JUDGMENT

1. Heard Mr. K.V. Viswanathan, learned senior Counsel for the Appellant and Mr. G. Umapathy for Respondent No. 1. Appellant is a State Electricity Board. Respondent No. 1 had entered into a Power Purchase Agreement (PPA) with the Karnataka Power Transmission Corporation Ltd. (KPTCL) for supply of power by an agreement dated 04.04.2002. Paragraphs 5.1 and 5.2 of the said Agreement are relevant for our purpose, which are as under:

"5.1 Monthly Energy Charges: Corporation shall for the Delivered Energy pay, for the first 10 years from the date of signing of Agreement to the Company every month during the period commencing from the Commercial Operation Date on the basis of the base price applicable for the year 1994-95 at the rate of Rs. 2.25 (Rupees Two and twenty five paise) per kilowatt hour (the tariff) for energy delivered to the Corporation at the Meeting Point with an escalation to the Corporation at the Metering Point with an escalation at a rate of 5% per annum over the tariff applicable for the previous year as per guidelines issued by the Ministry of Non-Conventional Energy Sources of the Gol.

5.2 From the 11th year onwards, from the date of signing of Agreement, Corpo