Supreme Court ends decades-old Bhakra-Nangal power dispute, Himachal Pradesh to get 12k MUs of electricity

The Supreme Court on Friday brought a multi-decade inter-state electricity dispute to a close, accepting a cashless settlement framework to implement the State of Himachal Pradesh’s entitlement to a 7.19% power share from the Bhakra-Nangal and Beas hydro-electric projects [State of Himachal Pradesh v. Union of India & Ors].

A Bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana approved the arrangement evolved through deliberations led by Attorney General for India R Venkataramani involving the States of Himachal Pradesh, Punjab and Haryana.

Under the framework accepted by the Bench, Himachal Pradesh will receive 11,973 million units (MUs) of electricity over a 20-year period from Punjab and Haryana. The original entitlement was computed at 13,066 MUs by the Central Electricity Authority (CEA).

However, an adjustment of ₹420 crore towards historical capital expenditure and debt servicing incurred by Punjab and Haryana during the original construction of the river valley projects was factored in, scaling down the net return to 11,973 MUs.

During the hearings, the Bench addressed competing arguments on the timeline for discharging the arrears.

While Himachal Pradesh pressed for the transfer to be completed within 10 years, Punjab urged for an extended period of 30 years. AG Venkataramani had recommended a 15-year window.

Balancing the fiscal constraints of Punjab and Haryana against Himachal Pradesh’s long-standing entitlement, the Court settled on a 20-year period.

The order resolves the prolonged deadlock surrounding the execution of the top court’s 2011 decree in State of Himachal Pradesh v. Union of India & Ors. In that verdict, the Supreme Court had upheld Himachal Pradesh’s claim under the Punjab Reorganisation Act, 1966, granting it a 7.19% power share with retrospective effect from November 1, 1966.

However, disputes over monetary valuations and severe financial strain on the participating States had stalled implementation for over a decade.

Senior Advocate Kapil Sibal, along with advocates Vaibhav Srivastava and Sugandha Anand (Advocate-on-Record), appeared on behalf of the State of Himachal Pradesh.

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