

Conclusion:-

The single-judge bench of Justice Navin Chawla from reading of Ministry’s Circular dated June 18, 2019, which established the DRM and Clause 12 of Circular dated September 20, 2019 (clarifying the procedural guidelines for DRM), held that SECI is restrained from taking any coercive action against Solar Energy. The court stayed the encashment of Bank Guarantee by SECI on account of the failure of Ministry of New and Renewable Energy (MNRE) to supply decision copy of Dispute Resolution Committee (DRC) to Solar Energy Developer.

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