SC urges AG for settlement of dispute b/w HP, Punjab, Haryana

The Supreme Court has asked Attorney General K K Venugopal to look into the prospect of an amicable settlement of the decades-old dispute between Punjab, Haryana and Himachal Pradesh over payment of compensation relating to the Bhakra-Nangal and Beas power projects.
The apex court directed the warring states to depute some responsible officers on the date to be fixed by Venugopal for adjudication of the long-drawn dispute in the top court.
"We request K K Venugopal, Attorney General, to go through the matter to find an amicable settlement regarding the liability of the payment of the States of Punjab and Haryana to the State of Himachal Pradesh. The respective States may depute some responsible officer on the date to be fixed by K K Venugopal for this purpose," a bench of Justices R K Agrawal and A M Sapre said.

The current dispute is an offshoot of the September 2011 verdict of the apex court in an original suit filed by Himachal Pradesh in 1996, seeking 7.19 percent of the total power generated from three hydro power projects, Bhakra- Nangal-Beas Projects, situated in its territory with effect from November 1, 1966.
The apex court in its verdict had partly allowed Himachal Pradesh's claim and directed the Centre to calculate the compensation amount and submit a report in consultation with the three states.
The apex court had on August 7, 2014, asked the Attorney General to assist in the matter to resolve the issue amicably. The Centre had filed its report in the case specifying how the compensation amount can be paid as per the 2011 decree of the top court.

Himachal Pradesh has claimed that a compensation amount of Rs 4,249.45 crore is payable to it from Punjab and Haryana for the short supply of electricity from the date of actual supply and its entitlement, as per the apex court verdict.

The hilly state had stated it was entitled to Rs 2,724 crore on account of the Bhakra projects, Rs 1,033.54 crore in respect of Dehar Power project and Rs 491.89 crore with regard to the Pong Power project.
The Centre in its report had said that as per the apex court's verdict, Himachal Pradesh is entitled for compensation of Rs 1,497 crore, about one-third of the claim.

The compensation amount claimed by HP was also disputed by Punjab and Haryana who had told the apex court that if it was entitled to 7.19 per cent share of the total power from the projects with effect from November 1, 1966, then it should also share the construction cost of these projects.
The Bhakra dam across the river Satluj was proposed in the year 1944 in the then Bilaspur State. The construction of Bhakra dam resulted in submergence of a large territory of the Bilaspur State but benefitted the then Province of Punjab.
The then Raja of Bilaspur had agreed to the proposal for construction of the Bhakra dam only on certain terms and conditions including payment of royalties for generation of power from the water of the reservoir of the Bhakra dam.

However, the formal agreement between the Raja of Bilaspur and the province of Punjab, could not be executed as the Bilaspur State ceded to the Dominion of India in 1948.
In 1954, Bilaspur and Himachal Pradesh were united to form a new State of Himachal Pradesh under the Himachal Pradesh and Bilaspur (New States) Act, 1954.
In 1966, Parliament enacted the Punjab Reorganisation Act, which bifurcated the erstwhile State of Punjab into two states of Punjab and Haryana, and transferred some territories of the erstwhile State of Punjab to the Union Territory of Himachal Pradesh.
With effect from January 25, 1971, Himachal Pradesh became a full-fledged State by the State of Himachal Pradesh Act, 1970.

The apex court in its 2011 verdict had noted that the construction of Bhakra dam had brought lot of benefits to the country and neighbhouring states like Punjab, Haryana, Rajasthan and Chandigarh, but also resulted in submergence of 27,869 acres of land in the erstwhile Bilaspur State out of the total 41,600 acres.
It had said that submergence and reservoir of water over large areas of land in Himachal Pradesh have meant loss of cultivated and uncultivated land to a total extent of 1,03,425 acres which needed to be compensated by neighbhouring states.