- 1 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA WRIT PETITION NO.2694 OF 2025 (GM-KEB) BETWEEN: M/S. MICRO LABS LIMITED, (A PUBLIC LIMITED COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AND CURRENTLY OPERATING UNDER THE COMPANIES ACT, 2013) HAVING ITS REGISTERED OFFICE AT NO.31, RACE COURSE ROAD, BENGALURU-560001, REPRESENTED BY ITS GENERAL MANAGER-LEGAL AND AUTHORISED SIGNATORY, MR. ASHOK KUMAR .G AGED ABOUT 48 YEARS. …PETITIONER (BY SMT. VIMALA PINTO, ADVOCATE) AND: 1. STATE OF KARNATAKA, REPRESENTED BY ITS ADDITIONAL CHIEF SECRETARY, DEPARTMENT OF ENERGY, VIKASA SOUDHA, DR. AMBEKAR VEEDHI, BENGALURU-560001. 2. KARNATAKA POWER TRANSMISSION CORPORATION LIMITED, REPRESENTED BY ITS DEPUTY GENERAL MANAGER (PROJECTS) Digitally signed by MAHALAKSHMI B M Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 HAVING ITS REGISTERED OFFICE AT KAVERI BHAVAN, KEMPEGOWDA ROAD, BENGALURU - 560009. 3. GULBARGA ELECTRICITY SUPPLY COMPANY LIMITED, REPRESENTED BY ITS CHIEF ENGINEER (ELE.), OPERATIONS HAVING ITS REGISTERED OFFICE LOCATED AT STATION MAIN ROAD, KALABURAGI-585101. 4. KARNATAKA RENEWABLE ENERGY DEVELOPMENT LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR HAVING ITS OFFICE AT NO.39, BHARATH SCOUTS & GUIDES BUILDING, OPP. THE CHIEF POST MASTER GENERAL OFFICE, PALACE ROAD, BENGALURU-560001. 5. STATE LOAD DISPATCH CENTRE-KARNATAKA, REPRESENTED BY ITS CHIEF ENGINEER (ELECTRICITY) HAVING ITS OFFICE AT KARNATAKA POWER TRANSMISSION CORPORATION LIMITED A.R. CIRCLE, BENGALURU-560009. …RESPONDENTS (BY SRI RAJ KUMAR M., AGA FOR R-1, SRI SHRIDHAR HEGDE, ADVOCATE FOR R-4, SRI SHAHABAAZ HUSSAIN, ADVOCATE FOR R-2, R-3 & R-5) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO SETTING ASIDE THE IMPUGNED BILL/DEMAND NOTICE BEARING NO.CEE/SLDC/SEE/TBC/EE-1/AEE-2/3599-600, DATED 06.05.2024, FOR SLDC CHARGES, TRANSMISSION CHARGES AND MONTHLY TRANSACTION CHARGES FROM 11.10.2023 TO MARCH 2025 ISSUED BY THE RESPONDENT NO.5 AS CONTAINED IN ANNEXURE-P AND ETC. THIS PETITION COMING ON FOR FURTHER ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 CORAM: HON'BLE MRS. JUSTICE K.S. HEMALEKHA ORAL ORDER The petitioner seeks issuance of writ of certiorari to quash the impugned demand notice dated 06.05.2024 issued by respondent No.5, which levies SLDC charges, transmission charges, and monthly transaction charges for the period 11.10.2023 to March 2025. The petitioner also seeks to set aside the subsequent email dated 03.12.2024, wherein respondent No.5 directed payment of the said charges for 12 months from the date of Wheeling and Banking Agreement (WBA), as a precondition for processing the petitioner’s request for termination. Brief facts: 2. The petitioner, M/s. Micro Labs Limited, a pharmaceutical company, proposed to establish a 10.8 MW captive wind energy in Raichur District, which was later relocated to Chikkahesarur Village, Lingasagur Taluk, after obtaining Government approval. The project was approved - 4 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 under Government order dated 04.01.2022, and the petitioner entered into a Wheeling and Banking Agreement (WBA) with KPTCL and GESCOM on 31.10.2023, effective from 11.10.2023. The project, however, has not yet been commenced, and the commercial operation date has not been declared. 3. It is the contention of the petitioner’s counsel that despite this, the State Load Dispatch Centre- respondent No.5 issued a demand notice dated 06.05.2024, seeking SLDC charges, transmission charges and monthly transaction charges for the period 11.10.2023 to March 2025, followed by an email dated 03.12.2024, insisting upon payment of the aforesaid charges as a pre-condition for processing the termination request of the WBA. 4. Objections are filed by respondent No.2, inter alia, contending that the writ petition is not maintainable under Article 226 of the Constitution of India, as the - 5 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 dispute arises from a contractual Wheeling and Banking Agreement (WBA), governed by the Electricity Act, 2003 (‘the Act’ for short). Under Section 86 (1) (f) of the Act, such disputes lies exclusively before the Karnataka Electricity Regulatory Commission (KERC). The petitioner has an alternative statutory remedy and has not shown any violation of natural justice. It is further stated that the transmission and SLDC charges are payable for reservation of transmission capacity and not based merely on use of transmission, as contented by the petitioner. Once 10.8 MW capacity was reserved for the petitioner from 11.10.2023, it could not be allotted to any other user, and hence charges are justified. It is submitted that under clause 5 of WBA, the petitioner is bound to pay all applicable charges as per Karnataka Electricity Regulatory Commission-Regulations (KERC Regulations) and tariff orders. The petitioner having executed the agreement cannot now dispute its liability. Further, it is stated that the demand is supported by KERC Tariff Order 2025 and - 6 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 Karnataka Electricity Regulatory Commission (Terms and Conditions for Green Energy Open Access) Regulations, 2025, which mandate payment based on contractual capacity and these replaced the earlier 2022 Regulations that were struck down. It is stated that the demand is legal, valid and as per contracts and regulations and the writ petition deserves to be dismissed. 5. This Court has carefully considered the rival contention. Perused the material on record. 6. The respondents have raised a preliminary objection that the dispute pertains to Wheeling and Banking Agreement (WBA) governed by the Act, and therefore the petitioner ought to have approached the KERC under Section 86 (1) (f) of the Act. The impugned demand notice has been issued on the basis of the Karnataka Electricity Regulatory Commission (Terms and Conditions for Green Energy Open Access) Regulations 2022, which has been struck down by this Court in - 7 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 Brindavan Hydropower Private Limited Vs. Union of India and others1 (Brindavan Hydropower). Once the parent regulation itself has been declared invalid, any consequential action or demand founded on such regulation cannot survive. The petitioner cannot be subjected to any liability under 2025 Regulations, since both the project in question and the impugned notice relate to a period when 2022 Regulations were in force, and those provisions have already been held unconstitutional. Therefore, the subsequent reliance on the repealed regulation is misconceived. The petitioner's grievance, therefore, is not purely contractual, but one of jurisdictional illegality, which clearly falls within the jurisdiction under Article 226 of the Constitution of India. Hence, the objection as to the maintainability of the writ petition is unsustainable. 7. The record discloses that the project of the petitioner has not been commenced and the commercial 1 W.P. No.11235/2024 & connected matters D.D. 20.12.2024 - 8 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 operation date has not been declared. The clause No.5.1 of the Wheeling and Banking Agreement dated 31.10.2023 reads as under: “5.1 The Company shall pay all the charges to the Corporation/ESCOMs for using their network as per the applicable KERC Regulations/Orders issued from time to time. Such charges shall include: (i) transmission charges for the use of the transmission network, (ii) wheeling charges for the use of the distribution network/s, (iii) cross subsidy surcharge, (iv) additional surcharge (additional surcharge shall not be applicable, if full fixed charges of the licensee are being recovered through retail supply tariff and such full fixed charges are paid by the Open Access consumers), (v) Banking charges, (vi) stand-by charges wherever applicable, (vi) Losses as determined by the Commission - 9 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 (vii) Monthly transaction charges of Rs.3000 for maintaining the transaction details, (ix) Meter reading charges of Rs.1000 per month, in case AMR meters having remote meter reading facilities are not functional, (x) Load Dispatch Centre fees, (xi) Scheduling and system operation charges, (xii) Parallel operation charges as determined by the Commission from time to time, (xiii) Reactive power charges, (xiv) Deviation settlement charges, (xv) Any other charges as specified under the various KERC Regulations.” (emphasis supplied) 8. This clause clearly indicates that payment obligations arise only from the date of commercial operations or commencement of Wheeling, whichever is applicable. In the absence of any commencement, the levy of SLDC charges, transmission charges and monthly transaction charges is premature and unsustainable. - 10 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 Further, the impugned demand notice dated 06.05.2024 and the email dated 03.12.2024 are both founded on 2022 Regulations, which have been struck down. Consequently, all the impugned actions have no legal sanctity and cannot be sustained. Hence, the impugned demand notice and consequential communication are liable to be set aside, this Court deems it appropriate to clarify that the respondents are at liberty to issue a fresh demand notice, if so advised, strictly in accordance with the law, after according the petitioner due notice and opportunity of hearing. Accordingly, this Court pass the following: ORDER i. The writ petition is allowed. ii. The impugned demand notice dated 06.05.2024 and consequential communication dated 03.12.2024 issued by respondent No.5 are hereby quashed as being arbitrary and without authority of law. - 11 - HC-KAR NC: 2025:KHC:41592 WP No. 2694 of 2025 iii. The respondents, are however, permitted to initiate fresh proceedings, if permissible, in accordance with the KERC Regulations presently in force, after following due process. Sd/- _____________________ JUSTICE K.S. HEMALEKHA MBM List No.: 1 Sl No.: 39