The Punjab & Haryana High Court has stayed the operation of the blacklisting order dated June 10, 2026 passed by Haryana Power Generation Corporation Limited against M/s Melco India Private Limited, which had debarred the company from future contracts for three years and demanded Rs. 44.98 crores along with interest at 12% per annum w.e.f. Oct 01, 2009.
The Division Bench comprising Justice Suvir Sehgal and Justice Deepinder Singh Nalwa granted interim stay on operation of the June 10, 2026 order, holding that circulation of an adverse blacklisting order to over 40 state power utilities and PSUs without initiating separate proceedings against an aggrieved third party causes irreparable prejudice and warrants judicial intervention.
The interim protection has been extended to Shree Cement Limited, which was not a party to the original blacklisting proceeding, on the ground that the adverse order was circulated to over 45 corporations and state power entities across the country, including NTPC, BBMB, TANGEDCO, state electricity boards and distribution companies, thereby prejudicially affecting Shree Cement’s independent commercial and contractual standing.
Notice of motion has been issued to all respondents, including HPGCL, the State of Haryana, and other statutory corporations, with counsel accepting notice on the very first date of hearing itself, indicating the urgency and seriousness with which the Court viewed the matter. The writ petition has been tagged to be heard along with the connected CWP No. 24743 of 2026 filed by Melco India Pvt Ltd. itself, to ensure consistency in adjudication and to avoid any conflicting findings on the same impugned order, with the next date of hearing fixed as Oct 13, 2026.
Briefly, the matter arises out of CWP No. 25339 of 2026 filed by Shree Cement Limited before the Punjab and Haryana High Court challenging the blacklisting order dated June 10, 2026 issued by Haryana Power Generation Corporation Limited (HPGCL). The impugned order was originally passed against M/s Melco India Private Limited (MIPL) in connection with the Dry Fly Ash Handling System installed at Unit-6, PTPS, Panipat, pursuant to a Purchase Order dated August 06, 1999.
The genesis of the dispute lies in the original contract awarded to MIPL in 1999 for design, supply, erection, testing and commissioning of the Bottom and Fly Ash Handling System for the 1×210 MW Unit-6, PTPS, Panipat, at a lump-sum contract price of Rs. 14.59 crores. The Dry Fly Ash System work was held up in January 2001 on the recommendation of the Central Electricity Authority (CEA) for modifications. This led to MIPL filing CWP No. 10613 of 2004 before the Punjab and Haryana High Court seeking release of the Performance Bank Guarantee, refund of security deposit, and payment for additional disposal pipeline work, which was disposed of on Sep 24, 2004.
Pursuant to the High Court’s directions, HPGCL appointed Er. S.K. Ailawadhi, Chief Engineer (Retired), as Sole Arbitrator to adjudicate the disputes, leading to the execution of a Tripartite Agreement dated May 22, 2006 amongst HPGCL, MIPL, and Shree Cement Limited (SCL). A consent award was pronounced on June 15, 2006, and the Purchase Order was amended on June 23, 2006.
The controversy emerged because HPGCL alleged that MIPL consistently failed to perform its contractual obligations, with the Dry Fly Ash System never achieving its rated capacity of100% lifting for one continuous month, despite numerous opportunities extended between 2009 and 2024. After issuance of a show cause notice on Nov 02, 2021, several follow-up communications in 2024, and a personal hearing on May 25, 2026 before the Store Purchase Committee (SPC), HPGCL issued the impugned blacklisting order on June 10, 2026 debarring MIPL from future contracts for three years and demanding Rs. 44.98 crores along with interest at 12% per annum w.e.f. Oct 01, 2009.
