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Case Analysis

STATE OF HARYANA V. STATE OF PUNJAB AND

ANR.
AIR 2002 SC 685

SUBMITTED TO:
MR. GIRISH R.
ASSISTANT PROFESSOR OF LAW

SUBMITTED BY:
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ARMAAN GUPTA (15A027)

TABLE OF CONTENTS

ACKNOWLEDGEMENTS...................................................................3

INTRODUCTION ....4

LAW APPLICABLE TO RIVER WATER DISPUTE SETTLEMENT ....4

CASE PARTICULARS .. . .5

FACTS OF THE CASE ....6

CONTENTIONS OF THE PLAINTIFF ....8

CONTENTIONS OF THE DEFENDANTS . . .9

ISSUES FRAMED ............................................................................10

JUDGEMENT ....11

AFTERMATH ...................................................12

CONCLUSION ............................................................................... 14

BIBLIOGRAPHY .....................................................................16
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ACKNOWLEDGEMENTS
I deem it my utmost privilege to present this case analysis on State of Haryana vs State of
Punjab.

I would like to express my deepest gratitude to the Director, Dr Bimal N. Patel, Gujarat
National Law University, for granting this opportunity to research for which I shall remain
indebted forever.

At this juncture, I would like to express my deepest gratitude to Mr. R. Girish, Assistant
Professor of Law at the Gujarat National Law University for his immense resourcefulness
and precious guidance while preparing this paper.

In the end, I would also like to thank anyone who has directly or indirectly supported me
during this project.
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INTRODUCTION
India is a federal democracy that consists of several rivers that cross interstate boundaries. It
is hence, important to develop a machinery which is effective and efficient enough to find
solutions to inter-state water disputes and conflicts. The allocation of river water has been a
controversial issue since independence and the formation of various States. The main reason
for the increase in number of water disputes is due to the disproportionately high growth rate
of population along with irrigation based agriculture, rapid industrialization and rise of
thermal power. Although the Constitution does not have many provisions with respect to
water disputes, it does, however provide the Parliament with power to make laws on this
subject. The politicization of interstate water disputes in India however, has led to
ineffectiveness of the dispute resolution structure. One such water dispute is State of Haryana
vs State of Punjab.

LAW APPLICABLE TO WATER DISPUTE

SETTLEMENT
CONSTITUTIONAL PROVISIONS:

Article 262 states that Parliament may by law provide for the adjudication of any dispute with
respect to the use, distribution or control of the waters of any inter-State river or valley.
Article 262(2) permits Parliament to bar the jurisdiction of the Supreme Court or any other
Court with respect to such dispute or complaints.1

STATUTORY PROVISIONS:

The Parliament enacted the River Boards Act, 1956 and the Inter-State Water Disputes Act,
1956 to create a mechanism for water-dispute settlement. Section 2(c) of the Inter-State River
Water Disputes Act, 1956 defines water dispute.

1 Article 262, Constitution of India, 1950.

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 Clause 2 (c) (1) states that a water dispute is a dispute regarding the use, distribution
and control of the waters of any inter-State rivers between State governments.2
 Clause 2 (c) (2) states that a water dispute can be a dispute regarding implementation
or interpretation of an agreement in relation to use, distribution and control of the
waters of any inter-State rivers between State governments.3
 Clause 2 (c) (3) states that the levying of any water rate as against prohibition can
constitute a water dispute.4
 Section 3 authorizes States to make an application to the Centre requesting it to set up
a water dispute Tribunal if a water dispute has arisen or is likely to arise.5
 Section 4 empowers the Centre to set up a Tribunal if it believes the dispute cannot be
settled by negotiation and states that the subject matter of the dispute is limited to
what is referred by the Central Government to the Tribunal.6
 Section 5 states that the tribunal must prepare a report and submit it to the Central
Government7 and Section 6 states that a tribunal order is not binding, till the same has
been published in the Official Gazette of India by the Central Government.8
 Section 11 bars the jurisdiction of the Supreme Court in relation to any water dispute
referred to a Tribunal constituted under the Act.9

CASE PARTICULARS
Case No: Original Suit No. 6 of 1996

Citation: AIR 2002 SC 685

Coram: G.B Pattanaik, JJ and Ruma Pal, JJ

Plaintiff: State of Haryana

Defendants: State of Punjab, Union of India

2 Section 2 (c) (1), Inter-State Water Disputes Act.

3 Section 2 (c) (2), Inter-State Water Disputes Act.
4 Section 2 (c) (3), Inter-State Water Disputes Act.
5 Section 3, Inter-State Water Disputes Act.
6 Section 4, Inter-State Water Disputes Act.
7 Section 5, Inter-State Water Disputes Act.
8 Section 6, Inter-State Water Disputes Act.
9 Section 11, Inter-State Water Disputes Act.
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FACTS OF THE CASE

In the year 1960, Government of India signed a treaty with Pakistan regarding three rivers,
Sutlej, Beas and Ravi, called the Indus Water Treaty of 1960. According to this treaty, these
three rivers were acquired by India for unrestricted use and to the exclusion of Pakistan, and
India paid a one-time contribution of 110 crore rupees to Pakistan as consideration for the
same. During this period, the State of Punjab was named as one of the beneficiary states for
development and utilization of the waters of River Beas. In 1966, the then State of Punjab
was divided into two States, Punjab and Haryana. Regarding sharing of the water of River
Beas, Section 78 of the Punjab Reorganisation Act, 1966 dealt with the rights and liabilities
of both States. However, disputes arose between the two States regarding their share of water,
and the Government of India took a decision on ad hoc basis pending final decision, where
35% of water was to go to Haryana and 65% of the water was to go to Punjab. The State of
Haryana approached the Government of India in 1969 under Section 78 of the Punjab
Reorganisation Act, 1966, whereby a committee was appointed by the Central Government,
which prepared a report and recommended that a higher share of the surplus waters of the
River Beas be allotted to State of Haryana. A notification was issued on 24 th March 1976,
allocating the surplus waters between the two States of Punjab and Haryana in accordance
with the report of the committee. It was subsequently discovered that the State of Haryana
could not draw the share of water allocated to it through existing canals, hence the State of
Haryana proposed a link canal called the Sutlej Yamuna Link Canal, 214 kilometres long, out
of which 122 kilometres would be in the territory of Punjab and 92 kilometres in the territory
of Haryana, and an agreement between the two States was executed, and money was also
given to Punjab as consideration. Haryana completed its share of canal in June 1980, but
Punjab adopted dilatory tactics and did not construct its part of the canal.10

As a result, The State of Haryana filed a suit in the Supreme Court in 1979 and The State of
Punjab filed a suit in the Apex Court under Article 131 of the Constitution, challenging
validity of the orders of the Government dated 24 th March 1976 and challenged Section 78 of
the Punjab Reorganisation Act. The Government intervened, and an agreement was entered
into between the States in the presence of the Prime Minister of India on 31 st December 1981,
10 State of Haryana v. State of Punjab, AIR 2002 SC 685.
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whereby the surplus waters of River Beas were re-allotted and Clause (IV) of the agreement
stated that the canal in the territory of Punjab would be constructed within a period of two
years from the date of signing of the agreement, in a manner that would enable the State of
Haryana to draw its allocated share of water. The agreement also provided for withdrawal of
suit by both States from the Supreme Court, thereby both suits were withdrawn on 12 th
February 1982.
However, on 5th November 1985, The Punjab Legislative Assembly passed a resolution
repudiating the agreement dated 31st December 1981. The Prime Minister of India intervened,
and a settlement was arrived at between the Prime Minister and State of Punjab, the
settlement stated that the SYL Canal would be constructed by 15th August 1986.

In accordance with the settlement, the issues relating to the usage, share and allocation of the
Ravi-Beas waters were referred for adjudication to a Water Tribunal under the notification of
2nd April 1986. The tribunal submitted its report to the Central Government on 30 th January
1987 indicating that Punjab should complete its part of construction of the canal
expeditiously. In July 1990, although over 90% of the construction of the canal within the
State of Punjab had been completed, it had been completely stopped. Due to the construction
not being completed, Haryana had been denied several hectares of irrigation potential as well
as agricultural production equivalent to a value of 5000 crore rupees. After inaction by the
State of Punjab towards construction and a clear expression of the intention of not proceeding
with the work of the construction of the SYL Canal, Haryana filed a suit under Article 131 of
the Constitution of India against the State of Punjab and the Union of India.
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CONTENTIONS OF THE PLAINTIFF

It was contended by the State of Haryana that the SYL Canal was the lifeline of the farmers
of Haryana and they depended on the waters of Ravi Beas for their livelihood, and
completion of the canal would enable the State of Haryana to receive its share of waters of
the rivers Ravi and Beas.

In view of the above, the State of Haryana asked for the following reliefs from the Supreme
Court:

That the Court pass a decree declaring that the order dated 24 th March 1976, the agreement
dated 31st December 1981 and the settlement dated 24th July 1985 are final and binding on the
State of Punjab.

That the Court pass a decree of mandatory injunction compelling the State of Punjab to
discharge its obligations under the agreement and settlement by immediately restarting and
completing the remaining portion of the SYL Canal in the State of Punjab, failing which the
Union should act to complete the canal.11

11 State of Haryana v. State of Punjab, AIR 2002 SC 685.

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CONTENTIONS OF THE DEFENDANT

The State of Punjab filed several preliminary objections:

It was contended that the jurisdiction of the Supreme Court was barred as the dispute fell
within the definition of water disputes as stated in the Inter-State Water Disputes Act, 1956.
On a combined reading of Section 11 of the Inter-State Water Disputes Act and Article 262 of
the Constitution of India, the jurisdiction of the Supreme Court is barred.

It was contended that the validity of the order dated 24 th March 1976 and the agreement dated
31st December 1981, had been challenged before the Ravi-Beas Water Tribunal and the report
of the said tribunal had not become final as the application filed by the State of Punjab under
Section 5(3) of the Act had not yet been disposed of.

It was further contended that since a suit had been filed in 1979, having been withdrawn
without leave of the Court, the present suit was barred under Order 23 Rule 1 of the Code of
Civil Procedure.

The State of Punjab also rejected all of Haryana’s claims and stated it had at no stage,
committed itself to the construction of the SYL Canal.

Union of India stated that the relief claimed by Haryana could only be against State of
Punjab, and there was no obligation on part of the Government of India to take up the
construction work of the SYL Canal, it however stated that the construction of the canal was
essential and must be completed at the earliest.12

12 State of Haryana v. State of Punjab, AIR 2002 SC 685.

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ISSUES FRAMED
Whether in the facts and circumstances of the case, defendant No. 1 (the State of Punjab) and
alternatively, defendant No. 2 (the Union of India), were and are bound to construct and
complete in a time-bound manner, the Sutlej-Yamuna Link Canal Project, in the Punjab
portion/territory and whether the plaintiff (State of Haryana) is entitled to the reliefs prayed
for against the defendants?

Is the suit not maintainable as contended in the written statements?

Is the suit barred by limitation?13

13 State of Haryana v. State of Punjab, AIR 2002 SC 685.

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JUDGEMENT
Regarding the maintainability of the suit, the Court stated that the dispute was regarding the
construction of the SYL Canal which has absolutely no connection with the sharing of water
between the States and is not a “Water Dispute” and however wide the meaning of the
expression “Water Dispute” be given, the construction of the canal which was the subject
matter of the dispute could not be held to be a water dispute within the meaning of Section 2
(c) of the Inter State Water Disputes Act and hence the suit would be maintainable.

Regarding the suit being barred by limitation, the Court answered the issue in favour of the
State of Haryana as the State of Punjab itself did not press the issue seriously.

Regarding the res judicata argument of State of Punjab, the Court stated that since there was
no decision of the Court before withdrawal of suits and no application of judicial mind, Order
23 Rule 1 of the Civil Procedure Code would not be applicable and the Supreme Court would
have jurisdiction to decide on the dispute.

The Court, by way of a mandatory injunction, directed the State of Punjab to complete the
construction of the SYL Canal within one year of the date of judgement, and directed the
Government of India to implement the injunction and if the canal was not constructed within
a year, the Union Government was to get it done through its own agencies as expeditiously as
possible.
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AFTERMATH
The State of Punjab, instead of finally complying with the order and constructing the canal,
filed a suit before the Supreme Court in 2003 seeking discharge and dissolution of the
obligation to construct the SYL Canal as directed, which was dismissed by the Court by its
judgement dated 4th June 200414. In the judgement, the Court directed the Union of India to
mobilize a central agency to take control of the canal works within one month and the State
of Punjab was directed to handover the construction to the Central Agency within two weeks
thereafter.

On 12th July 2004 the State of Punjab enacted the Punjab Termination of Agreements Act,
2004 terminating and discharging the Government of Punjab from its obligation under the
agreement dated 31st December 1981 and all other agreements relating to waters of Ravi-
Beas.

As a result, the President of India made a reference to the Supreme Court of India for its
advisory opinion under Article 143 of the Constitution of India on the following questions:

Whether the Punjab Termination of Agreements Act, 2004 and the provisions thereof are in
accordance with the provisions of the Constitution of India;

Whether the Punjab Termination of Agreements Act, 2004 and the provisions thereof are in
accordance with the provisions of Section 14 of the Inter-State Water Disputes Act, 1956,
Section 78 of the Punjab Reorganisation Act, 1966 and the Notification dated 24th March
1976 issued there under;

Whether the State of Punjab had validly terminated the agreement dated 31.12.1981 and all
other agreements relating to the Ravi-Beas waters and is discharged from its obligation under
the said agreement(s); and

Whether in view of the provisions of the Act; the State of Punjab is discharged from its
obligations from the judgment and decree dated 15.01.2002 and the judgment and order dated
4.6.2004 of the Supreme Court of India.15

The Supreme Court while deciding the matter cited Mullaperiyar Environmental Protection
Forum v. Union of India16, where the position of law was stated as follows: “Where a dispute

14 State of Punjab v. State of Haryana, (2004) 12 SCC 673.

15 In Re: The Punjab Termination of Agreements Act, 2004, (2017) 1 SCC 121.
16 Mullaperiyar Environmental Protection Forum vs. Union of India (UOI) and Ors., (2006) 3 SCC 643.
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between two States has already been adjudicated upon by this Court, which it is empowered
to deal with, any unilateral law enacted by one of the parties that results in overturning the
final judgment is bad not because it is affected by the principles of res judicata but because it
infringes the doctrine of separation of powers and Rule of law, as by such law, the legislature
has clearly usurped the judicial power.”17 Citing this, the Court held that the State of Punjab
had exceeded its legislative power in attempting to nullify the decree of this Court and held
the Punjab Act to be violative of the provisions of the Constitution of India and hence invalid.
It further held that an agreement having been held valid by a tribunal as well the highest
judicial authority could not be unilaterally terminated, and such termination would be
contrary to the Constitution of India and to the provisions of the Inter State Water Disputes
Act, 1956. This decision came on 10th November 201618, whereby the agreement dated 31st
December 1981 was held to be valid and enforceable.

17 Ibid.
18 In Re: The Punjab Termination of Agreements Act, 2004, (2017) 1 SCC 121.
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CONCLUSION
The analysis of this case clearly leads to the conclusion that there has been a complete
institutional failure to address the problem at hand for a disproportionately large period in a
manner that is fair to all stakeholders involved. Political motives like an intent to protect the
vote bank lead to great inaction on part of both the Union Government and State
Governments. Even though action was recommended and compelled through every medium
possible, it was not implemented by the executive due to political motives, or the executive
itself was made redundant through opposing action of the legislature.

This case is an indication of the failure to balance the separation of powers between the
legislature, executive and judiciary, with the executive being able to delay action on the
construction of one canal for over 50 years. Even now, though the Supreme Court has held
the Punjab Act unconstitutional, it is not ensured that Punjab shall complete construction of
the canal, yet again no executive branch has been incorporated to ensure the final award is
respected. This issue has just revolved around formation of numerous committees and
regulatory authorities, but a real solution has not been found. The 50-year delay due to
inaction has also resulted in great inefficiency, causing a loss of income to both States as well
as the Government in the form of high litigation costs, loss of income to Haryana due to non-
construction of the canal, and costs incurred by the Union of India in the several attempts at
reconciliation. Several cases like this can have a serious negative impact on the economy as
well as growth of the country.

There is a clear need to reform the inter State water dispute redressal system, as the current
Indian water-dispute settlement mechanisms are ambiguous and opaque. A cooperative
bargaining framework suggests that water can be shared efficiently, with compensating
transfers as necessary, if initial water rights are well-defined, and if institutions to facilitate
and implement cooperative agreements are in place.

One way to solve the water related problems in India is the inter linking of river waters in
India. The Government of India has been working on such a project, though difficult, it is not
impossible. If rivers are interlinked, all States can fulfil their water requirements with ease
and without conflict.

Amendments to the Inter-State Water Disputes Act are also clearly required, whereby, the Act
must clearly mention when the jurisdiction of Courts is barred and when it is not, so that
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Courts may deal with arguments regarding jurisdiction more expeditiously, saving time of the
Courts. A clear time frame must be mentioned for decision on the dispute by the Tribunal.
Another important modification is making the Tribunal equal to the Court for better
enforcement of awards. To prevent inordinate delays in the constitution of tribunals, Courts
can be given the power to order setting up of tribunals for any relevant dispute between
States. One important change that will have an impact on water dispute is the setting up of a
permanent tribunal instead of Ad-Hoc tribunals for every dispute. It would also be an
improvement if a Board or Central Authority is set up through a statute which would have
complete control over the use, distribution and control of interstate river waters. Scientific
methods and economically efficient methods to decide share of water between States must
also be incorporated into the Act, since environmental considerations have also gained
considerable importance in today’s context.
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BIBLIOGRAPHY

CASES

 In Re: The Punjab Termination of Agreements Act, 2004, (2017) 1 SCC 121.

 Mullaperiyar Environmental Protection Forum v. Union of India (UOI) and Ors.,

(2006) 3 SCC 643.
 State of Punjab v. State of Haryana, (2004) 12 SCC 673.

CONSTITUTION
 Article 262, Constitution of India, 1950.

STATUTES
 Inter-Water Disputes Act, 1956.
 River Boards Act, 1956.