Bhakra-Beas power dispute ends: Himachal gets 11,973 million units in kind over 20 lean seasons
Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana adopt the Attorney General formula, set off Rs 420.77 crore of capital cost, and stretch the payback from 15 to 20 years.
The Supreme Court on 6 November 2026 closed out a 30-year-old dispute over who gets how much electricity from the Bhakra-Nangal and Beas hydro projects. Punjab and Haryana must supply Himachal Pradesh about 11,973 million units of power, in kind, over 20 lean seasons. No cash changes hands.
The figure comes from the arrears the Union of India computed for Himachal, 13,066 million units, less roughly 1,093 million units that Himachal owes for its share of the projects’ capital cost. The Court accepted that computation, turned down all three of Punjab’s objections, and gave Punjab five more years than the Centre had proposed.
A bench of Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana decided the matter in Original Suit No. 2 of 1996, which Himachal filed under Article 131 of the Constitution. The judgment, marked reportable, was written by the Chief Justice. It treats the exercise as the execution of a 2011 decree.
Dams built on Himachal land
The Bhakra-Nangal Project and the Beas Project stand substantially on the territory of the former princely State of Bilaspur and in Kangra district, both now in Himachal Pradesh. Bhakra-Nangal submerged about 27,869 acres of Bilaspur land. Beas submerged over 65,050 acres in Kangra.
The power went elsewhere. It was enjoyed mainly by the composite State of Punjab and, after Punjab was reorganised in 1966, by Punjab, Haryana, Rajasthan and the Union Territory of Chandigarh.
Under the Punjab Reorganisation Act, 1966, effective from 1 November 1966, Himachal received part of Punjab’s territory and population. Section 78 of that Act made the rights and liabilities over the two projects pass to the successor States in proportions to be fixed by agreement, or by the Centre if no agreement came within two years.
Ad hoc shares that never became final
No final apportionment was made. The judgment records that the power kept flowing on an ad hoc basis. Of the 84.78 per cent of Bhakra-Nangal attributed to composite Punjab, Punjab got 54.50 per cent, Haryana 39.50, Himachal 2.50 and Chandigarh 3.50.
On Beas Unit I, Himachal was recorded as receiving 15 MW. On Beas Unit II it received nothing. Separately, it got 1.2 lakh units a day from Bhakra-Nangal at a concessional rate the record calls the old Himachal Pradesh rate.
Himachal wrote to the Centre on 22 October 1969 claiming 7.19 per cent of the benefits, based on the share of Punjab’s population transferred to it. The Centre rejected the claim in 1994, and a tripartite meeting in 1995 failed.
The 1996 suit and the 2011 decree
Himachal sued in 1996. It sought 12 per cent of net power free of cost on a Home State principle, in the alternative 7.19 per cent on the population ratio, Rs 2,199.77 crore as compensation, and interest. The defendant States said the 1967 summary record and a 1978 arrangement had already settled the shares.
By judgment of 27 September 2011 the Court decreed the suit in part. It found the suit within time, since Article 131 prescribes no limitation period. It held the 1967 record tentative, not a binding agreement. It rejected the 12 per cent claim, saying the 1985 Cabinet decision Himachal relied on gave no enforceable right.
It declared Himachal entitled to 6.095 per cent of total Bhakra-Nangal power, 5.752 per cent of Beas Unit I and 2.984 per cent of Beas Unit II. Punjab’s share was put at 51.8 per cent and Haryana’s at 37.51 per cent. Chandigarh’s 3.5 per cent requirement was to come out of their shares.
The suit failed against Rajasthan, which never formed part of composite Punjab. Himachal’s legal right to the power was held enforceable against Punjab, Haryana, Chandigarh and the Union.
The Court did not award the Rs 2,199.77 crore claimed. It asked the Union to compute what was due and file a statement within six months. The 2026 judgment notes that the 2011 decree has an internal slip: one clause refers to Defendants 3 and 4 where Punjab and Haryana, Defendants 2 and 3, were meant.
Fifteen years of computing
The Ministry of Power revised the energy allocation from 1 November 2011 and set up a three-member committee, with the Bhakra Beas Management Board chairman on it, to work out the earlier period. On 5 July 2013 the Union filed its affidavit.
It put Himachal’s total entitlement from 1966 to October 2011 at 13,066 million units: 8,523 from Bhakra-Nangal, 3,145 from Beas Unit I and 1,398 from Beas Unit II. Himachal accepted the figure. Punjab and Haryana disputed it.
The Union rejected four possible rates for valuing the shortfall and proposed what it called the NFL rate, the commercial rate at which National Fertilizer Limited drew power from the common pool. At that rate it computed Rs 1,497.39 crore, or Rs 1,525.62 crore with compound interest at 6 per cent, payable by Punjab and Haryana in the ratio 58:42.
The same affidavit put Himachal’s own liability for capital cost and renovation and operating expenditure at Rs 111.54 crore without interest. It also suggested compensation in kind over 30 years as an alternative to money.
Settlement efforts ran alongside. The Attorney General for India was asked to help the parties in August 2014 and reported on 16 January 2015. Talks in November 2017 produced no settlement document. A third reference began on 11 September 2024, and on 4 February 2025 the parties were given what the Court called a last opportunity.
What each State argued
Himachal said the NFL rate was a concessional subsidy from the Green Revolution era and never meant for inter-State exchanges. It pressed for the BTPS rate, which the Board used for Chandigarh, Rajasthan and for Punjab and Haryana among themselves. At that rate it claimed Rs 4,249.45 crore from Punjab and Haryana.
It also claimed Rs 1,745 crore it said it spent buying power on the open market between 1989 and 2011, and losses from submergence, forest loss and displacement. It did not dispute the Union’s Rs 111.54 crore figure for its own liabilities.
Punjab argued that the 13,066 million units ignored the 1.2 lakh units a day Himachal separately received. By its count that was about 1,972 million units over 1966 to 2011, leaving net arrears of 11,094 million units.
Punjab also put Himachal’s capital-cost liability at Rs 1,611.88 crore on 31 October 2011, which it said had grown to Rs 6,368.29 crore by 31 March 2026. After adjusting pool revenue and operating costs, it said Rs 6,683.68 crore was recoverable from Himachal. It wanted the O&M rate used for valuation.
Haryana disputed the 58:42 split and said the Board data the Union relied on was unaudited. It put the capital liability owed to it at Rs 1,070.75 crore and argued that loans apportioned between Punjab and Haryana in 1966 should be attributed to Himachal at 7.19 per cent. Haryana later agreed in principle to the Union’s framework.
The Attorney General’s cashless formula
The Attorney General for India filed notes on 19 March, 22 June and 16 July 2026. They proposed a settlement with no direct payments between the States. Punjab and Haryana would supply the 13,066 million units over 15 lean seasons, October to March, at 871 million units a year.
Himachal would pay the Board’s charges for the year of supply. Its capital-cost liability, reconstructed from loan and repayment data the Comptroller and Auditor General supplied on 6 February 2026, came to about Rs 420.77 crore. Of that, Rs 249.23 crore was attributed to Punjab and Rs 171.55 crore to Haryana.
The Union would convert that liability into energy at Rs 3.85 a unit, about 1,093 million units, and set it against the arrears. About 11,973 million units would remain, at roughly 798 million units a year. Himachal and Haryana agreed in principle on 30 July and 20 August 2026. Punjab did not.
Punjab’s three objections
Punjab’s first objection was the 1.2 lakh units a day. Its second was the conversion rate: it said the Rs 420.77 crore should be turned into energy at the current O&M rate of 79 paise a unit, which would leave 5,768 million units due to Himachal.
The third was the schedule. Punjab said 30 years, as an earlier Union submission had suggested, was the better course.
Why the Court turned them down
The Chief Justice began by limiting the exercise. The Court was not reopening the 2011 decree or letting parties relitigate settled points. In his words the task is
“in the nature of execution proceedings” (para 30)
It noted that the Union had tried repeatedly to broker a deal, and that responsibility had now passed to the Court to settle the matter finally. Punjab’s reservations had, prima facie, produced an avoidable stalemate.
On the 1.2 lakh units a day, the bench found the supply already accounted for in the Union’s framework, which weighed the decree’s distribution ratios, the arrears owed by the two States and the liability Himachal owes for energy supplied to it. Punjab’s contentions were “vague and superficial” and amounted to relitigating the decree (para 33).
On the conversion rate, it said Punjab was inflating Himachal’s liability to shrink the arrears. The arrears relate to an earlier period and cannot be valued at a rate that prevails today (para 36).
The Court also noted that Punjab accepted, in principle, the method used to compute Himachal’s capital-cost liability, even while disputing the final dues. The computation, it said, was not the product of any single method but followed the Union’s review of various formulae and rates.
Fifteen years becomes twenty
On the schedule, the bench observed that Punjab’s only reason for 30 years was an earlier Union written submission. Haryana, faced with the same 15-year period, took no exception.
Even so, given the size of the arrears and the aim of closing a long dispute, the Court said it would extend a concession to the defendant States. It lengthened the period for supplying the arrears from 15 years to 20 years (para 38).
Order
The Court directed that the energy arrears be taken at 13,066 million units, to be supplied by Punjab and Haryana at 653 million units a year over 20 lean seasons, October to March. The inter se ratio is 58:42 for Bhakra-Nangal and 60:40 for Beas.
Himachal will pay the Bhakra Beas Management Board’s charges for the year in which each tranche is received. Its capital-cost liability for its 7.19 per cent share, the unreimbursed share of loan servicing Punjab and Haryana have borne since 1966-67, is assessed at Rs 420.77 crore: Rs 249.23 crore for Punjab and Rs 171.55 crore for Haryana.
That liability is adjusted against the arrears with energy valued at Rs 3.85 a unit, about 1,093 million units. The balance, about 11,973 million units, is to be supplied at roughly 598 million units a year over the same 20 lean seasons, in the same ratios. The settlement is cashless.
The bench recorded its appreciation of the Attorney General for India for years of mediation and for the framework. It also said the directions are binding and must be acted on without reservation, and that the decree could not be rendered fruitless by the “unwillingness or recalcitrance of a Judgment Debtor” (para 43).
The suit stands disposed of, along with pending applications.