The Supreme Court has issued final directions to give effect to its 2011 decree, which held Himachal Pradesh entitled to a 7.19% share of power from the Bhakra-Nangal and Beas Hydro-Electric Projects. Under these directions, the States of Punjab and Haryana will supply the State about 11,973 million units (MU) of energy arrears over 20 lean seasons. The Court ordered a cashless settlement, in which Himachal Pradesh’s ₹420.77 crore capital-cost liability is adjusted against the energy it is owed. It rejected the State of Punjab’s objections to the computation.
A Bench of Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana disposed of the original suit, which Himachal Pradesh filed in 1996 under Article 131 of the Constitution.
Background of the Bhakra-Beas Power Dispute
The Court recorded that the Bhakra-Nangal Project required the submergence of about 27,869 acres of land in the erstwhile State of Bilaspur. The Beas Project submerged over 65,050 acres in Kangra district. Both areas now form part of Himachal Pradesh. However, the power was enjoyed mainly by composite Punjab and, after its reorganisation in 1966, by Punjab, Haryana, Rajasthan and Chandigarh.
By its judgment dated September 27, 2011, the Supreme Court held Himachal Pradesh entitled to 7.19% of the power attributable to composite Punjab. It directed the Union of India to compute the amounts due. The Union’s 2013 affidavit put Himachal’s energy entitlement up to October 2011 at 13,066 MU. Himachal Pradesh accepted this figure, while Punjab and Haryana disputed it. Several rounds of settlement efforts through the Attorney General for India followed over the years.
Submissions of the Parties
The Attorney General for India, appearing for the Union, proposed a cashless framework. Punjab and Haryana would supply the energy arrears during the lean season from October to March. Himachal’s capital-cost liability, reconstructed from data obtained from the Comptroller and Auditor General of India, would be adjusted at ₹3.85 per unit.
Himachal Pradesh and Haryana agreed to the proposal in principle. Punjab raised three objections:
- The 13,066 MU figure ignored the 1.2 lakh units per day already supplied to Himachal.
- The capital-cost liability should be converted at the current O&M rate of 79 paise.
- The arrears should be spread over 30 years instead of 15.
Supreme Court’s Findings on Punjab’s Objections
The Court clarified that the exercise was in the nature of execution proceedings and was not meant to reopen issues settled by the 2011 decree. It was not persuaded by Punjab’s objections, holding that “these contentions are vague and superficial, and amount to an attempt to relitigate issues already settled by this Court in its decree dated 27.09.2011”.
On the 1.2 lakh units per day, the Bench noted that this supply had already been considered and accounted for in the capital-cost liability worked out in the Union’s framework.
On Punjab’s proposal to use the O&M rate, the Court said it was an attempt to inflate Himachal’s liability and reduce the arrears owed to it. It held that this approach is inaccurate and misleading, “since the arrears relate to an earlier period and cannot be computed at a rate that prevails today.”
On the payment period, the Court observed that Punjab’s only ground for 30 years was a figure mentioned in an earlier written submission of the Union. It also noted that Haryana had accepted the 15-year period. Even so, to ease the burden on the defendant States and close the dispute, the Bench extended the period to 20 years.
The Court remarked, “It is particularly unfortunate that a dispute which has remained pending for several decades continues to be prolonged, requiring further judicial time and attention.”
Directions Issued
The Court directed that:
- The energy arrears due to Himachal Pradesh shall be taken at 13,066 MU.
- Himachal’s capital-cost liability shall be assessed at ₹420.77 crore: ₹249.23 crore attributable to Punjab and ₹171.55 crore to Haryana.
- This liability shall be adjusted at ₹3.85 per unit, which accounts for about 1,093 MU.
- The balance of about 11,973 MU shall be supplied at about 598 MU per year over 20 lean seasons. The supply will be split between Punjab and Haryana in the ratio of 58:42 for the Bhakra-Nangal Project and 60:40 for the Beas Projects.
- Himachal Pradesh shall pay the charges fixed by the Bhakra Beas Management Board for the year in which each tranche of energy is received.
The Bench recorded its appreciation for the efforts of the Attorney General for India in facilitating mediation and formulating the framework. It cautioned all stakeholders that its directions are binding and must be acted upon without reservation, stating: “The expectation of decree, having remained pending for several decades, cannot be rendered fruitless by reason of the unwillingness or recalcitrance of a Judgment Debtor.”
The suit was disposed of accordingly.
Case Title: State of Himachal Pradesh v. Union of India and others
Case No.: Original Suit No. 2 of 1996
Bench: Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana
Date: 06.11.2026
