If in a power purchase agreement (PPA), even if it is stated that the discom can terminate the contract on the sole ground that the genco has been admitted under the insolvency process by the National Company Law Tribunal (NCLT), the discom cannot exercise that power of termination of PPA. Though no specific powers have been given to NCLT under the Insolvency and Bankruptcy Code (IBC), 2016, but now the supreme court has said that NCLT can use its wider power called “residuary jurisdiction” under section 60(5)(c) of IBC and set aside termination of PPA to keep the genco as a “going concern”.
