2011 (9) TMI 1197 - SC - Indian Laws

Summary

Issues Involved:

1. Maintainability of the suit due to limitation, delay, and laches.
2. Cause of action post-merger of Bilaspur with the Dominion of India.
3. Bar under Article 363 of the Constitution.
4. Maintainability under Article 131 of the Constitution.
5. Cause of action against Defendant Nos. 3 and 4.
6. Maintainability by virtue of the Punjab Reorganisation Act, 1966.
7. Agreement on power sharing from the Bhakra-Nangal and Beas Projects.
8. Entitlement to 12% free power.
9. Entitlement to 7.19% of the total power generated.
10. Compensation claim of Rs. 2199.77 crores.
11. Award of interest on amounts determined.

Issue-wise Detailed Analysis:

Issue No. 1: Maintainability of the suit due to limitation, delay, and laches

The court held that Article 131 of the Constitution does not prescribe any period of limitation for filing a dispute. Since there has been no final allocation of power from the Bhakra-Nangal and Beas Projects to the Plaintiff-State and the allocations made are only ad hoc or interim, the claim remains live and cannot be considered stale or belated. Thus, the suit is not barred by limitation, delay, and laches.

Issue No. 2: Cause of action post-merger of Bilaspur with the Dominion of India

The court found that the Plaintiff cannot claim rights based on the Raja of Bilaspur post-merger with the Dominion of India. However, the Plaintiff's claim to power is also based on Section 78 of the Punjab Reorganisation Act, 1966, and the rights under the Constitution, which are not affected by the merger. Therefore, the Plaintiff has a cause of action based on these provisions.

Issue No. 3: Bar under Article 363 of the Constitution

The court held that the jurisdiction under Article 131 does not extend to disputes arising out of treaties or agreements entered before the Constitution's commencement. However, the Plaintiff's claim is based on the Punjab Reorganisation Act, 1966, and constitutional provisions, not on any pre-constitutional agreement. Thus, the suit is not barred under Article 363.

Issue No. 4: Maintainability under Article 131 of the Constitution

The court rejected the contention that the suit is a dispute regarding the use of water in inter-state rivers, which would be barred under Article 262(2) of the Constitution. The dispute pertains to the sharing of power generated in the Bhakra-Nangal and Beas Projects, not the use of water, making the suit maintainable under Article 131.

Issue No. 5: Cause of action against Defendant Nos. 3 and 4

The court held that the Plaintiff has a legal right to power from the Bhakra-Nangal and Beas Projects as a successor State under Section 78 of the Punjab Reorganisation Act, 1966. However, since the State of Rajasthan was not part of the composite State of Punjab, the Plaintiff has no cause of action against Rajasthan. The suit is maintainable against Defendant Nos. 2, 3, and 5.

Issue No. 6: Maintainability by virtue of the Punjab Reorganisation Act, 1966

The court found that Section 78(1) of the Punjab Reorganisation Act, 1966, confers a legal right on the Plaintiff to receive and utilize power generated from the Bhakra-Nangal and Beas Projects. The absence of a final agreement or Central Government order determining the rights does not affect this legal right. Thus, the suit is maintainable.

Issue No. 7: Agreement on power sharing from the Bhakra-Nangal and Beas Projects

The court concluded that the allocation of power to Himachal Pradesh was tentative and ad hoc, not final. There is no final agreement between the successor States regarding the allocation of power from the Bhakra-Nangal and Beas Projects as required under Section 78(1) of the Punjab Reorganisation Act, 1966.

Issue No. 8: Entitlement to 12% free power

The court held that the Plaintiff's claim to 12% free power is not based on any legal right, constitutional or statutory, but on a policy decision of the Government of India applicable to Central Sector Hydro-Electric Projects post-1985. Thus, the Plaintiff is not entitled to 12% free power from the Bhakra-Nangal and Beas Projects.

Issue No. 9: Entitlement to 7.19% of the total power generated

The court found that the Plaintiff is entitled to 7.19% of the total power generated from the Bhakra-Nangal and Beas Projects based on the population ratio of the transferred territory. The allocation of only 2.5% was inequitable. The court ordered the entitlement of power to the constituents of the composite State of Punjab, including Himachal Pradesh, to be recalculated.

Issue No. 10: Compensation claim of Rs. 2199.77 crores

The court directed the Union of India to work out the details of the Plaintiff's claim based on the entitlements and file a statement in the court. The Plaintiff's claim for compensation will be determined based on this statement.

Issue No. 11: Award of interest on amounts determined

The court awarded interest at the rate of 6% on the amounts determined to be due to the Plaintiff from Defendant Nos. 2 and 3 for utilizing power in excess of their entitlement.

Reliefs Granted:

1. The suit is decreed in part against Defendant Nos. 2 and 3 and dismissed against Defendant Nos. 1, 4, and 5.
2. Plaintiff-State is entitled to 7.19% of the power from Bhakra-Nangal and Beas Projects from the respective dates.
3. Defendant No. 1 to work out the details of the Plaintiff's claim and file a statement in the court.
4. Plaintiff-State is entitled to 6% interest on the amounts due from Defendant Nos. 2 and 3.
5. Plaintiff-State to receive its share of 7.19% from November 2011.
6. Plaintiff-State awarded costs of Rs. 5 lakhs each from Defendant Nos. 2 and 3.

The matter will be listed after six months for verification of the statements and making the final decree.