Himachal Pradesh’s long-pending demand for payment of dues related to Bhakra Beas Management Board (BBMB) projects since 1966 is set to be fulfilled as the Centre on Thursday told the Supreme Court that an amicable settlement can be reached through a new cashless formula between the partner states.
Event Context
The Supreme Court in 2011 had upheld Himachal Pradesh’s claim to a rightful share of 7.19% of the total power generated from the Bhakra-Nangal and Beas hydro projects. This entitlement was based on the population ratio transfer to Punjab, Haryana, Himachal Pradesh and Chandigarh under the Punjab Reorganisation Act, 1966.
However, Punjab and Haryana have failed to clear the outstanding dues of 13,066 million units owed since 1966 even after nearly 15 years.
Since no consensus was reached among the parties on the rate of electricity to be applied, the Centre has suggested payout to Himachal by Punjab and Haryana through a power-for-power solution.
He said the rate of ₹2.5 per unit of electricity was very high, causing a loss of around ₹2,000 crore to Punjab.
The bench told Gupta if Punjab did not agree to an amicable settlement, the court will examine the issue on merit and pass orders.
Team Analysis
Besides, the hilly state from which the river Beas flows does not have to pay over ₹400 crore towards capital cost to Punjab and Haryana.
A bench of Chief Justice Surya Kant and justices Joymalya Bagchi and V Mohana recorded that Himachal and Haryana governments had in principle agreed to the Centre’s proposal, but the Punjab government had objected.
Pulling up the Punjab government for not agreeing to the proposal, the top court observed that it had the habit of not following the decree of the court.
Asking it to make its stand clear on the proposal, the top court gave the Punjab government two weeks and posted the matter for further hearing on August 12.
During the hearing, senior advocate Nidesh Gupta, appearing for the Punjab government, told the bench that they had a problem with the rate at which arrears were to be paid.
Match Outlook
It was also decided that Himachal will not pay the dues of ₹420 crore to Punjab and Haryana and the amount will be adjusted from 13,066 million units of electricity. Thus, Punjab and Haryana will return over 12,000 million units of electricity instead of a monetary payout.
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“Himachal Pradesh does not have that many sources for revenue generation like Punjab and Haryana. These facts require consideration. Rivers flow from the state and dams are situated there,” it said, telling Punjab that there was a decree of the court and it had to be followed.
Senior advocate Kapil Sibal, advocate general Anup Ratan and additional advocate general Vaibhav Srivastava, appearing for Himachal, said the state was entitled to the arrears on the terms decided by the apex court in 2011.
“For 15 years, they have not paid the arrears from 1966 onwards as decided by this court. They (Punjab) got a loan from the Centre but did not pay it back. For 15 years, nothing has happened. We were all part of Punjab once,” Sibal submitted.
Senior advocate Balbir Singh, appearing for the Haryana government, said they agreed in principle to the proposal but they wanted to be part of the negotiations between the parties.
After failing to settle an inter-state dispute about allocation of assets for decades following the Punjab Reorganisation Act, 1966, Himachal had moved the apex court in 1996 through an original suit, pleading that as a successor state, it was entitled to 7.19% share in the BBMB projects.
After the central government failed to settle the dispute between the states out of court, the top court on September 27, 2011, passed a decree.
According to the 2011 decision of the apex court, the share of Himachal was fixed at 7.19%, and that of Punjab and Haryana at 51.80% and 37.51%, respectively.
Rajasthan’s share (15.22%) largely remained unaffected, while the share of Union Territory of Chandigarh was fixed as 3.50%.
According to the 2011 decision of the court, Himachal was to get a share in the Bhakra project from November 1966, the Dehar project from November 1977 and the Pong Dam project from January 1978.
