The Punjab government is close to accepting a central government proposal to resolve a decades-old dispute over unpaid electricity dues owed to Himachal Pradesh from Bhakra Beas Management Board projects, the Centre informed the Supreme Court on Wednesday.
Attorney General R. Venkataramani, representing the central government, told a Supreme Court bench led by Chief Justice Surya Kant that the involved states are approaching a consensus on the matter. The bench, which also includes Justices Joymalya Bagchi and V. Mohana, scheduled the next hearing for August 20 to review the final outcome of the talks.
Terms Of The Cashless Settlement Proposal
Under the framework proposed by the central government, the unpaid power arrears will be settled through a cashless mechanism based on energy allocation rather than monetary payments. The plan addresses over 12,000 million units out of a total 13,066 million units of electricity arrears owed to Himachal Pradesh by Punjab and Haryana.
Additionally, Himachal Pradesh will be exempted from paying approximately Rs 420 crore in capital costs to Punjab and Haryana. That amount will instead be adjusted directly against the 13,066 million units of accumulated power dues. The central government previously explained that a non-monetary settlement was necessary because strict adherence to the provisions of the Punjab Reorganisation Act of 1966 had prevented a resolution.
Previous Objections And Court Directions
During a July 30 hearing, the Supreme Court noted that Himachal Pradesh and Haryana had agreed to the Centre’s proposal in principle, but Punjab raised objections. Senior Advocate Nidesh Gupta, representing Punjab, had argued that the proposed rate of Rs 2.50 per unit of electricity was excessively high and would result in a loss of around Rs 2,000 crore for the state.
The court reprimanded the Punjab government for delaying the settlement, remarking on its history of non-compliance with judicial decrees. The bench warned that if Punjab failed to agree to an amicable solution, the court would proceed to adjudicate the dispute on its merits.
At Wednesday’s proceedings, Senior Advocate Kapil Sibal, representing Himachal Pradesh, noted that the bench had scheduled the session specifically to evaluate Punjab’s position on the Centre’s terms. Venkataramani assured the court that remaining differences were being actively resolved.
Decades Of Litigation Over Power Shares
The dispute stems from the division of assets following the passage of the Punjab Reorganisation Act of 1966. Himachal Pradesh approached the Supreme Court in 1996 through an original suit, claiming a 7.19 percent share in Bhakra Beas Management Board projects as a successor state.
On September 27, 2011, the Supreme Court issued a decree fixing Himachal Pradesh’s share at 7.19 percent, while assigning 51.80 percent to Punjab, 37.51 percent to Haryana, and 3.50 percent to the Union Territory of Chandigarh. The decree granted Himachal Pradesh entitlement to its share in the Bhakra project retroactive to November 1, 1966, the Dehar project from November 1977, and the Pong Dam project from January 1978.
While the board has been delivering Himachal Pradesh’s 7.19 percent power share since November 1, 2011, Punjab and Haryana have not cleared the accumulated 13,066 million units of electricity dues for the period prior to that date. On July 13, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu stated that the state had been deprived of its recognized share and financial benefits for more than a decade, adding that legal and administrative measures were underway to recover around Rs 4,200 crore in pending dues.
