Telangana HC: Self-Induced Frustration Is Breach of Contract , Promisor Must Disclose Inability to Perform

The Telangana High Court upheld a ₹5 crore arbitral award in favor of M/s Elecon EPC Projects Ltd, in a dispute with NCC Power Project Ltd over a coal handling plant contract.

The dispute arose from NCC Power's failure to inform Elecon about the early termination of the contract on October 26, 2013.

This non-disclosure prevented Elecon from fulfilling its obligations, constituting a breach under Section 39 of the Indian Contract Act, 1872.

The bench ruled that self-induced frustration constitutes a breach under Section 39 of the ICA, highlighting the importance of transparent communication in contracts.