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ARTICLE · 22 MARCH 2021

Termination Of Power Purchase Agreements Under IBC

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The Supreme Court (SC) vide judgment dated March 08, 2021 in the matter of Gujarat Urja Vikas Nigam Ltd v. Amit Gupta & Ors

IndiaInsolvency/Bankruptcy/Re-Structuring
Abhirup Dasgupta
Abhirup Dasgupta
Ishaan Duggal
Ishaan Duggal
Bhawana Sharma
Bhawana Sharma
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Our viewpoint

It is a well understood fact that a PPA is sine quo non for not only the functioning but the very existence of a Power Project. This judgment in as much as it ensures the continuity of the PPAs, would bring a sigh of relief to the lenders of the power generators which are undergoing insolvency proceedings as it would help in value maximization. Moreover, provided that the Corporate Debtor is able to fulfil the supply obligations, this decision would ensure that the Corporate Debtor would have a steady source of income and would continue to function as a going concern during the resolution process.

The Supreme Court (SC) vide judgment dated March 08, 2021 in the matter of Gujarat Urja Vikas Nigam Ltd v. Amit Gupta & Ors1, upheld the order passed by the National Company Law Appellate Tribunal (NCLAT) and the National Company Law Tribunal, New Delhi Bench (NCLT) setting aside the termination of the Power Purchase Agreement (PPA) by the Gujarat Urja

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