NTPC said in a statement, "Thiess Minecs failed to make any headway despite the fact that development period of the contract was extended twice."
Leighton said that the NTPC has already called A$18.5m ($17.3m) bank guarantees issued by Thiess Minecs.
"Thiess will initiate legal proceedings to recover the monies called and in respect of the notice of termination issued by NTPC," it added.
In 2010, Thiess Minecs was appointed to develop and operate the Pakri-Barwadih site.
In a separate statement, Leighton said Thiess Minecs CEO Raman Srikanth was arrested after a complaint by Hyderabad-based Roshni Developers over ongoing civil arbitration proceedings in Singapore.
