Delhi High Court Stays SECI’s Debarment Order Against Reliance Power, Bars Coercive Action

Image Source: Law Beat

In a significant legal development, the Delhi High Court has granted interim relief to Reliance Power Ltd and its subsidiaries by staying a debarment order issued by the Solar Energy Corporation of India (SECI). The court has also restrained SECI from taking any coercive action, including termination of power purchase agreements, until the matter is fully adjudicated.

Key Highlights:

SECI had issued a debarment notice on November 6, 2024, barring Reliance Power and its subsidiaries from participating in future tenders for three years, citing submission of a fake bank guarantee by its unit, Reliance NU BESS Ltd (formerly Maharashtra Energy Generation Ltd).
Reliance Power challenged the notice in the Delhi High Court, arguing that it was not issued a show-cause notice nor given a fair hearing, violating principles of natural justice.
The court observed procedural lapses and granted a stay on the debarment order and public notice, except in the case of Reliance NU BESS Ltd.
The company has also filed a police complaint alleging it was a victim of fraud and forgery in the bank guarantee matter.

Strategic Context:

The stay order allows Reliance Power to continue bidding for SECI tenders, preserving its business continuity in the renewable energy sector.
The case underscores the importance of due process in regulatory actions, especially in high-stakes infrastructure contracts.
Shares of Reliance Power rose nearly 5% following the court’s decision, reflecting investor relief.

Outlook: The legal proceedings will continue, but the interim relief provides a crucial breather for Reliance Power as it seeks to defend its reputation and operational rights in India’s competitive clean energy market.

Sources: CNBC-TV18, Business Standard, The New Indian Express, Indian Kanoon.