TMI Blog2011 (9) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... of Chandigarh (defendant No. 5), on the other hand, under Article 131 of the Constitution of India relates to the power generated in the Bhakra-Nangal and Beas Projects. The Case of the Plaintiff (State of Himachal Pradesh) in the plaint 2. The Bhakra dam across the river Satluj was proposed in the year 1944 in the Bilaspur State. The construction of Bhakra dam was to result in submergence of a large territory of the Bilaspur State but would benefit the Province of Punjab. Hence, the Raja of Bilaspur agreed to the proposal for construction of the Bhakra dam only on certain terms and conditions detailed in a draft agreement which was to be executed on behalf of the Raja of Bilaspur and the Province of Punjab. These terms and conditions included payment of royalties for generation of power from the water of the reservoir of the Bhakra dam. The formal agreement between the Raja of Bilaspur and the province of Punjab, however, could not be executed as the Bilaspur State ceded to the Dominion of India in 1948. When the Constitution of India was adopted in the year 1950, Bilaspur and Himachal Pradesh were specified as Part-C States in the First Schedule to the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt of the diversion of water from river Beas at Pandoh, a reservoir comprising an area of 323 (three hundred twenty three) acres and a storage capacity of 33240 (thirty three thousand two hundred and forty) acre feet have been created. Unit-II of the project involved the construction of Pong Dam across river Beas at Pong and the construction of the Pong Dam has caused submergence of more than 65050 (sixty five thousand fifty) acres of land in Kangra District including prime and fertile agricultural land. Consequently, a large number of families have been uprooted from their homes and fertile agricultural land which they were cultivating and these families need to be rehabilitated. Although Units-I and II of Beas Project are located in the State of Himachal Pradesh, benefits of the two units have accrued to Defendants Nos. 2, 3, 4 and 5. 5. The Plaintiff is therefore entitled to its due share of power generated in the Bhakra-Nangal and Beas Projects. Under the scheme for apportionment of assets and liabilities between the successor States in the Punjab Reorganisation Act, 1966 the assets and liabilities are to be transferred to the successor States in proportion to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Plaintiff in respect of the Bhakra-Nangal and Beas Projects. 7. In the absence of the any such final determination by the Central Government, the power generated in the Bhakra-Nangal and Beas Projects presently is being shared by an ad hoc arrangement. After deducting the power consumed for auxiliary purposes and the transmission losses, the balance of the power generated in the two projects is presently apportioned on ad hoc basis is given as under: Bhakra-Nangal Beas Name of the State/U.T Unit I (Dehar) Unit II (Pong) Rajasthan 15.22% 20% 58.50% The remaining is shared as under: 84.78% 80% 41.50% Punjab 54.50% 60% 60% Haryana 39.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I annexed to the plaint; (c) A decree for a sum of ₹ 2199.77 (two thousand one hundred ninety nine decimal seven) crores in favour of the Plaintiff and against the Defendants jointly and severally as compensation/reimbursement for their failure of supply to the Plaintiff 12% and 7.19% share of the power generated in the two projects, being the total of the statements I and IV; (d) A decree for interest, pendente lite and future at the prevailing bank rates till the realization of amount in full; (e) Costs of the suit; (f) Other further reliefs as may be deemed fit and proper in the circumstances of the case. Written Statement of Defendant No. 1 (Union of India) 10. The Bhakra-Nangal Project was completed in 1963 and the Beas Project was completed in 1977 and the suit filed by the Plaintiff in 1996 claiming damages from Defendant No. 1 was hopelessly barred by limitation. 11. By an agreement executed on 13.01.1959, the composite State of Punjab and the State of Rajasthan agreed for the construction of the Bhakra dam across the river Satluj as well as other ancillary works and the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 7.19% share of the total power generated from the Bhakra-Nangal and Beas Projects in its letter dated 22.10.1969 but by letter dated 22.03.1972, Ministry of Irrigation and Power, Government of India informed the Plaintiff that the allocation of power made at the meeting on 17.04.1967 of the representatives of the successor States/Union Territories of the composite State of Punjab will not be modified. The Subrahmanyam Report recommending 7.19% of the total share of power generated from Beas Project for the Plaintiff has not been accepted by the Defendant No. 1 and was not binding on defendant No. 1 and the other Defendants. 14. The formula of 12% free power to the mother State bearing hydro-electric power project is applicable only in respect of Central Sector Hydro Projects and is not applicable to the Bhakra-Nangal and Beas Projects and this has been clarified in the D.O. Letter dated 11.04.1994 of the Ministry of Power, Government of India to the Chief Minister of the Plaintiff State and has also been reiterated in the D.O. Letter dated 28.06.1995 of the Ministry. 15. Under Section 78 of the Punjab Reorganisation Act, 1966, the claims of the successo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the concerned State Governments in the letter dated 12.03.1967 of the Government of India, Ministry of Finance, Department of Economic Affairs, New Delhi. 18. On 27.06.1961, the Lt. Governor, Himachal Pradesh, had written to the Chief Minister of Punjab that Himachal Pradesh should be given guaranteed preference in the allotment of power generated from the Power House to be set up at Salappar (Dehar) - Unit No. 1 of Beas Project. After finding out the anticipated firm demand of power from the Salappar (Dehar) Power House, the State of Punjab in its communication dated 10.08.1962 agreed to allot 15 M.W. power to Himachal Pradesh within one year of the commissioning of the two units of these projects. 19. The decision of the Union Cabinet taken on 12.02.1985 that 12% of power generated at Bhakra and Beas Projects will be supplied to the Home State is applicable to only Central Sector Hydro-Electric Power Projects financed by the State Government and is not applicable to Bhakra and Beas Projects, which are not Central Projects financed by the Central Government. Moreover, the Central Government's decision dated 12.02.1985 does not apply to the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54.5% Haryana 39.5% Chandigarh 3.5% Himachal Pradesh 2.5% Accordingly, only 2.5% of the total power generated in the two projects out of the share of the composite State of Punjab, has been made available to the successor State of Himachal Pradesh right from May, 1967. Since the agreement dated 17.04.1967 has been arrived at within two years of the appointed date mentioned in the Punjab Reorganisation Act, 1966, the Central Government ceased to have any power under Section 78 of the Punjab Reorganisation Act, 1966 to determine the dispute. 24. The concept of 12% free power from Hydro stations to the Mother State or Home State is applicable to only Central Sector Projects commissioned after 07.09.1990 subject to the condition mentioned in the letter dated 01.11.1990 of Department of Power, Government of India and is not applicable to jointly owned State Sector Projects such as Bhakra-Nangal and Beas Projects, commissioned much earlier than 07.09.1990. 25. The Bhakra D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate and continued to be administered through the Chief Commissioner by the Government of India. Hence, it is absolutely irrelevant that about 3/4th of the total area of the reservoir of Bhakra Dam fell within the State of Bilaspur. With the construction of the Bhakra-Nangal Project, overall development took place in the area and as a result new infrastructural facilities were built in the project area such as new roads, new bridges, new township, new schools and colleges, fisheries, tourism, etc. and all these benefited the local populace of the then Part-C State of Bilaspur. It is, therefore, not correct that the then Part-C State of Bilaspur, which now formed as a part of Plaintiff-State, has only suffered on account of the submergence caused by the construction of the Bhakra Dam. 29. There was no agreement as such between the then State of Punjab and the Raja of Bilaspur with regard to the construction of the Dam and unless the draft agreement was finally approved, settled and signed by the parties, no rights could be claimed by the State of Bilaspur under the alleged draft agreement. 30. During the construction of the Bhakra-Nangal Project, the predece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smuch as the Bhakra-Nangal Project was completed in 1963 and the Beas Project was completed in 1977 and the suit has been filed in the year 1996. 35. Under Section 78(1) of the Punjab Reorganisation Act, 1966, the rights and liabilities of the successor States/Union Territories of the composite State of Punjab in relation to the Bhakra-Nangal and Beas Projects are to be fixed by an agreement entered into by the successor States/Union Territories after consultation with the Central Government or, if no such agreement is entered into within two years of the appointed day, by an order of the Central Government having regard to the purposes of the project. Hence this suit filed by the Plaintiff claiming rights in the power generated in the Bhakra-Nangal and Beas Projects is not maintainable under the provisions of the Punjab Reorganisation Act, 1966. 36. An agreement has in fact been arrived at in relation to Bhakra-Nangal Project by the representatives of the successor States/Union Territories of the composite State of Punjab at a meeting held on 17.04.1967 under the Chairmanship of the Secretary, Ministry of Irrigation and Power, Government of India, and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Whether the suit is not maintainable being barred by limitation, delay and laches? (Defendant Nos. 1 2) 02. Whether after the merger of the State of Bilaspur with the Dominion of India, plaintiff could still have any cause of action to file the present suit? (Defendant No. 4) 03. Whether the suit barred by reasons of Article 363 of the Constitution? (Defendant No. 4) 04. Whether the suit is not maintainable under Article 131 of the Constitution? (Defendant No. 4) 05. Whether the suit does not disclose any cause of action against the Defendant Nos. 3 and 4 and therefore liable to be rejected under Order XXIII Rule 6(a) of the Supreme Court Rules, 1966. (Defendant Nos. 3 and 4). 06. Whether the suit is not maintainable by virtue of the scheme of the Punjab Reorganisation Act, 1966 in general and provisions of Sections 78 to 80 of the said Act in particular? (Defendant Nos. 1 2) 07. Whether in the discussions held on 17th April, 1967, any agreement was reached between the party States as regards their share in power generated (rights to receive and to utilize the power generated) in the Bhakra Project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention that the suit is barred by limitation. Article 131 of the Constitution does not prescribe any period of limitation within which a State or the Union of India has to file a dispute in this Court. No other provision of law has been brought to our notice prescribing the period within which a dispute under Article 131 of the Constitution can be instituted by a State against any other State or the Union of India. Moreover, as we will indicate hereinafter in this judgment, there has been no final allocation of share of power from the Bhakra-Nangal Project and the Beas Project to the Plaintiff-State as yet and whatever allocations of power from the two projects to the Plaintiff-State have been made are only ad hoc or interim. Until a final decision was taken with regard to allocation of power to the Plaintiff-State from the two projects, the claim of the Plaintiff-State to appropriate allocation of power from the two projects was live and cannot be held to be stale or belated. Our answer to Issue No. 1, therefore, is that the suit was not barred by limitation, delay and laches. Issue No. 2 43. The second Issue is whether after the merger of the State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter was administered as a Chief Commissioner's Province by the Government of India and all rights of the Raja of Bilaspur vested in the Government of India. 44. We, therefore, hold that the Plaintiff will not have any cause of action to make any claim on the basis of any right of Raja of Bilaspur prior to the merger of Bilaspur State with the Dominion of India. The pleadings in the plaint and the reliefs claimed therein, however, show that the Plaintiff's case is not founded only on the rights of Raja of Bilaspur prior to its merger with the Dominion of India. The Plaintiff's claim to the share of power generated in the Bhakra-Nangal and Beas Projects is also based on Section 78 of the Punjab Reorganisation Act, 1966 and the rights of the State of Himachal Pradesh under the Constitution. The claim of the Plaintiff-State to share of power from the Bhakra-Nangal and Beas Projects in the suit insofar as it is based on provisions of the Punjab Reorganisation Act, 1966 and the provisions of the Constitution are not affected by the merger of the State of Bilaspur with the Dominion of India. Issue No. 2 is answered accordingly. Issue No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any liability or obligation arising out of any of the provisions of this Constitution relating to any such treaty, agreement, covenant, engagement, sanad or other similar instrument. (2) In this article- (a) Indian State means any territory recognized before the commencement of this Constitution by His Majesty or the Government of the Dominion of India as being such a State; and (b) Ruler includes the Prince, Chief or other person recognised before such commencement by His Majesty or the Government of the Dominion of India as the Ruler of any Indian State. 47. The language of the proviso to Article 131 of the Constitution makes it clear that the jurisdiction of this Court under Article 131 shall not extend to a dispute arising out of any treaty, agreement, covenant, engagement, sanad or other similar instrument which, having been entered into or executed before the commencement of the Constitution, continues in operation after such commencement, or which provides that the said jurisdiction shall not extend to such a dispute. Hence, there is a clear bar for this Court to exercise jurisdiction under Article 131 of the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly. Issue No. 4 48. Issue No. 4 has been raised by the Defendant No. 4 (State of Rajasthan) and its case is that the suit is actually a dispute with regard to use of water in inter state rivers, namely, Satluj and Beas, and is barred under Article 262(2) of the Constitution. Mr. Vaidyanathan, learned counsel appearing for the Defendant No. 4, submitted that the case of the Plaintiff is that on account of the use of water of the two inter state rivers for generation of hydro-electric power in the Bhakra-Nangal and Beas Projects, the Plaintiff has lost its entitlement to beneficial use of the water. He cited decisions of this Court in Re: Cauvery Water Disputes Tribunal 1993 Supp (1) SCC 96 (II), State of Karnataka v. State of A.P. and Ors. (2000) 9 SCC 572, State of Haryana v. State of Punjab and Anr. (2002) 2 SCC 507 and State of Orissa v. Government of India and Anr. (2009) 5 SCC 492 in support of his submissions that a suit which is really a dispute relating to the use of water of an inter-state river is barred under Clause (2) of Article 262 of the Constitution read with Section 11 of the Inter-State Water Disputes Act, 1956. 49. Clause (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate Water Disputes Act, 1956. Issue No. 5 50. Mr. Nageshwar Rao, learned counsel for Defendant No. 3 and Mr. Vaidyanathan, learned Counsel for Defendant No. 4 submitted that Article 131 of the Constitution is clear that this Court will have the original jurisdiction in a dispute between the parties mentioned therein if and insofar as the dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends . They argued that unless the Plaintiff-State establishes its legal right to the share of power from the Bhakra-Nangal and Beas Projects, the suit of the Plaintiff is not maintainable under Article 131 of the Constitution. They submitted that Order XXIII Rule 6(a) of the Supreme Court Rules, 1966 states that a plaint shall be rejected where it does not disclose any cause of action and in this case since the plaint does not disclose a legal right in favour of the Plaintiff-State to its share of power from the Bhakra- Nangal and Beas Projects, the plaint is liable to be rejected. In support of this contention, Mr. Rao and Mr. Vaidyanathan relied on the decision of this Court in State of Haryana v. State of Punja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e agreement executed with the Raja of Bilaspur and (c) constitutional rights of Himachal Pradesh over its water and land under Entries 17 and 18 of List-II of the Seventh Schedule to the Constitution; (d) the statutory rights under Section 78 of the Punjab Reorganisation Act, 1966 and (e) the right to equal treatment in matter of utilization of power from the Bhakra- Nangal and Beas Projects. 52. We have already held while answering Issue No. 2 that after Bilaspur became part of the Dominion of India, the Plaintiff cannot make any claim to power on the basis of the rights of the Raja of Bilaspur prior to the merger of the Bilaspur State with the Dominion of India. So far as the rights of a State or Union Territory over its water and land are concerned, none of the constituent units of the Indian Union were sovereign and independent entities before the Constitution and after the commencement of the Constitution the constituent units have only such rights as are conferred on them by the provisions of the Constitution. As has been held by this Court in Babulal Parate v. State of Bombay and Anr. AIR 1960 SC 51 cited by Mr. Shyam Diwan, learned Counsel for the Defendant No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard for ensuring efficient, economical and early execution of the Beas Project (comprising Unit-I - Beas Satluj Link and Unit-II the Dam at Pong) and there were the representatives of the States of Punjab, Rajasthan and the Himachal Pradesh Administration and the Government of India in the Beas Control Board. Thus, the submergence of the large areas of Himachal Pradesh because of the construction of the Beas Project took place due to decisions to which the Government of India was a party and when Himachal Pradesh was a Union Territory and the Union of India had executive and legislative power over water and land in Himachal Pradesh by virtue of the constitutional provisions in Article 73(1) and Article 246(4) of the Constitution. The Plaintiff-State therefore cannot have any cause of action to make a claim to power from the Beas Project on the basis of submergence of large areas of Himachal Pradesh. 54. In our considered opinion, however, the Plaintiff had the statutory right under Section 78 of the Punjab Reorganisation Act, 1966 to the utilization of power and also the constitutional right to equal treatment vis- -vis the other successor States of the composite State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Punjab Reorganisation Act, 1966 is necessary. 78. Rights and liabilities in regard to Bhakra-Nangal and Beas Projects (1) Notwithstanding anything contained in this Act but subject to the provisions of Sections 79 and 80, all rights and liabilities of the existing State of Punjab in relation to Bhakra-Nangal Project and Beas Project shall, on the appointed day, be the rights and liabilities of the successor States in such proportion as may be fixed, and subject to such adjustments as may be made, by agreement entered into by the said States after consultation with the Central Government or, if no such agreement is entered into within two years of the appointed day, as the Central Government may by order determine having regard to the purposes of the Projects: Provided that the order so made by the Central Government may be varied by any subsequent agreement entered into by the successor States after consultation with the Central Government. (2) An agreement or order referred to in sub- section (1) shall, if there has been an extension or further development of either of the projects referred to in that Sub-section after the appointed day, prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Defendant No. 2, submitted that Section 78(1) of the Punjab Reorganisation Act, 1966 starts with the non-obstante clause Notwithstanding anything contained in this Act . He argued that considering these opening words in Section 78 of the Punjab Reorganisation Act, 1966, no other provisions of the Act should be looked into by the Court and the rights and liabilities of the successor State of the composite State of Punjab in regard to Bhakra-Nangal and Beas Projects have to be decided with reference to the provisions of Section 78 only. He submitted that Section 204(u) of the Government of India Act, 1935 was the provision corresponding to Article 131 of the Constitution and interpreting the said Section 204(u) of the Government of India Act, 1935 the Federal Court has held in United Provinces v. Governor-General in Council AIR 1939 FC 58 that the term `legal right' used in Section 204 means a right recognized by law and capable of being enforced by the power of a State. He submitted that under Section 78(1) of the Punjab Reorganisation Act, 1966, there is no right of the Plaintiff-State to the power generated in the Bhakra-Nangal and Beas Projects except what is agreed up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouncil (supra) cited by Mr. Diwan and we find that Sulaiman and Varadachariar, JJ. have taken a view that the term `legal right' used in Section 204 of the Government of India Act, 1935 means a right recognized by law and capable of being enforced by the power of a State, but not necessarily in a Court of Law. Section 78(1) by its plain language states that all rights and liabilities of the existing State of Punjab in relation to Bhakra-Nangal Project and Beas Project shall, on the appointed day, be the rights and liabilities of the successor States. This provision in Section 78 is enough to confer a legal right on Himachal Pradesh as a successor State in relation to Bhakra-Nangal and Beas Projects. Clause (b) of Sub-section (3) of Section 78 further provides that the rights and liabilities referred to in Sub-section (1) shall include the rights to receive and utilize the power generated as a result of the projects. This provision in Section 78 further confirms that the rights of the successor State such as the State of Himachal Pradesh includes the right to receive and utilize the power generated as a result of the Bhakra-Nangal and Beas Projects. The fact that the rights and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment or, if no such agreement is entered into within two years of the appointed day, as the Central Government may by order determine having regard to the purposes of the Projects. They submitted that the rights and liabilities of the successor States in regard to Bhakra-Nangal Project have already been fixed by the agreement dated 17.04.1967. 61. Mr. A.K. Ganguli, learned Counsel for the Plaintiff, on the other hand, submitted that no agreement whatsoever in terms of Section 78(1) of the Punjab Reorganisation Act, 1966 has been arrived at between the parties and the agreement dated 17.04.1967 is only `tentative, ad hoc or provisional arrangement' pending final determination of rights and liabilities of the successor States of the composite State of Punjab. He submitted that the Plaintiff did not accept the tentative, ad hoc or provisional arrangement made on 17.04.1967 and lodged its claim with the Central Government in its letter dated 27.10.1969 marked as Ext. P-12 claiming share to the extent of 7.19% of the total benefits from Bhakra-Nangal and Beas Projects, but the Central Government did not decide the claim of the Plaintiff- State and hence the Plaintiff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.5% The above percentages were agreed to the Power Houses, sub-stations, Transmission Lines will, of course, be owned on the basis of location etc. as per distribution shown in Annexure-I. It was further decided that the depreciation accrued and loans raised for any particular fixed asset would be allocated along with the asset itself as per Annexure-I and that the distribution systems and other small lengths of transmission lines, sub- stations etc. not included in the list will go to the successor States on location basis. It will be clear that the decision on the `tentative' allocation of asset and liabilities of Punjab and Haryana had been taken first and this was 58% for Punjab and 42% for Haryana and the shares of Chandigarh and Himachal Pradesh were determined at the meeting held on 17.04.1967 and the resultant allocation was 54% for Punjab, 39% for Haryana, 3.5% for Chandigarh and 2.5% for Himachal Pradesh. The record of the discussions for allocation of shares of the 4 constituent of the composite State of Punjab shows that the basis for distribution was location of the power houses, sub-stations, transmiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from both Bhakra and Beas Projects was `tentative and ad hoc' and not final. There is, in other words, no final agreement between the successor States of the composite State of Punjab with regard to the rights and liabilities of the successor States including the right to the power generated in the Bhakra and Beas Projects in terms of Section 78(1) of the Punjab Reorganisation Act, 1966. Issue No. 7 is answered accordingly. Issue No. 8 63. Mr. Ganguli, learned counsel for the Plaintiff, submitted that the territorial integrity of Bilaspur State could not be affected by submergence on account of construction of Bhakra Dam without the consent of the Bilaspur State and the Raja of Bilaspur while giving such consent, incorporated in the draft agreement various conditions such as payment of royalty and transfer of power to Bilaspur as a consideration for construction of the Bhakra Dam. He submitted that as the Bilaspur State became part of Himachal Pradesh and the State of Himachal Pradesh as the Mother State bears the reservoir of Bhakra- Nangal Project, Himachal Pradesh is the Mother State vis- -vis the Bhakra-Nangal Project. He submitted that similarly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Plaintiff to 12% free power is based upon a notion that Himachal Pradesh has some pre-existing or natural rights over its land and water. He submitted that under Article 3 of the Constitution Parliament has power to form a new State, increase the area of any State, diminish the area of any State, alter the boundaries of any State and alter the name of any State and, therefore, States in India are not indestructible and the territorial integrity of the States can be destroyed by Parliament by law. He argued that the whole notion of Himachal Pradesh having any rights over its land and water apart from what is given by Parliament by law is thus alien to the Indian Constitution. He submitted that the State of Himachal Pradesh cannot have any right dehors the Punjab Reoganisation Act, 1966 made under Article 3 of the Constitution. In support of this submission, he relied on the decisions of this Court in Babulal Parate v. State of Bombay and Anr. (supra) and Kuldip Nayar and Ors. v. Union of India and Ors. (2006) 7 SCC 1. 65. We find that under the provisions of Article 3 of the Constitution, Parliament has the power to form a new State by separation of territory from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in 1960-1961 when the Himachal Pradesh was a Union Territory, the States of Punjab and Rajasthan also decided to collaborate and undertake the execution of the Beas Project and the Government of India, Ministry of Irrigation Power, in fact, adopted a resolution on 10.02.1961 constituting the Beas Control Board for early execution of the Beas Project. Thus, at the time of the Bhakra-Nangal Project and the Beas Project were executed, Himachal Pradesh was not a full fledged State having the rights and powers under Articles 162 and 246(3) of the Constitution over its land and water under Entries 17 and 18 of List-II of the Seventh Schedule to the Constitution and it was the Union of India which had such rights and powers over the land and water in Himachal Pradesh by virtue of the provisions of Article 73 and Article 246(4) of the Constitution. 67. The State Reorganisation Act, 1966 and, in particular Section 78 thereof, does not also provide for grant of 12; free power to the State of Himachal Pradesh. It only provides for the rights and liabilities of Himachal Pradesh as a successor State of the Composite State of Punjab and what would be such rights and liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... projects in such projects, the partner State/States would be entitled to the supply of quantity of power proportionate to their investment, at bus bar rates, after supply of 12; free power to the Home State. The Centre's share of power would be distributed from such projects as per the formula for Central Sector Hydro Electric Projects, i.e. 15% to be reserved with the Centre as unallocated share and the balance to be distributed between the States of the region on the basis of two factors enumerated in (c) of para (1) above. With regards, Yours faithfully, Sd/- (K. Padmanabhaiah) Shri Kailash Chand Mahajan, Chairman, H.P. State Electricity Board, Vidyut Bhawan 69. It will be crystal clear from the aforesaid letter dated 22.07.1985 that the formula of supply of 12% free power from the energy generated by a power station to the Home State is applicable to Central Sector Hydro-Electric Projects and with effect from 12.02.1985 the Union Cabinet has made this applicable to Joint Ventures between the Union and one or more State Governments for implementation of Hydro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Amb and Una kanungo circles of Una tehsil of Hoshiarpur district; (d) the territories in Santokhgarh kanungo circle of Una tehsil of Hoshiarpur district specified in Part I of the Third Schedule; (e) the territories in Una tehsil of Hoshiarpur district specified in part II of the Third Schedule; and (f) the territories of Dhar Kalan Kanungo circle of Pathankot tehsil of Gurdaspur district specified in Part III of the Third Schedule, and thereupon the said territories shall cease to form part of the existing State of Punjab. (2) The territories referred to in Clause (b) of sub section (1) shall be included in, and form part of Simla district. (3) The territories referred to in clauses (c), and (d) and (e) of Sub-section (1) shall be included in and form part of Kangra district, and (i) the territories referred to in Clauses (c) and (d) shall form a separate tehsil known as Una tehsil in that district and in that tehsil the territories referred to in clause (d) shall form a seperate kanungo circle known as the Santokhgarh kanungo circle; and (ii) the territories referred to in clause (e) shall form part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly 2.5% of the power from Bhakra-Nangal and Beas Projects to the State of Himachal Pradesh as compared to the allocation of 54.5% to Punjab and 39.5; to Haryana and 3.5% to Chandigarh, is in violation of the right of the Plaintiff-State to equal treatment. He submitted that the Plaintiff has, therefore, sent by the letter dated 22.10.1969, produced and marked as Ext. P- 12, to the Joint Secretary, Government of India, Ministry of Home Affairs, New Delhi, claiming a share to the extent of 7.19% of the total benefits from the Bhakra-Nangal and Beas Projects on the basis of transfer of 7.19% of the population of the composite Punjab State to Himachal Pradesh along with the transferred territory, but the Central Government has not passed any order as yet granting the Plaintiff its share of 7.19% of the power generated from the Bhakra-Nangal and Beas Projects on the basis of the ratio of population transferred to the Plaintiff-State along with the transferred territory. 73. Mr. Mohan Jain, learned ASG appearing for the Defendant No. 1 and Mr. Shyam Diwan appearing for Defendant No. 2, on the other hand, submitted that since there was an agreement between the successor Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d part of the State of Himachal Pradesh. Similarly, we find on a reading of the record of decisions arrived at the inter-State Conference on development and utilization of the waters of the rivers Ravi and Beas held on 25.01.1955 marked as Ext. D-4/10 as well as the minutes of the 6th meeting of the Beas Central Board held on 13.12.1963 marked as Ex. D-4/15 that 85% of the capital cost of Unit-I and 32% of the capital cost of Unit- II of Beas Project were to be met by the composite State of Punjab as a whole including the transferred territory which formed part of the State of Himachal Pradesh. 76. The purposes of the Bhakra-Nangal and the Beas Projects, therefore, were to benefit the entire composite State of Punjab including the transferred territory which became part of Himachal Pradesh. If the ratio of the population of this transferred territory vis- -vis the composite State of Punjab was 7.19% and the transferred territory as detailed in Section 5 of the Punjab Reorganisation Act, 1966 extracted above was not small, allocation of only 7.19% of the share of power of the composite State of Punjab generated in the Bhakra- Nangal and Beas Projects was only fair and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Beas I (7.19% of 80%) 5.752% From the date of commencement of Production (iii) Beas II(7.19% of 41.5%) 2.984% From the date of commencement of Production From the above entitlement, what has been received by the Plaintiff in regard to Bhakra-Nangal and Beas I have to be deducted for the purpose of finding out the amount due to the Plaintiff-State from the States of Punjab and Haryana upto October, 2011. Issue No. 10 78. On the basis of its entitlement to 7.19% of the total power generated in the Bhakra-Nangal and Beas Projects, the Plaintiff has filed Statements I and III. These statements, however, are disputed by the Defendants in their written statements. The Defendant No. 1-Union of India will have to work out the details of the claim of the Plaintiff-State on the basis of the entitlements of the Plaintiff, Defendant No. 2 and Defendant No. 3 in the tables in Paragraph 77 above as well as all other rights and liabilities of the Plaintiff-State, the Defendant Nos. 2 and 3 in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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