M A I N   N E W S

Bhakra-Beas projects
Punjab, Himachal spar in SC over compensation
R Sedhuraman
Legal Correspondent

As all parties acknowledge that the case requires a detailed hearing, the Bench posts it for August 7. PTI

New Delhi, July 2
Punjab and Himachal Pradesh today sparred in the Supreme Court over the compensation recommended by the Centre for short supply of electricity to HP from Bhakra and Beas projects since 1966.

Arguing for Himachal Pradesh before a Bench comprising Justices Ranjana Desai and NV Ramana, senior advocates AK Ganguly and JS Attri rejected the compensation amount recommended by the Centre on the basis of old electricity rates involving subsidy for fertiliser production in the 1950s.

Money tangle HP's counsels reject the relief amount suggested by the Centre on the basis of old electricity rates Punjab says HP should share investment, operation, maintenance costs if it wants compensation on the basis of standard method Centre had last year told Supreme Court that Punjab and Haryana would have to pay Rs 1,497.39 crore to HP in 58:42 ratio

The compensation should be calculated by adopting the standard method being followed by producers for selling power to the distribution companies in various states, HP contended.

The Centre, however, said it had suggested various amounts calculated under different methods and it was for the court to decide the compensation.

Appearing for Punjab, senior counsel Rupinder Singh Suri said if HP wanted compensation on the basis of the standard method, it should share the investment, operation and maintenance costs and other charges which were met by Punjab and Haryana.

As all parties acknowledged that the case required a detailed hearing to resolve the compensation dispute, the Bench posted it for August 7. On July 16 last year, the Centre had told the SC that Punjab and Haryana would have to pay a compensation of Rs 1,497.39 crore to HP in the ratio of 58:42. HP had claimed a compensation of Rs 4,249 crore.

The Centre had calculated the compensation amount on SC’s directive in the September 27, 2011 judgment in HP’s original suit filed in 1996 seeking a higher share of electricity from these power projects.

Subsequently, Punjab and Haryana told the SC that they did not owe Rs 1,497.39 crore to HP, as calculated by the Centre. Rather, HP owed them Rs 1,611.88 crore, representing its share in the construction cost of these projects, funds for which were raised by them through loans on interest, they said.

Haryana also rejected Centre’s alternative suggestion that instead of paying the amount in cash, HP could be compensated by additional allocation of power over the next 30 years.