The Supreme Court resolved a 30-year-old dispute over electricity dues from the Bhakra-Nangal and Beas projects, directing Punjab and Haryana to supply Himachal Pradesh with 589 million units annually for 20 years, ensuring relief and fairness in power-sharing.
THE SUPREME COURT on Friday, November 6, 2026, settled a decades-old interstate dispute over electricity dues arising from the Bhakra-Nangal and Beas hydroelectric projects, directing Punjab and Haryana to supply Himachal Pradesh with 589 million units of electricity every year during October and March, over the next 20 years.
A three-judge bench comprising Chief Justice of India Surya Kant, and Justices Joymala Bagchi and V Mohana gave their assent to a settlement proposed by the Centre, in order to clear all the outstanding electricity dues through an energy-based arrangement. With this verdict, the Supreme Court gave effect to a directive given by the same court in 2011.
Based on the SC’s directive, Punjab and Haryana will supply Himachal Pradesh approximately 598 million units of electricity annually during October and March, for the next 20 years — totalling 11,973 million units.
The Bhakra-Nangal Hydro-Electric Scheme was first proposed in 1944 to harness energy from the Satluj river. Since then, a dispute ensued which continued on for decades, surrounding the claims of power-sharing and reorganization of states, among others.
The judgement has put an end to the dispute that reached the court formally with a suit filed by Himachal Pradesh in 1996,
In 2011, the dispute entered the jurisdiction of the Supreme court, and a two-judge Bench rejected Himachal Pradesh’s claim to 12% free power, but ruled for the 7.19% power claim.
The Bhakra-Nangal Hydro-Electric Scheme came to light in 1944, as a major hydroelectric power project in the North Indian heartland. The project, while sufficing a major demand for energy, would also require the submergence of around 28,000 acres of land belonging to the earlier princely state of Bilaspur. Additionally, the Beas Project would bring about the submergence of an additional 65,000 acres in Kangra district, Himachal Pradesh.
Subsequently, a draft agreement was initiated between the Government of Bilaspur and the Government of East Punjab to settle the terms for financial arrangements involving land and power allocation on July 7, 1948. However, the draft was not materialized in reality.
Later, on August 15, 1948, the Raja of Bilaspur signed the Bilaspur Merger Agreement, thereby entering into the authority of the Dominion Government. The Dominion Government assumed the formal administrative control in October, 1948.
With this, Bilaspur was administered as a Chief Commissioner’s Province under the States Merger Order of 1949. Then, Bilaspur was merged with Himachal Pradesh as “C State.” Later, it became part of a Union Territory under the Seventh Amendment of the Constitution in 1956.
On January 25, 1955, the capital cost for the projects were set following an Inter-State Conference on the Ravi and Beas waters, and allocated 85 % of the capital cost of Beas Unit I and 32% of Unit II to Punjab — which was not reorganized till then, i.e. Punjab and Haryana were a single state.
Following this, an agreement was signed between Joint Punjab and Rajasthan that fixed the respective water shares in the Bhakra-Nangal Project at 84.7% and 15.2% with Punjab bearing 84.7% of the electricity usage costs.
Things, however, began to change with the Punjab Reorganization Act of 1966, that divided Punjab into the states of Punjab and Haryana, and created the Union Territory of Chandigarh. As a result, a significant section of land and population were transferred to Himachal Pradesh.
As a result, the earlier arrangements sought to be altered according to this newer equation. The legal and constitutional provisions called for an apportionment of the rights and liabilities of the Bhankra-Nangal and Beas River Projects amongst the newly formed states. However, no such official or formal apportionment took place.
The distribution of power, costs and the share of the states, instead, were settled on an ad-hoc basis arising out of an informal settlement by the Secretary of the Ministry of Irrigation and Power in 1967. Subsequently, the informal arrangement provided Punjab 54.5%, Chandigarh 3.5%, Haryana 39.5% and Himachal Pradesh with 2.5% of the Bhakra-Nangal power.
This newer arrangement did not sit well with Himachal Pradesh, as they argued about a lack of adequate share in the power supply. Taking this issue up to the Union Government, the State of Himachal Pradesh demanded a 7.19% share of the total generated power. After this, Himachal attained full statehood and continued to place its demand, but was wholly rejected by the Central Government in 1994.
The Himachal Pradesh government filed a suit in 1996 demanding a fair share of power generated, and since then the case had been making its rounds in the legal-judicial institutions of the country.
Finally, after almost 30 years to the pleas and petitions, the Supreme Court Bench directed Punjab and Haryana to deliver 11,973 million units of power arrears to Himachal Pradesh over the next 20 years in the period of October and March.
[OG/AR]
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