This judgment does not reopen the 2011 decree or decide any fresh entitlement: it executes that decree by fixing how the arrears are computed and supplied. It records no finding on any claim outside the arrears and capital-cost liability dealt with in the directions, and the supply schedule depends on the Bhakra Beas Management Board's charges for each tranche of energy received.
- Case
- State of Himachal Pradesh v. Union of India and Others
- Court
- Supreme Court of India
- Decision
- Citation
- 2026 INSC 1200
- Bench
- Surya Kant; Joymalya Bagchi; V. Mohana
- Judgment by
- Surya Kant, CJI
- Case numbers
- Original Suit No. 2 of 1996; Diary No. 76045 of 1996
- Outcome
- Final judgment in an original suit under Article 131 disposing of the suit in terms of the directions; the 2011 decree stands executed through a cashless settlement schedule.
The decision
The Supreme Court has brought the decades-old Bhakra-Nangal power dispute to a close, disposing of Himachal Pradesh's 1996 original suit with a cashless settlement under which Punjab and Haryana will supply the state its arrears of electricity rather than money. A bench of Chief Justice Surya Kant and Justices Joymalya Bagchi and V. Mohana delivered the signed reportable judgment on 6 November 2026.
The court fixed the energy arrears due to Himachal Pradesh at 13,066 million units, to be supplied by Punjab and Haryana at 653 million units a year over 20 lean seasons, the period from October to March, in the ratio of 58:42 for the Bhakra-Nangal Project and 60:40 for the Beas Projects. Himachal Pradesh must pay the Bhakra Beas Management Board's charges for the year in which each tranche of energy is received.
Against those arrears the court adjusted Himachal Pradesh's liability towards its 7.19% share of the capital cost of the two projects, assessed at ₹420.77 crore — ₹249.23 crore attributable to Punjab and ₹171.55 crore to Haryana. Valuing the energy at ₹3.85 per unit, the adjustment absorbs approximately 1,093 million units, leaving a balance of approximately 11,973 million units to be supplied at about 598 million units a year over 20 lean seasons, in the same ratios. The suit stands disposed of, with pending applications also disposed of in the same terms.
A decree waiting fifteen years for execution
Himachal Pradesh instituted the suit in 1996 invoking the Supreme Court's original jurisdiction under Article 131 of the Constitution, claiming a share in the power generated from the Bhakra-Nangal and Beas hydro-electric projects against the Union of India, Punjab, Haryana, Rajasthan and the Union Territory of Chandigarh.
The suit was decreed in part by the court on 27 September 2011, which held Himachal Pradesh entitled to 7.19% of the power generated from the two projects and directed the Union of India to work out the amounts due under that declaratory decree. But giving effect to the decision produced further proceedings and conflict, over both the computation of the energy due and the manner in which the resulting amounts and liabilities were to be worked out against Punjab and Haryana.
How the dispute arose
The Bhakra-Nangal Project, and later the Beas Project, were built substantially on territory that now forms part of Himachal Pradesh: the Bhakra-Nangal Project required the submergence of about 27,869 acres of land of the erstwhile state of Bilaspur, and the Beas Project over 65,050 acres in Kangra district. Yet the power generated came to be enjoyed principally by the composite state of Punjab and, after its reorganisation in 1966, by Punjab, Haryana and Rajasthan and the Union Territory of Chandigarh.
The judgment records that a draft agreement dated 7 July 1948 had been prepared between the governments of Bilaspur and East Punjab on the terms for making Bilaspur land available for the Bhakra Project, including a provision for allocation of power to Bilaspur. Although initialled by representatives of both governments, the draft was never formally signed or executed. Bilaspur was later united with the Himachal Pradesh region in 1954, but the state's share in the projects' power remained unsettled until the 2011 decree.
The settlement framework and Punjab's objections
To give effect to the 2011 decree without any direct financial transaction between the states, the Attorney General for India proposed a cashless settlement framework. Under it, Punjab and Haryana would supply 13,066 million units of energy arrears over fifteen lean seasons at 871 million units a year, in the ratio of 58:42 for the Bhakra-Nangal Project and 60:40 for the Beas Projects, with Himachal Pradesh's reconstructed capital-cost liability of about ₹420.77 crore adjusted against part of the entitlement at ₹3.85 per unit, leaving about 11,973 million units over the remaining fifteen-year period at about 798 million units a year.
The proposal was placed before the court on 30 July 2026 and again on 20 August 2026. Himachal Pradesh and Haryana agreed to it in principle on both occasions. Punjab recorded reservations and filed its own note, raising three objections: that the arrears computation ignored a daily supply of 1.2 lakh units to Himachal Pradesh, which would reduce the net arrears to 11,094 million units; that converting the capital-cost liability at ₹3.85 per unit was fallacious and that the operation-and-maintenance rate of 79 paise should have been used; and that the arrears should be supplied over 30 years rather than 15.
Why the court rejected the objections
The court treated the present exercise as one of execution of the 2011 decree, not as an occasion to reopen matters conclusively decided by it or to let the parties re-agitate settled issues. It noted that the Union of India had made repeated efforts to bring about a settlement without success, so that the responsibility of settling the matter finally had devolved on the court, and that the Attorney General's latest computation note dated 19 March 2026 had been substantially accepted by all stakeholders.
Punjab's reservations, the court held, were vague and superficial and amounted to an attempt to relitigate issues already settled by the 2011 decree. By way of illustration, the daily supply of 1.2 lakh units said to be adjustable against the arrears had already been considered and accounted for in the capital-cost liability worked out in the Union's framework. The computation, the court found, had been made after taking into account the ratios of energy distribution fixed by the decree, the energy arrears owed by the two states, and the liability owed by Himachal Pradesh for energy supplied to it.
The operative schedule
The court's directions depart from the Attorney General's proposal on the schedule: instead of fifteen lean seasons at 871 million units a year, the arrears of 13,066 million units are to be supplied at 653 million units a year over 20 lean seasons, and the balance of about 11,973 million units at about 598 million units a year over 20 lean seasons. The inter se ratios — 58:42 for the Bhakra-Nangal Project and 60:40 for the Beas Projects — are unchanged, as are the capital-cost figure of ₹420.77 crore and the ₹3.85-per-unit valuation.
Recording its appreciation for the Attorney General's sustained efforts in mediation and in formulating the framework, the court stressed that its directions are binding and must be acted upon without reservation, and that a decree pending for several decades cannot be rendered fruitless by the unwillingness of a judgment debtor. The suit stands disposed of in those terms.
BANTHRY ANALYSISFor law students
This judgment is a study in the difference between deciding a right and executing a decree. The substantive entitlement — 7.19% of the power — was settled in 2011; everything since has been arithmetic and mechanics, which is why the court repeatedly refused to treat Punjab's objections as a fresh hearing. In an Article 131 original suit between states, the court acts as the forum of first and last resort, so a decree that cannot be executed is a decree that fails.
Note also the court's solution to a federal money problem: instead of ordering cash payments between state exchequers, it converted a money liability (capital cost) into energy at a fixed tariff and set the balance off against arrears, producing a settlement that needs no financial transfer at all.
READING PROMPTSQuestions for a closer reading
- What share of power from the Bhakra-Nangal and Beas projects did the 2011 decree hold Himachal Pradesh entitled to, and what did the 6 November 2026 judgment add?
- How does the cashless settlement work: what is supplied, at what rate, over how many lean seasons, and what is adjusted against it?
- Why did the court reject Punjab's objections to the computation, and what did it say about reopening the 2011 decree?
