Bhakra-Beas Power Arrears: Supreme Court Orders Punjab, Haryana To Supply Himachal 11,973 Million Units Over 20 Years At BBMB Rates

In brief

The question

Whether the energy arrears due to Himachal Pradesh were 13,066 MU and how those arrears should be valued and apportioned.

The court held

The Court directed that the 13,066 MU arrears be supplied in kind over 20 lean seasons, with the States of Punjab and Haryana bearing the supply in the prescribed project-specific ratios.

It also directed

Himachal Pradesh must pay the applicable BBMB charges for each tranche received.

Its capital-cost liability was fixed at ₹420.77 crores—₹249.23 crores attributable to Punjab and ₹171.55 crores to Haryana—and set off against the arrears at ₹3.85 per unit, equivalent to approximately 1,093 MU.

The resulting balance of approximately 11,973 MU is to be supplied at approximately 598 MU per year over the 20-season period.

The settlement is cashless, and the suit and pending applications were disposed of accordingly.

01Facts

The State of Himachal Pradesh brought this suit under Article 131 of the Constitution seeking a share of the power generated by the Bhakra–Nangal and Beas Projects.

In its 2011 judgment, the Supreme Court declared Himachal Pradesh entitled to specified shares of the power attributable to the erstwhile composite State of Punjab and directed the Union of India to compute the amounts due.

pp. 13, paras 5.20–5.25

The Union subsequently calculated energy arrears of 13,066 million units (MU) through October 2011 and proposed that the arrears be discharged in kind, with Himachal Pradesh’s capital-cost liability set off against part of its entitlement.

pp. 15–16, paras 5.27–5.31

Punjab and Haryana disputed aspects of the computation and the proposed settlement.

The Court treated the outstanding matters as proceedings to implement, rather than reopen, its 2011 decree.

pp. 30, paras 28–30

02Issues

i.Whether the energy arrears due to Himachal Pradesh were 13,066 MU and how those arrears should be valued and apportioned.

p. 29, para 27(i)

ii.Whether Himachal Pradesh was liable for its 7.19% share of the Projects’ capital cost and whether that liability could be set off against the energy arrears.

p. 29, para 27(ii), (iv)

iii.Whether the arrears should be discharged in cash or in kind and, if in kind, on what terms and schedule.

p. 30, para 27(iii)

iv.What further directions were necessary to implement the 2011 decree.

p. 30, para 27(v)

03Law Applied

Article 131 of the Constitution provides the Supreme Court’s original jurisdiction over qualifying disputes between the Union and States.

p. 1, para 1

Section 78(1) of the Punjab Reorganisation Act, 1966, governs the apportionment of the rights and liabilities of the erstwhile State of Punjab relating to the Bhakra–Nangal and Beas Projects among successor States.

p. 6, para 5.9

The 2011 decree, which was not open to reconsideration in these proceedings, established Himachal Pradesh’s entitlement to 7.19% of the power attributable to composite Punjab and directed the Union to compute the amounts due.

pp. 13–14, paras 5.23–5.25

The present proceedings were confined to giving effect to that decree and resolving disputes over its computation and implementation.

pp. 30, paras 28–30

Provisions in the judgment · 5 · Linked ones open on LawLens

Punjab Reorganisation Act, 1966 Section 5 Section 78 Section 79 Section 80

Code of Civil Procedure, 1908 Section 86

04Reasoning

The Court held that the Union’s 13,066 MU computation and proposed capital-cost adjustment formed part of a considered framework developed after examining different methods and rates.

pp. 31–32, paras 31–35

It rejected Punjab’s argument that the separate daily supply of 1.2 lakh units should further reduce the arrears, finding that the framework had already taken that supply and other relevant variables into account.

pp. 32, paras 33–34

It also rejected converting the capital liability at the current O&M rate, reasoning that an amount arising from an earlier period should not be valued at a present-day rate.

p. 33, para 36

Although the Union had proposed a 15-year repayment period, the Court extended the schedule to 20 lean seasons to ease the States’ burden and conclude the dispute.

pp. 33–34, paras 37–38

05Holding

The Court directed that the 13,066 MU arrears be supplied in kind over 20 lean seasons, with the States of Punjab and Haryana bearing the supply in the prescribed project-specific ratios.

pp. 35–37, paras 41, 44–45

Himachal Pradesh must pay the applicable BBMB charges for each tranche received.

pp. 35–37, paras 41, 44–45

The resulting balance of approximately 11,973 MU is to be supplied at approximately 598 MU per year over the 20-season period.

pp. 35–37, paras 41, 44–45

The settlement is cashless, and the suit and pending applications were disposed of accordingly.

pp. 35–37, paras 41, 44–45

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