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This dispute between the State of Himachal Pradesh (Plaintiff), on the one hand, and the Union of India (defendant No.1), State of Punjab (defendant No.2), State of Haryana (defendant No.3), State of Rajasthan (defendant No.4) and Union Territory 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.= Whether the State of Himachal Pradesh is entitled to an allocation of 7.19% in addition to 12% free power as claimed above, of the total power generated in Bhakra-Nangal & Beas Projects from the date of commissioning of the Projects or the appointed date (01.11.1966)? (Plaintiff) 10. Whether the plaintiff is entitled to a decree for a sum of Rs.2199.77 crores against the defendants jointly and severally, as compensation/reimbursement for their failure to supply to the plaintiff 12% and 7.19% shares (on account of distress caused/surrender of rights to generate power and on account of transfer of population to the plaintiff State respectively in the power generated in these projects upto the date of the filing of the present suit and such further sums as may be determined, as entitlement of the plaintiff for the period subsequent to the filing of the suit? (Plaintiff) 11. Whether the Plaintiff-State is entitled to the award of any interest on the amounts determined as its entitlement? (Plaintiff)” =It is hereby declared that the Plaintiff-State is entitled to 7.19% of the power of the composite State of Punjab from the Bhakra-Nangal Project with effect from 01.11.1966 and from Beas Project with effect from the dates of production in Unit I and Unit II. (iii) It is ordered that Defendant No.1 will work out the details of the claim of the Plaintiff-State on the basis of such entitlements of the Plaintiff, Defendant No.2 and Defendant No.3 in the tables in Paragraph 77 of this judgment as well as all other rights and liabilities of the Plaintiff-State, Defendant No.2 and Defendant No.3 in accordance with the provisions of the Punjab Reorganisation Act, 1966 and file a statement in this Court within six months from today stating the amounts due to the Plaintiff-State from Defendant Nos. 3 and 4. (iv) On the amount found to be due to the Plaintiff- State for the period from 01.11.1966 in the case of Bhakra-Nangal Project and the amount found due to the Plaintiff-State for the period from the dates of production in the case of Beas Project, the Plaintiff-State would be

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 Reportable

 IN THE SUPREME COURT OF INDIA

 ORIGINAL JURISDICTION

 ORIGINAL SUIT NO. 2 OF 1996

State of Himachal Pradesh ...... Plaintiff

 Versus

Union of India & Ors. ...... Respondents

 J U D G M E N T

A. K. PATNAIK, J.

 This dispute between the State of Himachal Pradesh 

(Plaintiff), on the one hand, and the Union of India 

(defendant No.1), State of Punjab (defendant No.2), State of 

Haryana (defendant No.3), State of Rajasthan (defendant 

No.4) and Union Territory 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.

 2

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 Constitution. In 1954, Bilaspur and 

Himachal Pradesh were united to form a new State of 

Himachal Pradesh under the Himachal Pradesh and 

 3

Bilaspur (New States) Act, 1954. The new State of Himachal 

Pradesh, however, continued to be a Part-C State until it 

became a Union Territory by the Constitution (7th 

Amendment) Act, 1956. In 1966, Parliament enacted the 

Punjab Reorganisation Act, 1966 which bifurcated the 

erstwhile State of Punjab to two States, Punjab and 

Haryana, and transferred some of the territories of the 

erstwhile State of Punjab to the Union Territory of Himachal 

Pradesh. With effect from 25.01.1971, this Union Territory 

of Himachal Pradesh became a full fledged State by the 

State of Himachal Pradesh Act, 1970. The new State of 

Himachal Pradesh thus constitutes (i) the erstwhile Part-C 

State of Bilaspur; (ii) the erstwhile Part-C State of Himachal 

Pradesh and (iii) the transferred territories of State of 

Punjab.

3. The construction of Bhakra dam has brought about lot 

of benefits to the country and in particular the defendants 

Nos. 2, 3, 4 and 5, but it has resulted in submergence of 

27869 (twenty seven thousand eight hundred and sixty 

nine) acres of land in the erstwhile Bilaspur State out of the 

total 41600 (forty one thousand six hundred) acres. 3/4th of 

 4

the reservoir of the Bhakra Dam is located in the erstwhile 

Part-C State of Bilaspur, now part of the State of Himachal 

Pradesh. Such submergence and reservoir of water over 

large areas of land in the State of Himachal Pradesh have 

meant loss of cultivated and uncultivated land to a total 

extent of 103425 acres, trees and forests, towns, 

Government buildings, community buildings, wells, springs 

and paths, gardens, parks, road, bridges, telegraph lines, 

ferries and these in their turn have resulted in 

unemployment, loss of agricultural and trading activity, loss 

of revenue, etc. These losses must be compensated by the 

defendants Nos. 2, 3, 4 and 5.

4. The river Beas originates in District Kullu of Himachal 

Pradesh and the Beas Project is a multi-purpose scheme 

comprising two units: Unit-I and Unit-II. Unit-I was 

commenced in 1960's when Himachal Pradesh was a Union 

Territory and was being administered by the Government of 

India and this project involved diversion of water from river 

Beas at Pandoh in District Mandi of Himachal Pradesh to 

river Satluj at Dehar. As a result of the diversion of water 

from river Beas at Pandoh, a reservoir comprising an area of 

 5

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 the population ratio 

distributed between the successor States/Union Territories. 

 6

As 7.19% of the total population of the composite State of 

Punjab was transferred along with the territories transferred 

to the plaintiff under the Punjab Reorganisation Act, 1966, 

the plaintiff was entitled to 7.19% of the total power 

generated in the Bhakra-Nangal and Beas Projects. This 

was also the recommendation of Shri K.S. Subrahmanyam, 

former Chairman of the Central Electrical Authority in his 

report dated 29.06.1979. Moreover, the Union of India has 

agreed in principle that the "mother State" which houses a 

hydro-electric power project by bearing the reservoir of 

water required for generation of hydro-electric power shall 

be entitled to at least 12% of total power generated from 

such project free of cost. Since plaintiff is the mother State 

in which the reservoirs of the two hydro-electric power 

projects, Bhakra-Nangal and Beas Projects were located, 

plaintiff was entitled to supply of 12% of the total power 

generated in the two projects free of cost.

6. The legal right of the plaintiff to its share of power 

generated in the Bhakra-Nangal and Beas Projects has been 

acknowledged by Section 78 of the Punjab Reorganisation 

Act, 1966 titled "Rights and Liabilities in regard to Bhakra-

 7

Nangal and Beas Projects". Sub-section 1 of Section 78 

states that notwithstanding anything contained in the 

Punjab Reorganisation Act, 1966 but subject to Sections 79 

and 80 thereof, all rights and liabilities of the existing State 

of Punjab in relation to Bhakra-Nangal and Beas Projects 

shall on the appointed day (01.11.1966) 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 successor 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 project. Accordingly, 

the plaintiff filed its claims with respect to the Bhakra-

Nangal and Beas Projects by letter dated 22.10.1969 before 

the Central Government and made several subsequent 

representations thereafter to the Central Government from 

time to time but the Central Government for one reason or 

the other did not take steps to determine finally the rights of 

the plaintiff in respect of the Bhakra-Nangal and Beas 

Projects.

 8

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 Unit I (Dehar) Unit II (Pong)

 State/U.T

Rajasthan 15.22% 20% 58.50%

The remaining 84.78% 80% 41.50%

is shared as under:

Punjab 54.50% 60% 60%

Haryana 39.50% 40% 40%

H.P. 2.5% 15 MW Nil

U.T. 3.5% Nil Nil

Chandigarh

8. The cause of action for filing the suit arose when the 

Central Government ultimately failed to determine the 

lawful claim of the plaintiff and intimated its decision in this 

regard by letter dated 11.04.1994 and when a joint meeting 

of all the parties under the aegis of the Principal Secretary 

of the Prime Minister held on 30.08.1995 failed to arrive at 

any agreement with tangible results. For failure on the part 

 9

of the Central Government to determine the share of the 

plaintiff in the power generated in the two projects, the 

plaintiff has claimed compensation from the Central 

Government also.

9. The plaintiff has accordingly claimed the following 

reliefs:

 (a) A decree declaring that the plaintiff State 

 is entitled to a share of 12% of the net power 

 generated (total power available after 

 deduction of auxiliary consumption and 

 transmission losses) in Bhakra-Nangal and 

 Beas Projects free of cost from the date of 

 commissioning of the projects and further a 

 decree declaring that the defendants are 

 jointly and severally liable to compensate and 

 reimburse the money value of the power to 

 the plaintiff State as per statements II and IV 

 annexed to the plaint;

 (b) A decree declaring that the plaintiff State 

 is entitled to 7.19% of the power generated in 

 the Bhakra-Nangal and Beas Projects from 

 the appointed day (01.11.1966) or from the 

 date of commissioning of the projects, 

 whichever is later, out of the share of the 

 then composite State of Punjab on account of 

 the transfer of population to the plaintiff 

 State under the Punjab Reorganisation Act, 

 1966 and a further decree declaring that the 

 defendants are jointly and severally liable to 

 compensate or reimburse the plaintiff State 

 for the difference between 7.19% of its share 

 out of the share of the then composite State 

 of Punjab and the power received by the 

 plaintiff State under the ad hoc and interim 

 10

 arrangement from the two projects with effect 

 from the appointed day or the commissioning 

 of the projects, whichever is later as per 

 statements I and III annexed to the plaint;

 (c) A decree for a sum of Rs.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 of 

 11

this Bhakra-Nangal Project was to generate hydro-electric 

power and to improve irrigation facilities for their respective 

States and also agreed to fund and derive benefits from the 

Bhakra-Nangal Project in the ratio of 84.78% and 15.22% 

respectively. Accordingly, the share of the power generated 

in the Bhakra-Nangal Project of the State of Rajasthan was 

15.22% and the share of the power of composite State of 

Punjab was 84.78%. After the reorganisation of Punjab in 

1966, the representatives of the successor States/Union 

Territories, namely Punjab, Haryana, Chandigarh and 

Himachal Pradesh agreed at a meeting held on 17.04.1967 

in presence of the Secretary, Ministry of Irrigation and 

Power, Government of India that the share of power of the 

four successor States/Union Territories out of the share of 

power of the composite State of Punjab from the two 

projects would be as follows:

 Punjab - 54.5%

 Haryana - 39.5%

 Chandigarh - 3.5%

 Himachal Pradesh - 2.5%

This agreement was incorporated in the minutes of the 

meeting held on 17.04.1967 which were circulated by the 

 12

letter dated 27.04.1967 of the defendant No.1 to all 

concerned. This agreement between the successor 

States/Union Territories dated 17.04.1967 constitutes a 

statutory agreement in terms of Section 78(1) of the Punjab 

Reorganisation Act, 1966 and will hold the field unless 

replaced by a consensual agreement between the successor 

States/Union Territories.

12. The Beas Project was also funded by the composite 

State of Punjab and the State of Rajasthan as would be 

clear from the notification dated 17.06.1970 of the Ministry 

of Irrigation and Power, Government of India and the 

benefits of power from the Beas Project were allocated 

between the composite State of Punjab and State of 

Rajasthan in proportion to the ratio of the costs borne by 

the two States. After the reorganisation of composite State 

of Punjab, the Government of India, Ministry of Energy, 

Department of Power by D.O. Letter dated 30.03.1978 has 

allowed supply of 15MW power to Himachal Pradesh from 

the Dehar Power Plant of the Beas Project on ad hoc basis.

 13

13. The plaintiff lodged its claim 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.

 14

15. Under Section 78 of the Punjab Reorganisation Act, 

1966, the claims of the successor States/Union Territories 

to the power generated in the Bhakra-Nangal and Beas 

Projects can be settled either by agreement between the 

successor States/Union Territories or by the decision of the 

Central Government and not by the court. The dispute 

raised by the plaintiff regarding distribution of electricity 

from hydro projects between the plaintiff and defendants 

No. 2, 3, 4 and 5 is an extremely sensitive issue and 

experience of controversy surrounding the Cauvery dispute 

between Tamil Nadu, Karnataka, Pondicherry and Kerala 

clearly demonstrates that there are grave risks which may 

give rise to agitation and eventual politicization with regard 

to river water system, irrigation and electricity and this is an 

important aspect which has to be borne in the background 

while dealing with the present dispute. The suit is not 

maintainable under Article 131 of the Constitution. 

Written statement by Defendant No. 2 (State of Punjab)

16. The suit as filed by the plaintiff is not maintainable 

under Article 131 of the Constitution and the plaintiff has 

no cause of action to file the suit. In terms of Section 78(1) 

 15

of the Punjab Reorganisation Act, 1966, the representatives 

of the successor States/Union Territories of the composite 

State of Punjab have at a meeting held on 17.04.1967 

agreed to share the power of the composite State of Punjab 

from the two projects at the following percentages:

 Punjab - 54.5%

 Haryana - 39.5%

 Chandigarh - 3.5%

 Himachal Pradesh - 2.5%

This agreement dated 17.04.1967 has been entered into 

within the two years period specified in Section 78(1) of the 

Act and, therefore, the Central Government has no power to 

intervene in the matter. 

 17. The financial liabilities of Bhakra and Beas 

 Projects are being shared by the States of Punjab 

 and Haryana. The Central Government had taken 

 a decision under Section 54(3) of the Punjab 

 Reorganisation Act, 1966 that all liabilities towards 

 the loans incurred prior to the Punjab 

 Reorganisation Act, 1966 on the two projects are to 

 be borne by the States of Punjab and Haryana. 

 16

 The decision of the Central Government in this 

 regard has been conveyed 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-

 17

 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 Central Sector 

 Hydro-Electric Power Projects in respect of which 

 sanction for investment had been granted prior to 

 12.02.1985 and sanction for investment in Bhakra 

 and Beas Projects was much prior to 12.02.1985.

20. Population alone cannot be considered as the 

 basis for sharing of power because the connected 

 supply to the consumers in the successors 

 States/Union Territories of the composite State of 

 Punjab has to be maintained. Any increase, 

 therefore, in the quota of power to Himachal 

 Pradesh at the cost of the State of Punjab would 

 mean further hardship to the consumers in the 

 State of Punjab, which is already facing a serious 

 power crisis.

 18

 21. Punjab being a down-stream riparian State of the 

 rivers Satluj and Beas is entitled to utilize the 

 water flowing from the two rivers and the plaintiff 

 was free to utilize the up-stream water in the two 

 rivers in the manner it liked. But since it did not 

 have the resources to do so, the States of Punjab, 

 Haryana and Rajasthan have invested in the 

 construction of the two projects. By the two 

 projects, Himachal Pradesh has not lost anything 

 in the process, except that the land located in the 

 Himachal Pradesh has been acquired for the 

 projects and more than adequate compensation 

 has been paid to the owners of the land and 

 reasonable arrangements have also been made for 

 their resettlement. Moreover, the creation of big 

 reservoir has provided Himachal Pradesh the 

 facilities of fish, farming and increase in tourism 

 potential. 

Written statement by Defendant No. 3 (State of Haryana)

22. The suit is barred because of the provisions of 

Section 78 of the Punjab Reorganisation Act, 1966, under 

 19

which the right to receive and utilize power from the 

Bhakra-Nangal and Beas Projects can only be determined 

by the Central Government in case the successor 

States/Union Territories of the composite State of Punjab 

are unable to reach an agreement.

23. An agreement has in fact been arrived at by the 

successor States/Union Territories of the composite State of 

Punjab on 17.04.1967 at a meeting taken by the Secretary, 

Ministry of Irrigation and Power, Government of India, to 

share the power generated by the Bhakra-Nangal and Beas 

Projects at the following percentages and of the share of 

power of the composite Punjab State:

 Punjab - 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 

 20

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 Dam was conceived with the consent of 

the Raja of Bilaspur and all obligations towards the 

erstwhile State of Bilaspur were fulfilled by the project 

authorities. No legal agreement between the Raja of 

Bilaspur and the Province of Punjab in respect of Bhakra-

Nangal Project for royalty/free power exists.

26. There is no provision in the Punjab Reorganisation 

Act, 1966 providing for sharing of power generated in the 

 21

Bhakra-Nangal and Beas Projects on the basis of the 

transferred population ratio and therefore the claim of the 

plaintiff to 7.19% of the total power generated in the two 

projects is not legally tenable. The Bhakra-Nangal and Beas 

Projects were constructed pursuant to an agreement 

between the State of Punjab and the State of Rajasthan and 

the State of Himachal Pradesh which came to existence 

much later was entitled to power as per the provisions 

incorporated in the Punjab Reorganisation Act, 1966.

27. The Department of Power, Government of India, in its 

D.O. Letter dated 30.03.1978 to the Chairman, B.B.M.B. 

conveyed the decision of Government of India that the 

plaintiff be supplied 15 M.W. of power generated from Beas 

Power Plant and this supply was to be on ad hoc basis, at 

Bus Bar rates, pending final decision about its share of 

power which was to be examined separately. Subsequently, 

by letter dated 16.08.1983 of the Department of Power, 

Government of India, the Chairman, B.B.M.B. has been 

informed that the quantum of benefits from Bhakra-Nangal 

and Beas Projects presently allocated to Himachal Pradesh 

will remain unaltered until a final decision is taken.

 22

Written statement of the Defendant No.4 (State of 

Rajasthan)

28. Under an agreement made on 15.08.1948 between the 

then Governor General of India and the Raja of Bilaspur, the 

administration of Bilaspur State was transferred to the 

Dominion Government of India and in lieu thereof the Raja 

of Bilaspur received a compensation of Rs.70,000/- 

annually as privy purse free of tax. By a notification dated 

20.07.1949 the Governor General of India ordered that on 

and from 01.08.1949 the territory of State of Bilaspur, 

which had merged in the Dominion of India, would be 

administered as if it was Chief Commissioner's Province. 

On the commencement of the Constitution of India, the 

territory of Chief Commissioner's Province became a Part-C 

State 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 

 23

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 predecessor State or Union Territory of the Plaintiff 

never raised the grievances now put forth by the Plaintiff 

and the grievances now put forth in the plaint are only an 

after-thought and are imaginary. In fact, all persons 

affected by the construction of the Bhakra-Nangal Project 

have been compensated, a new township of Bilaspur has 

been constructed, proper compensation has been paid for 

acquisition of land and the beneficiary States have even 

 24

provided for the rehabilitation of the oustees of the Bhakra-

Nangal Project in Sirsa and Hissar Districts and 

rehabilitation of oustees of the Beas Project in Indira 

Gandhi Pariyojana. 

31. The share of the State of Rajasthan in the power 

generated in the Bhakra-Nangal Project is 15.22% and Unit-

I of Beas Project is 20% and Unit-II of Beas Project is 

58.50% and these allocations of share are not interim or ad 

hoc but are final. The one-man Committee headed by Shri 

K. S. Subrahmanyam was not constituted after consultation 

with the State of Rajasthan and hence the recommendation 

of this Committee has no relevance so far as the State of 

Rajasthan is concerned. In any case, the report of Shri K. 

S. Subrahmanyam is not a legally admissible document. 

The claim of 12% of the total power generated in Bhakra-

Nangal and Beas Projects on the basis of the Plaintiff being 

the "Mother State" is baseless. Both the projects, Bhakra-

Nangal and Beas Projects, are the State Projects conceived 

planned, constructed, developed and operated and are being 

maintained by the participating States, namely the State of 

Rajasthan and the composite State of Punjab, and these two 

 25

States as partners of the projects have been sharing power 

from the two projects on the basis of agreements executed 

between them.

32. The dispute raised in the suit relates to the share of 

water and generation of power from the use of water in 

inter-state rivers and this Court has no jurisdiction under 

Article 131 of the Constitution to decide the dispute.

33. This Court has no jurisdiction over the dispute which 

arises out of an agreement entered into or executed before 

the commencement of the Constitution by a Ruler of an 

Indian State by virtue of the bar under Article 363 of the 

Constitution. 

Written statement of the Defendant No.5 (Union 

Territory of Chandigarh)

34. The suit is hopelessly barred by time inasmuch 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 

 26

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 per this agreement the 

share of power of Himachal Pradesh from the Bhakra-

Nangal and Beas Projects is 2.5% of the total share of the 

composite State of Punjab and this agreement is binding on 

all parties including the plaintiff and the plaintiff is 

 27

estopped from seeking any relief including damages dehors 

the agreement. 

37. In relation to the Beas Project, the Central Government 

has also allowed a supply of 15 MW power to Himachal 

Pradesh from Dehar Power Plant on ad hoc basis by letter 

dated 30.03.1978 of the Ministry of Energy, Department of 

Power, Government of India and this arrangement has been 

ratified by the Bhakra Beas Management Board at its 76th 

meeting held on 28.09.1978.

38. If there is no agreement between the successor 

States/Union Territories of the composite State of Punjab 

and if there is no final order of the Central Government 

determining the rights and liabilities of the successor 

States/Union Territories of the composite State of Punjab, 

the only legal proceeding which can be initiated is for 

directing the Central Government to pass a statutory order 

under Section 78(1) of the Punjab Reorganisation Act, 1966 

and there is no scope for any legal proceedings for recovery 

of damages towards the share of electricity of the Plaintiff.

Issues:

 28

39. After considering the pleadings of the parties, on 

08.03.1999 this Court framed a large number of issues. 

Thereafter, the plaintiff examined three witnesses, namely, 

Shri A.K. Goswami, the Chief Secretary of the State of 

Himachal Pradesh, Dr. Y.K. Murthy, Ex-Chief Engineer-

cum-Secretary (MPP & Power) to the Government of 

Himachal Pradesh, and Shri Prabodh Saxena, Deputy 

Commissioner to the Government of Himachal Pradesh. 

The Defendant No.2 examined one witness, namely, Shri 

Romesh Chandra Bansal, Consultant of Punjab State 

Electricity Board on Inter State Disputes) and Defendant 

No.3 examined one witness, namely, Shri Jia Lal Jain, Chief 

Accounts Officer in Haryana State Electricity Board. The 

parties have also produced a large number of documents, 

which have been marked as Exhibits.

40. At the hearing of the suit, the learned counsel for the 

parties did not press all the issues framed by this Court on 

08.03.1999 and confined their arguments to some of the 

issues. These issues are rearranged and renumbered as 

follows: 

 29

"01. 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? (Defendant Nos. 1, 2 & 3)

08. Whether the Plaintiff-State is entitled to 

12% of the net power generated in Bhakra-

Nangal & Beas Projects free of cost from the 

date of commissioning of the projects? 

(Plaintiff)

 30

 09. Whether the State of Himachal Pradesh 

 is entitled to an allocation of 7.19% in 

 addition to 12% free power as claimed 

 above, of the total power generated in 

 Bhakra-Nangal & Beas Projects from the 

 date of commissioning of the Projects or the 

 appointed date (01.11.1966)? (Plaintiff) 

 10. Whether the plaintiff is entitled to a 

 decree for a sum of Rs.2199.77 crores 

 against the defendants jointly and severally, 

 as compensation/reimbursement for their 

 failure to supply to the plaintiff 12% and 

 7.19% shares (on account of distress 

 caused/surrender of rights to generate 

 power and on account of transfer of 

 population to the plaintiff State respectively 

 in the power generated in these projects 

 upto the date of the filing of the present suit 

 and such further sums as may be 

 determined, as entitlement of the plaintiff 

 for the period subsequent to the filing of the 

 suit? (Plaintiff) 

 11. Whether the Plaintiff-State is entitled to 

 the award of any interest on the amounts 

 determined as its entitlement? (Plaintiff)" 

We may now deal with each of these issues separately.

Issue No.1

41. Mr. Mohan Jain, learned Additional Solicitor General 

appearing for Defendant Nos. 1 and 5, submitted that the 

Bhakra-Nangal Project was completed in 1963 and the Beas 

Project was completed in 1977, whereas the suit has been 

filed in the year 1996 and, therefore, the suit is belated and 

 31

barred by limitation. Mr. C.S. Vaidyanathan, learned senior 

counsel appearing for Defendant No.4, cited the decision in 

U.P. Jal Nigam & Anr. v. Jaswant Singh & Anr. [(2006) 11 

SCC 464] in which this Court has held that a party would 

not be entitled to relief if he has not been vigilant in 

invoking the protection of his rights and has acquiesced 

with the changed situation. He submitted that in the 

present case, the Plaintiff-State has acquiesced in the 

Bhakra-Nangal and Beas Projects and the sharing of power 

from the two projects by Plaintiff and the Defendant Nos. 2 

and 5 in certain proportions since several decades and has 

filed the suit only in the year 1996.

42. We are unable to accept the 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 

 32

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 adhoc 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 of Bilaspur with the Dominion of India, the Plaintiff 

could still have any cause of action to file the present suit. 

A copy of the Bilaspur Merger Agreement dated 15.08.1948 

has been produced on behalf of Defendant No.4 and marked 

as Ext. D-4/1-A. Article 1 of the Bilaspur Merger 

Agreement dated 15.08.1948 reads as follows:

 "The Raja of Bilaspur hereby cedes to the 

 Dominion Government full and exclusive 

 authority, jurisdiction and powers for and in 

 relation to the governance of the State and agrees 

 to transfer the administration of the State to the 

 33

 Dominion Government on twelfth day of October, 

 1948 (hereinafter referred to as `the said day').

 As from the said day the Dominion Government 

 will be competent to exercise the said powers, 

 authority and jurisdiction in such manner and 

 through such agency as it may think fit." 

It is thus clear that by the Bilaspur Merger Agreement dated 

15.08.1948 the Raja of Bilaspur ceded to the Dominion 

Government full and exclusive authority, jurisdiction and 

powers for and in relation to the governance of the State 

and agreed to transfer the administration of the State to the 

Dominion Government on 12.10.1948. Thereafter, the 

Government of India, Ministry of Law, issued a notification 

dated 20.07.1949 (Ext. D-4/2-A) in exercise of its powers 

under Section 290-A of the Government of India Act, 1935 

making the States Merger (Chief Commissioners Provinces) 

Order, 1949, which came into force from 01.08.1949. 

Under this States Merger (Chief Commissioners Provinces) 

Order, 1949, Bilaspur was to be administered in all respects 

as if it was a Chief Commissioner's Province. Under the 

Constitution of India also initially Bilaspur continued to be 

administered as the Chief Commissioner's Province and was 

included in the First Schedule of the Constitution as a Part-

 34

C State. Under Article 294 (b) all rights, liabilities and 

obligations of the Government of the Dominion of India, 

whether arising out of any contract or otherwise, became 

the rights, liabilities and obligations of the Government of 

India. These provisions of the Bilaspur Merger Agreement 

dated 15.08.1948 (Ext.D-4/1-A), the States Merger (Chief 

Commissioners Provinces) Order, 1949, the First Schedule 

of the Constitution and Article 294 (b) of the Constitution 

make it clear that Bilaspur became the part of the 

Dominion of India and 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 

 35

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

45. Issue No. 3 relates to the bar of the suit under Article 

363 of the Constitution. Mr. Vaidyanathan, learned counsel 

for the Defendant No.4 submitted that the suit was barred 

under the proviso to Article 131 of the Constitution and 

Article 363 of the Constitution. In support of this 

contention, he relied on State of Seraikella and Others v. 

Union of India and Another [AIR 1951 SC 253]. Mr. 

Nageshwar Rao, learned counsel for Defendant No.3 also 

raised this contention and relied on State of Orissa v. State 

of A.P. [(2006) 9 SCC 591].

 36

46. Articles 131 and 363 of the Constitution are quoted 

hereinbelow:

 "131. Original Jurisdiction of the Supreme 

 Court - Subject to the provisions of this 

 Constitution, the Supreme Court shall, to the 

 exclusion of any other court, have original 

 jurisdiction in any dispute--

 (a) between the Government of India and one or 

 more States; or

 (b) between the Government of India and any 

 State or States on one side and one or more other 

 States on the other; or

 (c) between two or more States, 

 if and in so far as the dispute involves any 

 question (whether of law or fact) on which the 

 existence or extent of a legal right depends:

 [Provided that the said jurisdiction 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 this Constitution, continues in 

 operation after such commencement, or which 

 provides that the said jurisdiction shall not 

 extend to such a dispute.]

 363. Bar to interference by courts in 

 disputes arising out of certain treaties, 

 agreements, etc. - 

 (1) Notwithstanding anything in this Constitution 

 but subject to the provisions of article 143, 

 neither the Supreme Court nor any other court 

 shall have jurisdiction in any dispute arising out 

 of any provision of a treaty, agreement, covenant, 

 engagement, sanad or other similar instrument 

 37

 which was entered into or executed before the 

 commencement of this Constitution by any Ruler 

 of an Indian State and to which the Government 

 of the Dominion of India or any of its predecessor 

 Governments was a party and which has or has 

 been continued in operation after such 

 commencement, or in any dispute in respect of 

 any right accruing under 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 

 38

dispute. Hence, there is a clear bar for this Court to 

exercise jurisdiction under Article 131 of the Constitution to 

decide 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. Clause (1) of Article 363 of the 

Constitution quoted above also states that notwithstanding 

anything in the Constitution, the Supreme Court shall have 

no jurisdiction in any dispute arising out of any provision of 

a treaty, agreement, covenant, engagement, sanad or other 

similar instrument which were entered into or executed 

before the commencement of the Constitution by any Ruler 

of an Indian State or to which the Government of the 

Dominion of India or any of its predecessor Governments 

was a party and which has or has been continued in 

operation after such commencement, or in any dispute in 

respect of any right accruing under 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. 

 39

These being the clear constitutional provisions, obviously 

this Court will have no jurisdiction under Article 131 of the 

Constitution to decide any dispute arising out of any 

agreement or covenant between the Raja of Bilaspur and the 

Government of the Dominion of India. The only agreement 

proved to have been executed by the Raja of Bilaspur and 

the Government of the Dominion of India before the 

commencement of the Constitution is the Bilaspur Merger 

Agreement (Ext. D-4/1A) and on a close examination of the 

provisions of the Bilaspur Merger Agreement dated 

15.08.1948, we find that there are no provisions therein 

which have any relevance to the claim of the Plaintiff to the 

share of the Plaintiff to the power generated in the Bhakra-

Nangal and Beas Projects. The draft agreement dated 

07.07.1948, however, has provisions in clause 13 for 

allocation of power to the Bilaspur State, but this draft 

agreement is not proved to have been executed on behalf of 

the parties thereto and cannot constitute a basis for 

allocation of power to the Plaintiff-State. However, we have 

already held that the claim of the Plaintiff-State is based 

also on the Punjab Reorganisation Act, 1966 and the 

 40

provisions of the Constitution and such claim is not barred 

under Article 363 of the Constitution. This issue is 

answered accordingly. 

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 Others [(2000) 9 SCC 572], State of 

Haryana v. State of Punjab and Another [(2002) 2 SCC 507] 

and State of Orissa v. Government of India and Another 

[(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 

 41

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) of Article 262 of the Constitution provides 

that notwithstanding anything in the Constitution, 

Parliament may by law provide that neither the Supreme 

Court nor any other court shall exercise jurisdiction in 

respect of any such dispute or complaint relating to waters 

of inter state rivers or river valleys. Parliament has in fact 

made the Inter-State Water Disputes Act, 1956 and has also 

provided in Section 11 of this Act that neither the Supreme 

Court nor any other court shall have jurisdiction or exercise 

jurisdiction in respect of any water dispute which may be 

referred to a Tribunal under the Act. In State of Karnataka 

v. State of A.P. and Others (supra) a Constitution Bench of 

this Court held in Para 24 at pages 604, 605 and 606 that 

when a contention is raised that a suit filed under Article 

131 of the Constitution is barred under Article 262(2) of the 

Constitution read with Section 11 of the Inter-State Water 

Disputes Act, 1956, what is necessary to be found out is 

whether the assertions made in the plaint and the relief 

 42

sought for, by any stretch of imagination, can be held to be 

a water dispute so as to oust the jurisdiction of this Court 

under Article 131 of the Constitution and on examining the 

assertions made in the plaint and the relief sought for by 

the Plaintiff-State, the Constitution Bench took the view 

that the suit in that case could not be held to be barred 

under Article 262 of the Constitution read with Section 11 

of the Inter-State Water Disputes Act, 1956. This decision in 

State of Karnataka v. State of Andhra Pradesh was followed 

by this Court in State of Haryana v. State of Punjab and 

Another (supra) and it was held that the question of 

maintainability of the suit has to be decided upon the 

assertions made by the Plaintiffs and the relief sought for, 

and taking the totality of the same and not by spinning up 

one paragraph of the plaint and then deciding the matter. 

Applying this test to the present case, we find on a reading 

of the assertions made in the entire plaint as well as the 

reliefs claimed therein by the Plaintiff that the dispute does 

not relate to a dispute in relation to inter state river water or 

the use thereof, and actually relates to sharing of power 

generated in the Bhakra-Nangal and the Beas Projects and 

 43

such a dispute was not barred under clause (2) of Article 

262 of the Constitution read with Section 11 of the Inter-

State 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. 

 44

In support of this contention, Mr. Rao and Mr. 

Vaidyanathan relied on the decision of this Court in State of 

Haryana v. State of Punjab and Another [(2004) 12 SCC 

673].

51. At this stage, when oral and documentary evidence 

have already been led by the parties and arguments have 

been made by the learned counsel for the parties and when 

we are going to finally decide the suit, it is not necessary for 

us to consider whether the plaint discloses a cause of action 

and is liable to be rejected under Order XXIII Rule 6(a) of 

the Supreme Court Rules, 1966. We have to however 

consider whether on the pleadings of the parties and on the 

evidence adduced by the parties, the Plaintiff-State has 

established a legal right to the utilization of power from the 

Bhakra-Nangal and Beas Projects. After examining the 

pleadings of the parties and the evidence adduced on behalf 

of the parties, we find that under the Bilaspur Merger 

Agreement dated 15.08.1948, the State of Bilaspur merged 

with the Dominion of India and was administered as the 

Chief Commissioner's Province and was included as a Part-

C State is the First Schedule of the Constitution. In 1954 

 45

Bilaspur and Himachal Pradesh however, were united to 

form a new State of Himachal Pradesh under the Himachal 

Pradesh and Bilaspur (New States) Act, 1954. This new 

State of Himachal Pradesh continued to be a Part-C State 

until it became a Union Territory by the Constitution (7th 

Amendment) Act, 1956. It is when Himachal Pradesh was 

a Union Territory that the State of Punjab and the State of 

Rajasthan entered into an agreement on 13.01.1959 (Ext.D-

1/3) to collaborate in the construction of a Dam across the 

river Sutlej at Bhakra and other ancillary works executed 

under the Bhakra-Nangal Project for the improvement of 

irrigation and generation of Hydro-electric power and as per 

the terms and conditions of this agreement, the power 

generated in Bhakra-Nangal Project was to be shared 

between Punjab and Rajasthan in the ratio of 84.78% and 

15.22% respectively. The plaintiff's case in the plaint is that 

the construction of the Bhakra Dam across the river Satluj 

has resulted in submergence of large areas of Himachal 

Pradesh and its rights have been affected by the 

construction of the Bhakra Dam. According to Mr. Ganguli, 

learned counsel appearing for the Plaintiff, the legal rights of 

 46

the plaintiff which have been affected by the construction of 

the Bhakra-Nangal Project are the (a) natural right to the 

beneficial use of the water; (b) rights under the 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. 

 47

As has been held by this Court in Babulal Parate v. State of 

Bombay and another (AIR 1960 SC 51) cited by Mr. Shyam 

Diwan, learned counsel for the Defendant No.2: 

 "None of the constituent units of the Indian 

 Union was sovereign and independent in the 

 sense the American colonies or the Swiss 

 Cantons were before they formed their federal 

 unions. The Constituent Assembly of India, 

 deriving its power from the sovereign people, 

 was unfettered by any previous commitment 

 in evolving a constitutional pattern suitable 

 to the genius and requirements of the Indian 

 people as a whole." (At Page 55 of AIR 1960)

In 1959, as we have noticed, Himachal Pradesh which 

included the erstwhile State of Bilaspur was a Union 

Territory and not a State. The executive and the legislative 

power over water and land in Entries 17 and 18 of List-II of 

the Seventh Schedule to the Constitution vested in 1959 in 

the Union of India (Defendant No.1). This will be clear from 

Article 73(1) of the Constitution, which provides that subject 

to the provisions of the Constitution, the executive power of 

the Union shall extend to the matters with respect to which 

Parliament has power to make laws and from Article 246(4) 

of the Constitution which states that Parliament has power 

 48

to make laws with respect to any matter for any part of the 

territory of India not included in a State notwithstanding 

that such matter is a matter enumerated in the State List. 

In other words, in 1959 when the agreement was made 

between the States of Punjab and Rajasthan to construct 

the Bhakra Dam across the river Satluj which would have 

the effect of submerging large areas within Himachal 

Pradesh, it is the Union of India which had the right over 

the water and land in Himachal Pradesh and if the Union of 

India has, in exercise of its constitutional powers acquiesced 

in the construction of the Dam at Bhakra over river Satluj, 

the Plaintiff-State can have no cause of action to make a 

claim to power from the Bhakra-Nangal Project on the basis 

of submergence of large areas of Himachal Pradesh on 

account of the construction of the Bhakra Dam.

53. We further find that in 1960-1961 when Himachal 

Pradesh was a Union Territory, the State of Punjab and the 

State of Rajasthan decided to collaborate and undertake the 

execution of Beas Project including all connected works in 

Punjab, Rajasthan and Himachal Pradesh. The Government 

of India, Ministry of Irrigation and Power, also adopted a 

 49

resolution on 10.02.1961 (Ext.D-1/7) constituting the Beas 

Control Board 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 

 50

the constitutional right to equal treatment vis-`-vis the 

other successor States of the composite State of Punjab and 

the Plaintiff has cause of action in the suit to make a claim 

to the utilization of power from the Bhakra-Nangal and Beas 

Projects on the basis of such statutory right and 

constitutional right and we shall advert to the statutory 

right and the constitutional right of the plaintiff when we 

deal with the remaining issues. On a perusal of the Punjab 

Reorganisation Act, 1966, however, we find that the 

provisions of this Act deal with the rights of the successor 

States of the composite State of Punjab and it is by 

reference to the provisions of the Punjab Reorganisation Act, 

1966 that the Plaintiff-State has claimed equal rights to 

power from the Bhakra-Nangal and Beas Projects. The 

Defendant No.4 (State of Rajasthan) was never a part of 

composite State of Punjab and its rights and liabilities 

including its rights to utilization of power in the Bhakra-

Nangal and Beas Projects are not affected by the Punjab 

Reorganisation Act, 1966. Hence, on the basis of the 

statutory right and the constitutional right of the plaintiff to 

utilization of power from the Bhakra-Nangal and Beas 

 51

Projects from out of the share of composite State of Punjab 

prior to the Punjab Reorganisation Act, 1966, the Plaintiff-

State has no cause of action to file a suit against the State 

of Rajasthan. In other words, since the Plaintiff-State has 

no legal right to claim a share of power from the Bhakra-

Nangal and Beas Projects from out of the share of power of 

the State of Rajasthan, the Plaintiff had no cause of action 

to file the suit against the State of Rajasthan (Defendant 

No.4), but since the Plaintiff-State has a legal right to 

utilization of power out of the total share of power of the 

composite State of Punjab from the Bhakra-Nangal and 

Beas Projects as a successor State, the Plaintiff has cause of 

action to file the suit and to maintain the suit as against 

Defendant Nos. 2, 3 and 5. Moreover, as under Section 

78(1) of the Punjab Reorganisation Act, 1966 the Central 

Government was required to determine by an order the 

rights of the plaintiff to utilization of power from the 

Bhakra-Nangal and Beas Projects and the Central 

Government has not done so, the Plaintiff-State has cause 

of action to file the suit against the Defendant No.1. Issue 

No.5 is answered accordingly. 

 52

Issue Nos. 6

55. For deciding issue No. 6, a reference to Section 78 of 

the 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, provide also for the rights and 

 liabilities of the successor States in relation to 

 such extension or further development.

 (3) The rights and liabilities referred to in sub-

 sections (1) and (2) shall include-

 53

 (a) the rights to receive and to utilise 

 the water available for distribution as a 

 result of the projects, and

 (b) the rights to receive and to utilise 

 the power generated as a result of the 

 projects, but shall not include the 

 rights and liabilities under any 

 contract entered into before the 

 appointed day by the Government of 

 the existing State of Punjab with any 

 person or authority other than 

 Government.

(4) In this section and in sections 79 and 80-

(A) "Beas Project" means the works which are 

either under construction or are to be 

constructed as components of the Beas-Sutlej 

Link Project (Unit I) and Pong Dam Project on 

the Beas river (Unit II) including-

(i) Beas-Sutlej Link Project (Unit I) comprising-

 (a)Pandoh Dam and works 

 appurtenant thereto.

 (b) Pandoh-Baggi Tunnel,

 (c) Sundernagar-Hydel Channel,

 (d) Sundernagar-Sutlej Tunnel,

 (e) By-pass Tunnel,

 (f) four generating units each of 165 

 M.W. capacity at Dehar Power House 

 on the right side of Sutlej river,

 (g) fifth generating unit of 120 M.W. 

 capacity at Bhakra Right Bank Power 

 House,

 54

 (h) transmission lines,

 (i) Balancing Reservoir;

 (ii) Pong Dam Project (Unit II) 

 comprising-

 (a) Pong Dam and works appurtenant 

 thereto,

 (b) Outlet Works,

 (c) Penstock Tunnels,

 (d) Power plant with four generating 

 units of 60 M.W. each;

(iii) such other works as are ancillary to the 

works aforesaid and are of common interest to 

more than one State;

(B) "Bhakra-Nangal Project" means-

 (i) Bhakra Dam, Reservoir and works 

 appurtenant thereto;

 (ii) Nangal Dam and Nangal-Hydel 

 Channel;

 (iii) Bhakra Main Line and canal 

 system;

 (iv) Bhakra Left Bank Power House, 

 Ganguwal Power House and Kotla 

 Power House, switchyards, sub-

 stations and transmission lines;

 (v) Bhakra Right Bank Power House 

 with four units of 120 M.W. each."

 55

56. Mr. Shyam Diwan, leaned counsel appearing for 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 Federal 

Court 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 

 56

the Bhakra-Nangal and Beas Projects except what is agreed 

upon by the successor States or determined by the Central 

Government and hence the right of the Plaintiff, if any, is 

not enforceable in Court. He finally submitted that even if 

this Court holds that the Plaintiff has a legal right to a share 

of power generated in the Bhakra-Nangal and Beas Projects, 

this Court can only direct the Central Government to 

determine the share of Himachal Pradesh and cannot itself 

determine the share of Himachal Pradesh. Mr. Mohan Jain, 

learned Additional Solicitor General, learned counsel 

appearing for Defendant No.1, also made similar 

submissions. 

57. We are not in a position to accept the submissions of 

learned counsel appearing on behalf of the Defendant Nos. 1 

and 2 that this Court has no jurisdiction under Article 131 

of the Constitution to determine the share of the Plaintiff to 

the power generated in the Bhakra-Nangal and Beas 

Projects. Section 78(1) of the Punjab Reorganisation Act, 

1966, it is true, provides that the rights and liabilities of the 

successor States of the composite State of Punjab will be 

fixed according to an agreement between the successor 

 57

States. But, as we will discuss under Issue No.7, there is 

no such final agreement between the successor States with 

regard to the share of power generated in the Bhakra-

Nangal and Beas Projects and there is only a `tentative, ad 

hoc or interim arrangement' arrived at in the meeting held 

on 17.04.1967. We may add here that even when this suit 

was pending before this Court, an order was passed by this 

Court on 29.04.2010 directing the Union of India to make a 

final effort to bring all the parties to the dispute to the 

negotiating table and by acting as a meaningful mediator 

attempt to find a solution which is mutually acceptable to 

all the parties and the case was adjourned for three months 

to enable the parties to arrive at a mutually acceptable 

solution with the guidance of the Union Government, but an 

affidavit was filed in the Court on behalf of the Central 

Government stating that a Secretary level meeting was held 

with the stakeholder States but a settlement could not be 

arrived at, as the stakeholder States stuck to their 

respective claims. It is in these circumstances only that the 

Court has proceeded to hear and decide the suit.

 58

58. We have also perused the decision of the Federal Court 

in United Provinces v. Governor-General in Council (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 

 59

the Bhakra-Nangal and Beas Projects. The fact that the 

rights and liabilities of the successor States were to be fixed 

by an agreement to be entered into by the successor States 

after consultation with the Central Government does not 

affect the legal right of the State of Himachal Pradesh to 

receive and utilize the power generated as a result of 

Bhakra-Nangal and Beas Projects. Similarly, the fact that 

in the absence of any agreement within two years as 

stipulated in sub-section (1) of Section 78 the Central 

Government was empowered to determine by an order the 

right and liabilities of the successor States does not affect 

the legal right of the State of Himachal Pradesh to receive 

and utilize the power generated as a result of the Bhakra-

Nangal and Beas Projects. We have, therefore, no doubt in 

our mind that the Plaintiff had a legal right as a successor 

State of the composite State of Punjab to receive and utilize 

the power generated in the Bhakra-Nangal and Beas 

Projects and this right was recognized by law and capable of 

being enforced by the power of the State. 

59. Article 131 of the Constitution provides that this Court 

has original jurisdiction in any dispute between the parties 

 60

mentioned therein if and in so far as the dispute involves 

any question (whether of law or fact) on which the existence 

or extent of a legal right depends. Hence, this Court has 

jurisdiction not only to decide any question on which the 

existence of a legal right depends but also to decide any 

dispute involving any question on which the extent of a legal 

right depends. We, therefore, have the jurisdiction to decide 

the extent to which Plaintiff-State would be entitled to 

receive and utilize the power generated in the Bhakra-

Nangal and Beas Projects. In other words, the suit of the 

Plaintiff is not barred by the scheme of Sections 78 to 80 of 

the Punjab Reorganisation Act, 1966. Issue No.6 is 

answered accordingly. 

Issue No.7

60. Mr. Mohan Jain, the Additional Solicitor General 

appearing for Defendant No.1 and Mr. Shyam Diwan, 

learned counsel for Defendant No.2, submitted that Section 

78 of the Punjab Reorganisation Act, 1966, provides that 

the rights and liabilities in regard to Bhakra-Nangal and 

Beas Projects of the successor States of the composite State 

of Punjab shall be in such proportion as may be fixed by an 

 61

agreement entered into by the successor 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. 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, adhoc 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 

 62

Central Government did not decide the claim of the Plaintiff-

State and hence the Plaintiff had no option but to file the 

suit under Article 131 before this Court. 

62. We have gone through the evidence and we find that 

by a letter dated 12.03.1967 of the Government of India, 

Ministry of Finance, Department of Economic Affairs, 

addressed to the Secretaries, Finance Department of the 

Government of Punjab and Haryana, marked as Ex.P-4, 

liability for the loan taken by the composite State of Punjab 

from the Central Government for Bhakra-Nangal and Beas 

Projects have been allocated `provisionally' among the 

successor States of Punjab and Haryana in the ratio of 

53:47 (for Bhakra Loans) and 60:40 (for Beas Project) for the 

purpose of repayment of principal and payment of interest. 

In the said letter (Ex.P-4) it is clearly stated that the 

allocation is a `purely an ad hoc and temporary 

arrangement' and will be subject to re-adjustment later 

when the final allocation of the debt is made in terms of the 

provisions of Section 54(3) of the Punjab Reorganisation Act, 

1966. The summary of discussions held in the room of the 

Secretary, Ministry of Irrigation and Power on 17.04.1967 

 63

regarding the formation of two separate Electricity Boards 

for Haryana and Punjab and related matters have been 

circulated by a memorandum dated 27.04.1967 of the 

Government of India, Ministry of Irrigation and Power, 

marked as Ex.D-1/6. Para 3 of the summary discussions 

which records the alleged agreement between the successor 

States with regard to allocation of assets and liabilities in 

relation to the Bhakra-Nangal Project and the Beas Project 

is extracted hereinbelow:

 "Shri Nawab Singh stated that a decision on 

 the tentative allocation of assets and 

 liabilities of Punjab and Haryana had been 

 taken earlier on the basis of 58% : 42%. Now 

 the shares of the Union Territories of 

 Himachal Pradesh and Chandigarh had to be 

 decided. He further stated that at a meeting 

 held in this regard recently an agreement had 

 been reached on the allocation of a share of 

 3.5% to Chandigarh and 2.5% to Himachal 

 Pradesh and the remaining, ratio of 58:42. 

 On this basis, the shares of the four 

 constituents would become as under:

 Punjab - 54.5%

 Haryana - 39.5%

 Chandigarh - 3.5%

 Himachal Pradesh - 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 

 64

 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, transmission lines etc. Along 

with the record of discussion, the list of fixed assets 

`tentatively' allocated to the Haryana Electricity Board, 

Punjab Electricity Board, Union Territory of Himachal 

Pradesh and Union Territory of Chandigarh were annexed. 

Similarly, the list showing `tentative' apportionment of 

financial assets and liabilities as agreed in the meeting held 

 65

on 17.04.1967 was also annexed. It thus appears that 

allocation of rights and liabilities to the constituents of the 

composite State of Punjab which took place at the meeting 

held on 17.04.1967 was purely `tentative' and not final. 

This is confirmed in the letter dated 29.05.1967 of the 

Government of India, Ministry of Irrigation and Power, 

marked as Ex.P-7, addressed to the Secretaries to the 

Government of Punjab, Haryana and Rajasthan on the 

subject `Financial Arrangements for Bhakra and Beas 

Projects', in which it is reiterated that the allocation was 

purely on ad hoc and tentative basis and was to be without 

prejudice to the rights of Governments of Punjab and 

Haryana and was subject to re-adjustment later when final 

allocation of debt liability is made and the ratio in which 

capital and reserve expenditure in respect of the project is 

decided in terms of the provisions of Section 54(3) of Punjab 

Reorganisation Act, 1966. We also find from the evidence 

that by a letter dated 20.03.1978 addressed by the Ministry 

of Energy, Government of India to Shri Shanta Kumar, Chief 

Minister of Himachal Pradesh, 15 MW of power has been 

allotted on `ad hoc basis' to Himachal Pradesh pending a 

 66

final decision of the concerned States if Himachal Pradesh 

was agreeable to the proportionate cost of the project. In an 

another subsequent letter dated 16.08.1983 of the 

Government of India, Ministry of Energy (Department of 

Power) to the Chairman, Bhakra Beas Management Board, 

marked as Ex.P-48, it is expressly stated: 

 "The quantum of benefits from Bhakra and 

 Beas projects presently allocated to these two 

 areas on an ad hoc basis will remain 

 unaltered until a final decision is taken on 

 the sharing of the rights and liabilities of all 

 the successor states in the two projects."

The documentary evidence before the Court, therefore, 

clearly establishes that the allocation of power to Himachal 

Pradesh to the extent of 2.45% of the share of the power of 

the composite State of Punjab 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. 

 67

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 

as Himachal Pradesh bears the reservoir of the Beas Project, 

Himachal Pradesh is also the "Mother State" vis-`-vis the 

Beas Project. He submitted that the Union Government has 

taken a decision that the Mother State or the Home State 

where a hydro-electric power project is located, will be 

supplied 12% of the power generated by the power station 

free of cost and this will be evident from the letter dated 

 68

22.07.1985 of the Government of India, Ministry of 

Irrigation & Power (Department of Power) to the Chairman, 

H. P. State Electricity Board, which has been produced and 

marked as Ext. P-55. He submitted that the Himachal 

Pradesh Assembly accordingly adopted a resolution on 

13.03.1984 making a demand to the Union of India to give 

to Himachal Pradesh 12% free power from Bhakra, Dehar 

and Pong power projects in lieu of use of water and land of 

Himachal Pradesh for generation of electricity and 

accordingly the Chief Minister of Himachal Pradesh 

addressed a letter on 18.06.1984 forwarding a copy of the 

resolution of the Himachal Pradesh Assembly claiming 12% 

free supply of power to Himachal Pradesh from Bhakra, 

Dehar and Pong power projects, but this claim of Himachal 

Pradesh has not been accepted by the Central Government. 

Mr. Ganguli referred to the letter dated 19.02.1968 of Shri 

Y. S. Parmar to Dr. K. L. Rao, Union Minister of Irrigation & 

Power, marked as Ext. P-8, to show how in the case of other 

projects, namely, the Periyar Project in the Madras State 

and the Muchkund Project in Orissa State benefits have 

been given to the State whose resources are affected on 

 69

account of the construction of hydro-electric project. He 

also referred to the views of the Vice-Chairman of the 

Central Water and Power Commission in his communication 

dated 02.05.1968, marked as Ext. P-10, suggesting that the 

Himachal Pradesh should be made an active partner of the 

Hydro-Electric Project borne by it by paying to Himachal 

Pradesh the annual royalties based on actual utilization of 

the water, power rights. He argued that all these materials 

clearly show that Himachal Pradesh is entitled to 12% free 

power from the Bhakra-Nangal and Beas Projects by virtue 

of it being the Mother State or the Home State and by virtue 

of loss of its land and water on account of the Bhakra and 

Beas Projects.

64. Mr. Shyam Diwan, learned counsel for the Defendant 

No.2, submitted that this claim of 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 

 70

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 another (supra) and Kuldip Nayar& Ors. v. 

Union of India & 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 any State or by uniting two 

or more States or parts of States or by uniting any territory 

to a part of any 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, but under Article 3, 

Parliament cannot take away the powers of the State 

Executive or the State Legislature in respect of matters 

 71

enumerated in List-II of the Seventh Schedule to the 

Constitution. This has been made clear in the speech of Dr. 

B.R. Ambedkar in the Constituent Assembly quoted in Para 

52 of the decision of this Court in Kuldip Nayar v. Union of 

India & Ors. (supra). Relevant portion from the speech of 

Dr. B.R. Ambedkar is quoted hereinbelow:-

 ".... The basic principle of federalism is that 

 the legislative and executive authority is 

 partitioned between the Centre and the States 

 not by any law to be made by the Centre but 

 by the Constitution itself. This is what 

 Constitution does. The States under our 

 Constitution are in no way dependent upon 

 the Centre for their legislative or executive 

 authority. The Centre and the States are 

 coequal in this matter....."

66. We have however held, while answering Issue No.2, 

that pursuant to the Bilaspur Merger Agreement, the States 

Merger (Chief Commissioners Provinces) Order, 1949, 

inclusion of the Bilaspur State as a Part-C State in the First 

Schedule of the Constitution and Article 294(b) of the 

Constitution, the Raja of Bilaspur lost all rights first to the 

Dominion of India and thereafter to the Government of India 

and that the Plaintiff, therefore, could not have any cause of 

action to make any claim on the basis of any right of Raja of 

 72

Bilaspur prior to the merger of the Bilaspur State with the 

Dominion of India. The Plaintiff, therefore, cannot claim 

any free power because of loss of land and water by the Raja 

of Bilaspur. We have also held while answering Issue No.5 

that in 1959 when the States of Punjab and Rajasthan 

agreed to construct the Bhakra Dam, Himachal Pradesh 

was a Union Territory and the executive and legislative 

power over water and land under Entries 17 and 18 of List-

II of the Seventh Schedule to the Constitution vested in the 

Union of India and the Union of India in exercise of its 

constitutional powers acquiesced in the construction of the 

Dam at Bhakra over river Satluj. We have also held while 

answering to Issue No.5 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 

 73

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 liabilities of Himachal 

Pradesh as a successor State of the Composite State of 

Punjab will be discussed while answering the Issue No.9.

68. The claim of the Plaintiff to 12% free power therefore is 

not based on any legal right of the Plaintiff, constitutional or 

statutory, but only on the decision of the Government of 

India referred to in the letter dated 22.07.1985 of the 

Government of India, Ministry of Irrigation & Power, 

 74

(Department of Power) to the Chairman, H.P. State 

Electricity Board (Ext. P-55) which is extracted hereinbelow 

in extenso:- 

 "K. Padmabhaiah

 Jt. Secretary

 Government of India

 Ministry of Irrigation & Power

 (Department of Power)

 (Sanchai aur Vidyut Mantralaya

 New Delhi the 22nd July 1985

 D.O.No. 53/3/79-DDH

 Dear Shri Mahajan,

 I am glad to inform you that the formula for 

 sharing of power and benefits from Central Sector 

 Hydro Electric Projects has been modified by the 

 Cabinet on 12.02.1985. The revised formula is 

 reproduced below for your information:-

 (a) 15% of the generation capacity should be 

 kept as unallocated at the disposal of the Central 

 Govt. to be distributed within the Region or 

 outside, depending upon overall requirements. 

 (b) The "Home State", i.e. where the project is 

 located will be supplied 12% of power from the 

 energy generated by the power station, free of cost. 

 The "energy generated" figures for the purpose will 

 be calculated at the bus bar level, i.e. after 

 discounting the auxiliary consumption but without 

 taking into account the transmission line losses 

 and 

 (c) The remaining power (73%) would be 

 distributed between the States of region (including 

 75

 the Home State) on the basis of Central Assistance 

 given to various States in the region during the 

 last five years and on the basis of consumption of 

 electricity in the States in the region in the last five 

 years, the two factors being given equal weightage. 

 2. This revised formula would be applicable in 

 respect of those Central Sector Hydro Electric 

 Projects in whose case sanction for investment 

 decision is issued after 12.02.1985.

 3. The Cabinet has also approved the concept 

 of Joint ventures between the Union and one or 

 more State Government for implementation of 

 hydro-electric 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 

 76

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-Electric Projects and as per this formula after supply 

of 12% free power to the Home State, the remaining power is 

to be distributed to the partner States proportionate to their 

investment. This formula of making 12% free power from 

the energy generated by a power station is purely a policy-

decision taken by the Government of India much after the 

Bhakra-Nangal Project and Beas Project were executed and 

in any case does not find place in any provision of law so as 

to confer a legal right on the Plaintiff to claim the same. 

Our answer to Issue No.8 is that the Plaintiff-State is not 

entitled to 12% power generated from the Bhakra-Nangal 

and Beas Projects free of cost from the date of 

commissioning of the Projects. 

 77

Issue No.9

70. The claim of the Plaintiff to allocation of 7.19% of the 

total power generated in Bhakra-Nangal and Beas Project 

from 01.01.1996 is based on the Punjab Reorganisation Act, 

1966 and the State of Himachal Pradesh Act, 1970. We 

have already extracted Section 78 of the Punjab 

Reorganisation Act, 1966, while answering Issue No. 6. 

The other provisions of the Punjab Reorganisation Act, 

1966, which are relevant for deciding this issue, are 

extracted herein below:

 "Section 2(b) "appointed day" means the 1st day 

 of November, 1966;

 .......................................................................

 .......................................................................

 (f) "existing State of Punjab" means the State of 

 Punjab as existing immediately before the 

 appointed day;

 (i) "population ratio", in relation to the States of 

 Haryana and Punjab and the union, means the 

 ration of 37.38 to 54.84 to 7.78;

 (m) "successor state", in relation to the existing 

 State of Punjab means the State of Punjab or 

 Haryana, and includes also the Union in relation 

 to the Union rerritory of Chandigarh and the 

 transferred territory;

 (n) "transferred territory" means the territory 

 which on the appointed day is transferred from 

 78

the existing State of Punjab to the Union territory 

of Himachal Pradesh;

Section 5. Transfer of territory from 

Punjab to Himachal Pradesh. - (1) On and from 

the appointed day, there shall be added to the 

Union territory of Himachal Pradesh the 

territories in the existing State of Punjab 

comprised in- 

(a) Simla, Kangra, Kulu and lahul and Spiti 

districts; 

(b) Nalagarh tehsil of Ambala district; 

(c) Lohara, 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 

 79

 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 of the Hamirpur tehsil in the said 

 district. 

 (4) The territories referred to in clause (f) of sub-

 section (1) shall be included in, and form part of 

 the Bhattiyat tehsil of Chamba district in the 

 Union territory of Himachal Pradesh and in that 

 tehsil, the villages Dalhousie and Balun shall be 

 included in, and form part of Banikhet kanungo 

 circle and the village Bakloh shall form part of 

 Chowari kanungo circle."

71. The State of Himachal Pradesh Act, 1970 

thereafter established the New State of Himachal Pradesh 

comprising the territories which were comprised in the 

existing Union Territory of Himachal Pradesh. In exercise 

of the powers conferred on the Central Government under 

Section 38 of the State of Himachal Pradesh Act, 1970, 

the Central Government has passed an order dated 

07.07.1972 called `the State of Himachal Pradesh 

(Transfer of Assets and Liabilities) Order, 1972'. Para 7 

of this Order, which is relevant and is extracted 

hereinbelow:

 "For the purposes of paragraphs 5 and 6 of this 

 order the provisions of Section 2 of the Punjab 

 80

 Reorganisation Act, 1966 (31 of 1966), shall 

 have effect as if: (i) for clause (i), the following 

 clauses had been substituted namely:

 (i) "Population ratio" in relation to the States of 

 Haryana, Punjab and Himachal Pradesh and 

 the Union means the ratio of 37.38 to 54.84 to 

 7.10 to 0.59%".

 (ii) For clause (m), the following clause had 

 been substituted namely:

 (m) "Successor State" in relation to the existing 

 State Punjab means the State of Punjab or the 

 State of Haryana or the State of Himachal 

 Pradesh and includes also the Union, in relation 

 to the Union Territory of Chandigarh."

72. Mr. Ganguli, learned counsel for the 

Plaintiff, submitted that it will be clear from clause (i) of 

para 7 of the State of Himachal Pradesh (Transfer of 

Assets and Liabilities) Order, 1972 that the population 

ratio in relation to the States of Haryana, Punjab and 

Himachal Pradesh and the Union Territory of Chandigarh 

is Haryana: 37.38%, Punjab: 54.84, Himachal Pradesh: 

7.19% and Chandigarh: 0.59%. He argued that on the 

basis of such population ratio, the Plaintiff is, therefore, 

entitled to 7.19% of the total power generated in the 

Bhakra-Nangal and Beas Projects as a successor State of 

 81

the composite State of Punjab. He submitted that the 

allocation of only 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 

 82

Defendant No.2, on the other hand, submitted that since 

there was an agreement between the successor States 

arrived at in the meeting held on 17.04.1967 and this 

agreement was entered into within two years stipulated in 

Section 78(1) of the Punjab Reorgansiation Act, 1966 and 

was binding on the parties, the Plaintiff-State is not 

entitled to 7.19% of the share of power generated in 

Bhakra-Nangal and Beas Projects. They further 

submitted that Section 78(1) of the Punjab 

Reorgansiation Act, 1966 is clear that the rights and 

liabilities of the successor State of the composite Punjab 

State in relation to Bhakra-Nangal and Beas Projects are 

to be settled by agreement within two years or by an 

order passed by the Central Government if no such 

agreement is entered into within two years and, therefore, 

this Court cannot consider the claim of the Plaintiff to a 

share of 7.19% of the power generated in the two 

Projects.

74. The language of Section 78(1) shows that the 

right of the successor States in relation to Bhakra-Nangal 

and Beas Projects are rights on account of their 

 83

succession to the composite State of Punjab on the 

reorganization of the composite State of Punjab. The 

language of Section 78 further makes it clear that if no 

agreement is entered into between the States within two 

years of the appointed day, the Central Government was 

required to determine the rights and liabilities of the 

successor States "having regard to the purposes of the 

Projects". Hence, the purposes of the Bhakra-Nangal 

and Beas Projects will have to be kept in mind while 

deciding the share of the successor States. 

75. The purposes of the Bhakra-Nangal Project, as 

evident from the agreement dated 13.01.1959 between 

the State of Punjab and the State of Rajasthan, were 

"improvement or irrigation and generation of Hydro-

electric power". Clause 9(2) of the agreement dated 

13.01.1959 (Ext. D-1/3) provides that the shares of the 

Punjab and Rajasthan in the stored water supplies was to 

be 84.78% and 15.22% respectively and clause 32 of this 

agreement provides that each party shall contribute to 

the capital cost of the electrical portion of the project in 

proportion to the share of either party in the stored water 

 84

supply. Thus, the capital cost contributed by the 

composite State of Punjab for construction of the Hydro-

electric project of Bhakra-Nangal was 84.78% and this 

capital cost was borne by the composite State of Punjab 

as a whole including the transferred territory which 

formed 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 

 85

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 equitable. 

The allocation of only 2.5% of the total share of the power 

of the composite State of Punjab generated in the two 

Projects to Himachal Pradesh has been made on the 

basis of actual consumption of power by the people in the 

transferred territory and the location of the sub-stations 

in the transferred territory. The summary of discussion 

held in the room of the Secretary, Ministry of Irrigation 

and Power, on 17.04.1967 (Ext. D-1/6) shows that the 

allocation of power to Punjab is 54.5% of the total power 

whereas the allocation of power to Haryana is 39.5% of 

the total power available to the composite State of 

Punjab. These allocations appear to have been done on 

the basis of the population ratio of Punjab and Haryana 

in the composite State, which were 54.84% and 37.38% 

respectively. Thus, while States of Punjab and Haryana 

 86

have been allocated power on the basis of their 

population ratio, Himachal Pradesh has been allocated 

power on "as is where is basis". 

77. Equal treatment warranted that the Plaintiff-

State was allocated 7.19% of the total power generated in 

the Bhakra-Nangal and Beas Projects (after excluding the 

power allocated to the Defendant No.4 - State of 

Rajasthan) from the appointed day as defined in the 

Punjab Reorganisation Act, 1966, i.e. 01.11.1966. 

Considering the fact that Chandigarh is the Capital of 

both Punjab and Haryana, these two States should meet 

the power requirements of the Union Territory of 

Chandigarh out of their share. We accordingly order that 

the entitlement of power of the constituents of the 

composite State of Punjab from the Bhakra-Nangal and 

Beas Projects will be at the following percentages:

 Himachal Pradesh : 7.19%

 UT of Chandigarh : 3.5%

 Punjab : 51.8%

 Haryana : 37.51%

 87

Therefore, the entitlement of the Plaintiff out of the total 

production will be as under:

Project Entitlement in With effect from

 total production

(i) Bhakra-Nangal 6.095% 01.11.1966

 (7.19% of 84.78%) (date of re-organisation)

(ii) Beas I 5.752% From the date of

 (7.19% of 80%) commencement of 

 Production

(iii) Beas II 2.984% From the date of

 (7.19% of 41.5%) 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 

 88

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 accordance with the 

provisions of the Punjab Reorganisation Act, 1966 and 

file a statement in this Court stating the amount due to 

the Plaintiff from Defendant Nos.2 and 3 upto October, 

2011. 

Issue No. 11

79. Since the Defendant Nos. 2 and 3 have utilized 

power in excess of what was due to them under law, we 

also hold that the Plaintiff-State will be entitled to 

interest at the rate of 6% on the amounts determined by 

the Union of India to be due from Defendant Nos.2 and 3. 

80. Reliefs: 

(i) The suit is decreed in part against Defendant 

Nos. 2 and 3 and dismissed against Defendant Nos. 1, 4 

and 5. 

 89

(ii) It is hereby declared that the Plaintiff-State is 

entitled to 7.19% of the power of the composite State of 

Punjab from the Bhakra-Nangal Project with effect from 

01.11.1966 and from Beas Project with effect from the 

dates of production in Unit I and Unit II.

(iii) It is ordered that Defendant No.1 will work out the 

details of the claim of the Plaintiff-State on the basis of 

such entitlements of the Plaintiff, Defendant No.2 and 

Defendant No.3 in the tables in Paragraph 77 of this 

judgment as well as all other rights and liabilities of the 

Plaintiff-State, Defendant No.2 and Defendant No.3 in 

accordance with the provisions of the Punjab 

Reorganisation Act, 1966 and file a statement in this 

Court within six months from today stating the amounts 

due to the Plaintiff-State from Defendant Nos. 3 and 4. 

(iv) On the amount found to be due to the Plaintiff-

State for the period from 01.11.1966 in the case of 

Bhakra-Nangal Project and the amount found due to the 

Plaintiff-State for the period from the dates of production 

in the case of Beas Project, the Plaintiff-State would be 

 90

 entitled to 6% interest from Defendant Nos. 2 and 3 till 

 date of payment. 

 (v) With effect from November 2011, the Plaintiff-

 State would be given its share of 7.19% as decreed in this 

 judgment. 

 (vi) The Plaintiff-State will be entitled to a cost of Rs. 5 

 lakhs from Defendant No.2 and a cost of Rs.5 lakhs from 

 Defendant No.3.

 The matter will be listed after six months along 

 with the statements to be prepared and filed by the 

 Defendant No.1 as ordered for verification of the 

 statements and for making the final decree.

 ..........................J.

 (R. V. Raveendran)

 ..........................J.

 (A. K. Patnaik)

New Delhi,

September 27, 2011. 

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