The court reinforced that once a power purchase agreement is approved, its terms cannot be altered except under specified conditions, reflecting legislative intent.

1. Heard Mr. K. V. Viswanathan, learned Senior Counsel for the appellant and Mr.G. Umapathy for Respondent 1.

2. The appellant is a State Electricity Board. Respondent 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 4-4-2002. Paras 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 1994-1995 at the rate of Rs 2. 25 (Rupees two and twenty - five paise) per kilo watt 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% p. a. over the tariff applicable for the previous year as per guidelines issued by the Ministry of Non - Conventional Energy Sources of the Government of India.
5. 2. From the 11th year onwards, from the date of signing of agreement, Corporation shall pay to the Company for the energy delivered at the meeting point at a rate agreed by mutual negotiations. In case the parties do not arrive at a mutual agreement on the tariff, the Company shall be permitted to sell power to third parties and enter into a Wheeling and Banking Agreement with Corporation to sell power through the rates applicable from time to time in addition to banking charges at the rates applicable from time to time as approved by the Commission based on the month and balance of the energy hanked. "

3. Subsequently, by a supplemental agreement dated 29-10-2005 entered into between the appellant and Respondent 1, Paras 5.1 and 5. 2 of the agreement dated 4-4-2002 came to be modified. Under Para 5. 1 of the supplemental agreement, the rate of tariff was altered providing for a slightly higher tariff for purchase of power from Respondent 1.

4. In the year 2004, the KERC (Power Procurement from Renewable Sources by Distribution Licensee) Regulations, 2004 (for short "the 2004 Regulations") dated 27-9-2004 came to be notified by the Karnataka Electricity Regulatory Commission, Respondent 2 herein, in the Karnataka Gazette on 21-10-2004. Under Regulation 5. 1, it was stipulated that the Commission should determine the tariff for purchase of electricity from renewable sources by a buyer. The proviso, however, provided that the PPAs approved by the Commission including the PPAs deemed to have been approved under
S.27(2) of the Karnataka Electricity Reforms Act, 1999, prior to the notification of those Regulations shall continue to apply for such period as mentioned in those PPAs.

5. Subsequently, in the year 2011, fresh Regulations viz. the KERC (Power Procurement from Renewable Sources by Distribution Licensee and Renewable Energy Certificate Framework) Regulations, 2011 (for short "the 2011 Regulations") came to be issued and notified. Under Regulation 9 of the 2011 Regulations, it was provided that -
"9. Determination of tariff for electricity from renewable sources of energy.--(1) The Commission may determine at any time the tariff for purchase of electricity from renewable sources of energy by distribution licensees either suo motu or on an application either by generator or by distribution licensee.
The proviso to Regulation 9, however, was identical to the proviso to Regulation 5. 1 of the 2004 Regulations. It is needless to state that the above Regulations came to be framed