IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10^TH DAY OF MARCH, 2026 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C.M. POONACHA WRIT APPEAL NO. 1969 OF 2025 (GM-KEB)

BETWEEN:

1. POWER COMPANY OF KARNATAKA LIMITED INDHANA BHAVAN, 4TH FLOOR ANAND RAO CIRCLE BANGALORE - 560 009 (REPRESENTED BY ITS ADDITIONAL DIRECTOR PROJECTS)

…APPELLANT (BY SRI SHASHIKIRAN SHETTY K., ADVOCATE GENERAL/

SENIOR ADVOCATE A/W SMT. SUMANA NAGANAND, ADVOCATE)

AND:

1. M/S HASSAN THERMAL POWER PRIVATE LIMITED Digitally PREVIOUSLY KNOWN AS EURO INDIA POWER signed by CANARA PRIVATE LIMITED AMBIKA H B A COMPANY REGISTERED UNDER SECTION 21 Location:

OF THE COMPANIES ACT, 1956 High Court HAVING ITS ADMINISTRATIVE OFFICE AT S-327 of Karnataka GREAT KAILASH-II, NEW DELHI -110 048 REPRESENTED BY ITS DIRECTOR SMT. NALINI VIJAYKUMAR W/O VIJAY KUMAR AGED ABOUT 68 YEARS

2. STATE OF KARNATAKA DEPARTMENT OF ENERGY VIDHANA SOUDA, BANGALORE - 560 001 REPRESENTED BY ITS ADDITIONAL CHIEF SECRETARY …RESPONDENTS (SRI R.K. NAROOLA, ADVOCATE;

MS. PRATIBHA SHARMA, ADVOCATE;

MS. DEEPA V., ADVOCATE FOR C/R-1 &

SRI K.S. HARISH, GOVERNMENT ADVOCATE FOR R-2)

THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 06.11.2025 PASSED BY THE LEARNED SINGLE JUDGE IN W.P. No.19513/2025 (GM-KEB) AND CONSEQUENTLY DISMISS THE WRIT PETITION.

THIS WRIT APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY, JUDGMENT WAS PRONOUNCED AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA C.A.V. JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

Introduction

1. The appellant, Power Company of Karnataka Limited [PCKL], is a nodal agency for all the electricity distribution companies in the State of Karnataka for the procurement of power. It has filed the present appeal impugning an order dated 06.11.2025 [the impugned order] passed by the learned Single Judge in Writ Petition No.19513/2025 (GM-KEB).

2. Respondent No.1, M/s Hassan Thermal Power Private Limited [HTPPL], is in the business of generating electricity. It had filed the said petition seeking refund of the deposit [EMD] of `1,00,00,000/- (Rupees one crore only) along with interest at the rate of 12% per annum from 12.04.2016 till the date of refund. In addition, HTPPL claims that it is entitled to exemplary costs from PCKL/State for causing hardship and mental harassment by their unjustified acts of withholding the refund of the deposit due to the HTPPL on 12.04.2016 and for unlawfully utilising the same.

3. PCKL had contested the said petition on several grounds, including that HTPPL had an alternate remedy under Section 86(1)(f) of the Electricity Act, 2003 [the Electricity Act] before the Karnataka Electricity Regulatory Commission [KERC]. PCKL contends that HTPPL is not entitled to a refund of the EMD, which was deposited on 28.11.1998. It also contested the writ petition on the ground that HTPPL’s claim is barred by delay and laches.

Impugned Order

4. The learned Single Judge held that the HTPPL's claim involved the State’s constitutional and fiduciary obligation under Articles 14 and 300A of the Constitution of India and therefore, fell within the domain of public law. The learned Single Judge further found that PCKL's retention of the deposit constituted unjust enrichment and deprivation of property, which would contravene Article 300A of the Constitution of India. The learned Single Judge also held that wrongful retention of the EMD constituted a continuing wrong of Section 22 of the Limitation Act, 1963 [the Limitation Act], giving rise to a fresh cause of action each day until it is refunded.

5. PCKL assails the impugned order on several grounds. Before addressing the rival contentions, it is apposite to set out the factual matrix in which the present dispute arises.

Factual Context

6. By an order dated 05.03.1996, the Government of Karnataka [Government] through the then