The Supreme Court has directed Punjab and Haryana to clear Himachal Pradesh’s outstanding electricity entitlement from the Bhakra-Nangal and Beas hydroelectric projects over a period of 20 years. The directions also provide for adjustment of Himachal Pradesh’s share of the project capital costs against the electricity arrears, setting out a mechanism to implement the entitlement recognised by the Court in its 2011 judgment.
Background
The dispute originated after the reorganisation of Punjab in 1966. Himachal Pradesh claimed that it was entitled to 7.19% of the power generated from the two projects, considering the proportion of the population transferred to the State during reorganisation.
In 1996, Himachal Pradesh approached the Supreme Court under Article 131 of the Constitution. On September 27, 2011, the Court partly allowed the suit and recognised its entitlement to a 7.19% share of the power attributable to the erstwhile composite Punjab.
However, disagreements continued over the calculation of outstanding electricity, applicable rates and the States' respective financial liabilities.
The Bench observed that the present proceedings were not intended to reopen the issues already decided in 2011. Instead, the Court was required to resolve disputes concerning the implementation of its earlier decree.
The Court observed:
"That being so, having regard to the total quantum of arrears, and with a view to easing the burden on the Defendant States and bringing this long-standing dispute to a close, we are inclined to extend some concession to them. Accordingly, we deem it appropriate to increase the period for the disbursement of the energy arrears from 15 years to 20 years."
The Bench also rejected Punjab's objections regarding the calculation of electricity arrears, observing that the proposed adjustments had already accounted for the relevant electricity supplies and financial liabilities.
It further emphasised that the directions issued by the Court must be implemented without reservation.
"The directions issued by this Court are binding and are required to be acted upon without reservation. 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 Supreme Court fixed the total electricity arrears at 13,066 million units. After adjusting Himachal Pradesh's capital-cost liability of ₹420.77 crore, equivalent to approximately 1,093 million units at ₹3.85 per unit, the remaining electricity entitlement was calculated at approximately 11,973 million units.
Punjab and Haryana must supply this remaining electricity over 20 lean seasons, from October to March, at approximately 598 million units annually. The supply will be shared in the ratio of 58:42 for Bhakra-Nangal and 60:40 for the Beas projects.
Himachal Pradesh must pay the charges determined by the Bhakra Beas Management Board for the year in which each electricity instalment is received.
The Court ordered the cashless settlement and disposed of the suit along with pending applications.
Case Details
Case Title: State of Himachal Pradesh v. Union of India and Others
Case Number: Original Suit No. 2 of 1996
Judges: Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana
Decision Date: November 6, 2026
