DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE

INTER-STATE WATER DISPUTE IN INDIA

SUBJECT

POLITICAL SCIENCE I

NAME OF THE FACULTY

PROF T.Y. NIRMALA

Name of the Candidate: AMANDEEP MALIK

Roll No: 19LLB076

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 Semester: 1

ACKOWLEDEGEMENT

I would like to express my special thanks of gratitude to my teacher T.Y. NIRMALA mam,
who gave me the opportunity to do this wonderful project on the topic INTER-STATE
WATER DISPUTE IN INDIA, which also helped me in doing a lot of research and I came to
know about so many new things about problems which are faced by the country.

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 TABLE OF CONTENTS

ABSTRACT.........................................................................................................................................4
SYNOPSIS...........................................................................................................................................5
1. INTRODUCTION...........................................................................................................................6
1.1. Importance of Water................................................................................................................6
1.2. Origin.........................................................................................................................................6
2. THE ECONOMICS OF WATER..................................................................................................7
3. LEGAL THEORIES AND INSTITUTIONS.................................................................................8
3.1. Doctrine of Riparian Rights....................................................................................................8
3.2. Theory of absolute territorial sovereignty or the Harmon Doctrine.....................................8
3.3. Theory of prior appropriation.................................................................................................8
3.4. Theory of Community of Interest............................................................................................9
3.5. Doctrine of equitable apportionment......................................................................................9
3.6. Theory of equitable utilization of Inter-State river waters:.................................................10
4. INTER-STATE RIVER WATER DISPUTES IN INDIA.........................................................10
5. LEGISLATIVE MECHANISMS.................................................................................................11
6. CASE STUDIES FROM INDIA...................................................................................................14
6.1. The Narmada River................................................................................................................14
6.2. Krishna-Godavari water dispute...........................................................................................14
6.3. The Cauvery dispute...............................................................................................................16
6.4. The Ravi-Beas dispute............................................................................................................17
7. BARGAINING AND INVESTMENT..........................................................................................18
8. PROPERTY RIGHTS, POLITICS AND INFORMATION......................................................19
8.1. Political objectives..................................................................................................................20
8.2. Incomplete Information..........................................................................................................20
9. RECOMMENDATIONS...............................................................................................................21
10. CONCLUSION............................................................................................................................22
BIBLIOGRAPHY..............................................................................................................................24

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 ABSTRACT

Fresh water resources are essential for the survival of mankind. The domestic, agricultural
and industrial uses of water are multiplying day by day and the pressure of the ever-
increasing population, scarcity and unequal distribution of water have surrounded it in an area
of continued conflict and debate. This conflict becomes even more highlighted in federal
systems like India and the United States of America because in both these countries majority
of the rivers are inter-state and the states have substantial power over the water resources,
frequently resulting in inter-state disputes. Considering the importance of inter-state water
sharing, it becomes an area of great concern in maintaining the federal spirit and better
Union-State and inter-State relations. Constructing efficient and equitable mechanisms for
sharing inter-state river waters has long been an important legal and constitutional issue in
federal countries. We shall look, in detail, in this study various constitutional and legal
provisions, history of inter-state water disputes and case studies of each country and doctrines
that have been devised to resolve inter-state water disputes and their short comings and
suggest improvement, wherever possible. Our endeavor is to evolve most efficient and fair
mechanisms for sharing inter-state river waters. We argue that these impacts can be reduced
by a more efficient design of mechanisms for negotiating inter-state water disputes: some of
the possibilities include a national water commission independent of daily political pressures,
a federated structure incorporating river basin authorities and water user associations, and
fixed time periods for negotiation and adjudication.

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 SYNOPSIS

OBJECTIVE OF STUDY:

1. To explain the various inter-state water dispute in India.

2. To explain the importance and economic use of water.

RESEARCH QUESTION:

The research question helped in providing adequate emphasis to the core issue of the research
and based on the issue the research study use to be conducted. Therefore, as the research
question focus on the core issue of the research study, it plays important role in this study.

1. how the problem of inter-state water dispute can be solved.

RESEARCH METHODOLOGY:

The study is based on the doctrinal method of research and both primary and secondary
sources are taken into consideration while making it like websites, books, and other internet
sources. The type of study done here is descriptive and explanatory study. This research
process deals with collecting & analysing information within the boundaries of the topic.

LITERATURE REVIEW:

The researcher has taken information from various books, web sources, articles, journals, and
case laws to explain the inter-state water dispute in India.

SCOPE OF STUDY:

The scope of study is wide because here we are not only discussing one particular water
dispute but all water disputes in India that’s why the scope of study is wide.

SIGNIFICANCE OF STUDY:

This project helps to understand the importance of water and what is the reason behind the
inter-state water dispute.

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1. INTRODUCTION

1.1. Importance of Water

There is no denying that even in present day, water is turning into a critical factor in the
financial improvement of the states and since financial advancement influences the social
improvement likewise, this factor gains still higher noteworthiness. The residential, rural and
mechanical employments of water are duplicating step by step and this exceptional increment
sought after for water in differing fields has brought about its shortage. The weight of the
regularly expanding populace and the danger of shortage and unequal circulation of water – a
limited, pre-prominent normal asset – have encompassed it in a region of proceeded with
struggle and discussion. This contention turns out to be even more featured in government
frameworks like India and the United States of America in light of the fact that in both these
nations dominant part of the waterways are between state and the states (units comprising the
alliance) have considerable control over the water assets, every now and again bringing about
between state debate. Considering the significance of between state water sharing, it turns
into a region of awesome worry in keeping up the government soul and better Union-State
and Inter-State relations. Building proficient and evenhanded components for sharing
between state waterway waters has for some time been a critical legitimate and sacred issue
in every government nation. We will look, in detail, in this paper different established and
legitimate arrangements, history of between state water question and contextual
investigations of India and regulations that have been concocted to determine between state
water question and their weaknesses and recommend change, wherever conceivable. Our
undertaking is to develop most effective and reasonable systems for sharing between state
stream water.

1.2. Origin

Since vast territories of India are generally bone-dry, components for designating rare water
are fundamentally essential to the welfare of the nation's residents. Water adds to welfare in
several ways: wellbeing (e.g. clean drinking water), farming (e.g., water system), and
industry (e.g., hydroelectric control). Since India is a government majority rule government,
and in light of the fact that waterways cross state boundaries, building productive and
impartial components for apportioning stream streams has long been a critical legitimate and
protected issue. Various between state stream water question have erupted since freedom.
This methodology was embraced simply after prior intervention by the Supreme Court had

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fizzled. Not all debate have glad endings, nonetheless: for example, the bigger question
among Karnataka and Tamil Nadu over the waters of the Cauvery rages on. Between state
water question keep on rotting. Such debate are a relentless phenomenon in India. Part of the
trouble is the plenty of performing artists and the multifaceted nature of the institutional
environment inside which the different gatherings reach (or neglect to achieve) assertion.
Performing artists include state governments (which thusly should be disintegrated into
expert lawmakers, political parties, and intrigue gatherings), the national parliament, focal
services, the courts, and Ad hoc water councils. These on-screen characters consult inside a
rich institutional setting. When all is said in done, waterway water disputes have included
state and focal lawmakers, and additionally the courts and extraordinary councils and
commissions set up to parley debate. Albeit genuinely unequivocal established arrangements
govern between state waterway waters, it is misty in the case of existing components for
adjudicating interstate water question are productive. Without a doubt, there is developing
agreement that existing institutions are progressively neglect to create results which add to
monetary development and national welfare. Our examination looks to figure out which game
plans for compromise are more successful (i.e., more inclined to yield a satisfactory result)
and more productive.

2. THE ECONOMICS OF WATER

It is generally perceived that water has various highlights that make potential market
disappointment. These may incorporate non-contention, non-excludability, externalities,
justify great highlights, and critical exchanges costs. The nearness of these variables implies
that albeit expanded dependence on market powers (e.g., one state pitching water to another)
can contribute essentially to settling water issues, there is no getting away from the
requirement for gatherings to concur upon an arrangement of standards, an implementation
component, and an earlier circulation of property rights. Property rights have been asserted
based on chronicled use, and additionally based on the "Harmon Doctrine", that "what falls
on our rooftop is our own to use, without respect to any potential mischief to downstream
gatherings". Authentic utilize can neutralize exchanging water rights, while the Harmon
convention overlooks externalities and past speculations associated with water utilize. A third
methodology, that of the social get a la Thomas Hobbes, holds more guarantee. An
arrangement must be struck among the current basic leadership elements, for example, Indian
states, which settles on an underlying portion of property rights and makes a component to
exchange these rights, to manage utilizes that create externalities, and so on. Thus,

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organizations that help proficient haggling and can authorize authoritative assertions are
basic.

3. LEGAL THEORIES AND INSTITUTIONS

Initial claims to water in negotiations are often justified in terms of one of several simple
legal doctrines. We may identify six such "theories" or legal doctrines

3.1. Doctrine of Riparian Rights: Etymologically the term “ripa” means, the bank of
stream or “the bank of a river”. Thus, the land to be riparian must have the stream flowing
over it and along its borders. The doctrine of riparian rights emphasizes the recognition of
equal rights to the use of water by all owners of land abutting a river, as long as there is no
resulting interference with the rights of other riparian owners1. The doctrine is not of much
use in the context of inter-state river water disputes. The Krishna Water Disputes Tribunal
observed that, “the doctrine of riparian rights governs the rights of the private parties, but
does not offer a satisfactory basis for settling the inter-state water disputes.”2

3.2. Theory of absolute territorial sovereignty or the Harmon Doctrine. Under this
doctrine, a riparian state can do what it pleases with its waters without regard to its effect on
other co-riparian state and no riparian state has a right to demand the continued flow of water
from other states3. This doctrine was evolved by Attorney General Harmon, of the US in
1896, to justify the action of the United States in reducing the flow of the river Rio Grande
into Mexico. This theory represents one sided extreme view and is not of much use in the
context of inter-state river water disputes.

3.3. Theory of prior appropriation. This theory says that the first user who puts the water to
beneficial use establishes a prior right and subsequent users can only appropriate what is left
by the first user. This doctrine allocates property rights to water on the basis of historical use.
This theory was developed in the arid and semi-arid parts of USA, where severe shortage of
water was faced from the beginning of the settlement 4. This doctrine is also not treated as the
acceptable law in India.

1
Jain S.N., Alice Jacob and S.C. Jain, Inter-State Water Disputes in India, N.M. Tripathi Pvt. Ltd.,
Bombay,1971, at p. 151
2
Report of the Krishna Water Disputes Tribunal, with Decision, Vol. 1, 1973, at p.93

3
Jacob, Austin, “Canadian-United States Practice and Theory Respecting the International Law of International
Rivers: A Study of the History and Influence of the Harmon Doctrine”, Canadian Bar Review No.3 (Sept 1959)
at Pp. 405-411 (1959)
4
Wyoming v. Colorado 259 U.S. 419 (1922)

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3.4. Theory of Community of Interest. According to the theory of community of interest, a
river passing through several States is one unit and should be treated, as such, for securing the
maximum utilization of its waters. Its smooth implementation would seem to require mutual
agreement. The Kosi project (India and Nepal) is often cited as an example of the adoption of
this approach.

3.5. Doctrine of equitable apportionment. The doctrine of equitable apportionment seems

to have originated in the United States, as is illustrated by the decision of the US Supreme
Court in the case of Connecticut Vs. Massachusetts 5, wherein it was held that “inter-state
water disputes should be settled on the basis of equality of rights”. Similar stand was also
reiterated in the cases of New Jersey Vs. New York 6, and Nebraska Vs. Wyoming7. The
theory of equitable apportionment conceptually embodies the following elements:

1. Firstly, the equality of rights does not mean the right to equal division of water literally. On
the other hand it means the right of each co-basin or co-riparian state to share in the said
basin or inter-state waters on the basis of various factors including, inter alia, its social and
economic needs consistent with the corresponding rights of other co-basin or co-riparian or
concerned states etc.

2. Secondly, this concept is a utilitarian one.

3. Thirdly, equitable apportionment is concerned with the beneficial use of concerned waters.

Equitable apportionment in India

The theory of equitable apportionment has been recognized in India also – though, at the
same time, its vagueness has also been taken note of. Here are few examples:

(a) The Indus Commission (1943)8 recorded its views as under:

a. The most satisfactory settlement of such disputes is by agreement.

5
5 282 US 670 (1931)
6 283 US 336 (1931)
7 332 US 54 (1945)
8 The Indus Commission Report (1943) at Pp. 5-75
6

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b. Failing agreement, the rights of the parties must be determined by applying the rules of
equitable apportionment, each unit getting a fair share of the water of the common river.

c. However, equitable sharing, once made, may cease to be equitable, in the face of new
circumstances.

(b) The Krishna Water Disputes Tribunal Report9 took note of the position, as under:

“In India also, the rights of States in an inter-State water dispute are determined by applying
the rule of equitable apportionment, each unit getting a fair share of the waters of the
common river.” But the Krishna Tribunal also noted that the concept does not lend itself to
precise formulations and its meaning cannot be written into a code that can be applied to all
situations and at the all times.

(c) The Narmada Water Disputes Tribunal10 did accept the doctrine of equitable
apportionment as applicable. In fact, it acknowledged that the diversion of water of an inter-
State river outside the river basin was legal and the need for diversion of water to another
basin may be a relevant factor on the question of equitable apportionment, in the
circumstances of a particular case.

3.6. Theory of equitable utilization of Inter-State river waters: This theory stresses that
each basin state should be entitled to “a reasonable and equitable share in the beneficial uses
of water of a river basin. It may be fruitful to point out here that the Helsinki Rules, adopted
by the International Law Association in 1966 at Helsinki have provided a status and
authenticity to this theory. According to Article 4, “each basin state is entitled, within its
territory, to a reasonable and equitable share in the beneficial use of the water of an
international drainage basin.” Article 5 sets out 11 factors which will determine “a reasonable
and equitable share”, such as the geography of the basin, the hydrology of the basin,
including the contribution of water by each basin state, the climate affecting the basin,
population, economic and social needs of each basin state etc.

4. INTER-STATE RIVER WATER DISPUTES IN INDIA

There are more than twenty major river systems in India. Speaking in terms of Indian
federalism, most of the rivers in India are inter-state rivers as they flow through the territories

9
9 The Krishna Water Disputes Tribunal Report (1973) at Pp. 52, 93
10 The Narmada Water Disputes Tribunal Report (1978) Vol. 1 atPp. 109-113
10

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of more than one state within India. The inter-state character of the Indian rivers has given
rise to a number of disputes between the federal units at inter-state level.

5. LEGISLATIVE MECHANISMS

System under the Indian Constitution of 1950

Under the Indian Constitution of 1950, States have power to legislate (State list, entry 17),
with respect to the following subject: “17. Water, that is to say, water supplies, irrigation and
canals, drainage and embankments, water storage and water power, subject to the provisions
of Entry 56 of List 1.” Union list, entry 56, reads as under: “56. Regulation and development
of inter-State rivers and river valleys, to the extent to which such regulation and development
under the control of the Union is declared by Parliament by law to be expedient in the public
interest.”

The relevant provisions of the Indian Constitution are

• Entry 17 in the State List,

• Entry 56 in the Union List, and

• Article 262.

The first provision makes water a state subject, but qualified by Entry 56 in the Union List,
which states: "Regulation and development of inter-state rivers and river valleys to the extent
to which such regulation and development under the control of the Union is declared by
parliament by law to be expedient in the public interest." Article 262 explicitly grants
parliament the right to legislate over the matters in Entry 56, and also gives it primacy over
the Supreme Court. As documented by Iyer (1994), parliament has not made much use of
Entry 56. Various River Authorities have been proposed, but not legislated or established as
bodies vested with powers of management. Instead, river boards with only advisory powers
have been created. Hence, the state governments dominate the allocation of river waters.
Since rivers cross state boundaries, disputes are inevitable. The Inter-State Water Disputes
Act of 1956 was legislated to deal with conflicts, and included provisions for the
establishment of tribunals to adjudicate where direct negotiations have failed. However,
states have sometimes refused to accept the decisions of tribunals. Therefore, arbitration is
not binding. Significantly, the courts have also been ignored on occasion. Finally, the center
has sometimes intervened directly as well, but in the most intractable cases, such as the

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sharing of the Ravi-Beas waters among Haryana, Jammu and Kashmir, Rajasthan, and
Punjab, central intervention, too, has been unsuccessful.

In summary, an unambiguous institutional mechanism for settling inter-state water disputes

does not exist. Nevertheless, water disputes are sometimes settled. Economic analysis is
necessary to illuminate whether and how water disputes get resolved in India.

Article 262

Article 262 of the Constitution reads as under: “262. Adjudication of disputes relating to
waters of inter-State rivers or river valleys: (1) Parliament may by law provide for the
adjudication of any dispute or complaint with respect to the use, distribution or control of the
waters of, in any inter-State river or river valley. (2) Notwithstanding anything in this
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 as is referred to in
clause (1)”

The first provision makes water a state subject, but qualified by Entry 56 in the Union List.
Article 262 explicitly grants parliament the right to legislate over the matters in Entry 56, and
also gives it primacy over the Supreme Court. However, the parliament has not made much
use of Entry 56. Various River Authorities have been proposed, but not legislated or
established as bodies vested with powers of management. Instead, river boards with only
advisory powers have been created.11 Hence, the state governments dominate the allocation of
river waters. Since rivers cross state boundaries, disputes are inevitable in this institutional
setting. The Inter-State Water Disputes Act of 1956 was legislated to deal with conflicts, and
included provisions for the establishment of tribunals to adjudicate where direct negotiations
have failed. However, states have sometimes refused to accept the decisions of tribunals.
Therefore, arbitration is not binding. Significantly, the courts have also been ignored on
occasion. Finally, the center has sometimes intervened directly as well, but in the most
intractable cases, such as the sharing of the Ravi-Beas waters among Haryana, Jammu and
Kashmir, Rajasthan, and Punjab, central intervention, too, has been unsuccessful. An
unambiguous institutional mechanism for settling inter-state water disputes does not exist.12

11
Iyer, R.R., Federalism and Water Resources, Economic and Political Weekly, March 26, 1994, at Pp. 733-738
12
Richards, Alan & Singh, Nirvikar, Inter State Water Disputes in India: Institutions and Policies. Department
of Environmental Studies & Department of Economics, University of California (2001), at p. 5

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The Inter-State Water Disputes Act, 1956

Pursuant to the power conferred by the Constitution (article 262), Parliament has enacted the
Inter-State Water Disputes Act, 1956. Its main features can be thus summarised:

i. A State Government which has a water dispute with another State Government may request
the Central Government to refer the dispute to a tribunal for adjudication.

ii. The Central Government, if it is of opinion that the dispute cannot be settled by
negotiation, shall refer the dispute to a Tribunal.

iii. The Tribunal’s composition is laid down in the Act. It consists of a Chairman and two
other members, nominated by the Chief Justice of India from among persons who, at the time
of such nomination, are Judges of the Supreme Court.

iv. The Tribunal investigates the matter and makes its report, embodying its decision. The
decision is to be published and is to be final and binding on the parties.

v. Jurisdiction of the Supreme Court and other courts in respect of the dispute referred to the
Tribunal is barred.

The River Boards Act of 1956

The River Boards Act, 1956, provides for the establishment of River Boards, for the
regulation and development of inter-State rivers and river valleys. Briefly the procedure
under the Act can be summarized as follows:

i. On a request received from a State Government or otherwise, the Central Government may
establish a Board for “advising the Government interested” in relation to such matters
concerning the regulation or development of an inter-State river or river valley (or any
specified part) as may be notified by the Central Government.

ii. Different Boards may be established for different inter-State rivers or river valleys.

iii. Functions of the Board are very wide, covering conservation of the water resources of the
inter-State river, schemes for irrigation and drainage, development of hydro-electric power,
schemes for flood control, promotion of navigation, control of soil erosion and prevention of
pollution. But the functions of the Board are advisory and not adjudicatory.

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6. CASE STUDIES FROM INDIA

6.1. The Narmada River

A second important dispute, also the most publicized of all the water disputes in India, is the
Narmada water dispute among the states of Madhya Pradesh, Maharashtra and Gujarat. The
project has been controversial because of the large population displaced by the reservoir and

the failure to adequately compensate this population. The Narmada Water Disputes Tribunal
was constituted as early as 1969 but the tribunal issued its findings in December 1979. The
tribunal determined the utilizable quantum of waters of the Narmada at the Sardar Sarovar
dam site on the basis of 75% dependability and allocated the available water to the three
states on the basis of equitable apportionment after protecting the existing demand for
irrigation.

The tribunal also addressed the proportionate sharing of water in surplus and deficit years,
construction of the Sardar Sarovar dam, sharing of power benefits from the proposed dam
and the sharing of capital, operation and maintenance costs of the dam among the states in
proportion to the power benefits allocated to each. The resettlement and rehabilitation of the
people living in the dam submergence area was addressed, and required payment by Gujarat
(the major beneficiary) to Madhya Pradesh and Maharashtra of all costs incurred in acquiring
the land to be submerged. The order also established the Narmada Control Authority for the
purpose of securing compliance with the tribunal award (NWDT 1979) 13. Summarizing the
Narmada case, the tribunal’s judgment was quite complete, covering water and power
allocation, resettlement of displaced populations (though with inadequate compensation) and
the distribution of project costs on the basis of benefits received. However, failure of the
planners and the tribunal to consider alternatives (tributary dams, conjunctive groundwater–
surface water use, and conservation in agriculture) led to high costs and inequitable treatment
of the affected populations. Revision of the judgment is not allowed until 45 years have
passed.

6.2. Krishna-Godavari water dispute

The Krishna-Godavari water dispute among Maharashtra, Karnataka, Andhra Pradesh (AP),
Madhya Pradesh (MP), and Orissa could not be resolved through negotiations. Here
13
Bakshi, P.M., “A Background Paper on Article 262 and Inter-State Disputes Relating to Water” (National
Commission for the Review Working of the Constitution) available online:
http://lawmin.nic.in/ncrwc/finalreport/v2b3-6.htm

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Karnataka and Andhra Pradesh are the lower riparian states on the river Krishna, and
Maharashtra is the upper riparian state. The dispute was mainly about the inter-state
utilization of untapped surplus water. The Krishna Tribunal reached its decision in 1973, and
the award was published in 1976. The Tribunal relied on the principle of “equitable
apportionment” for the actual allocation of the water. It addressed three issues:

(1) The extent to which the existing uses should be protected as opposed to future or
contemplated uses.

(2) Diversion of water to another watershed.

(3) Rules governing the preferential uses of water.

The Tribunal's rulings were as follows:

• On the first issue, the Tribunal concluded that projects that were in operation or under
consideration as in September 1960 should be preferred to contemplate uses and should be
protected. The Tribunal also judged that except by special consent of the parties, a project
committed after 1960 should not be entitled to any priority over contemplated uses.

• On the second issue, the Tribunal concluded that diversion of Krishna waters to another
waterline was legal when the water was diverted to areas outside the river basin but within
the political boundaries of the riparian states. It was silent regarding the diversion of water to
areas of non-riparian states.

• On the third issue the Tribunal specified that all existing uses based on diversion of water
outside the basin would receive protection.

The Godavari Tribunal commenced hearings in January 1974, after making its award for the
Krishna case. It gave its final award in 1979, but meanwhile the states continued negotiations
among themselves, and reached agreements on all disputed issues. Hence the Tribunal was
merely required to endorse these agreements in its award. Unlike in the case of other
tribunals, there was no quantification of flows, or quantitative division of these flows: the
states divided up the area into sub-basins, and allocated flows from these sub-basins to
individual states – this was similar in approach to the successful Indus agreement between
India and Pakistan. Another difference was that the agreement was not subject to review,
becoming in effect, perpetually valid.

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6.3. The Cauvery dispute

The core of the Cauvery dispute relates to the re-sharing of waters that are already being fully
utilized. Here the two parties to the dispute are Karnataka (old Mysore) and Tamil Nadu (the
old Madras Presidency). Between 1968 and 1990, 26 meetings were held at the ministerial
level but no consensus could be reached. The Cauvery Water Dispute tribunal was constituted
on June 2, 1990 under the ISWD Act, 1956. There has been a basic difference between Tamil
Nadu on the one hand and the central government and Karnataka on the other in their
approach towards sharing of Cauvery waters. The government of Tamil Nadu argued that
since Karnataka was constructing the Kabini, Hemavathi, Harangi, Swarnavathi dams on the
river Cauvery and was expanding the ayacuts (irrigation works), Karnataka was unilaterally
diminishing the supply of waters to Tamil Nadu, and adversely affect the prescriptive rights

of the already acquired and existing ayacuts. The government of Tamil Nadu also maintained
that the Karnataka government had failed to implement the terms of the 1892 and 1924
Agreements relating to the use, distribution and control of the Cauvery waters. Tamil Nadu
asserts that the entitlements of the 1924 Agreement are permanent. Only those clauses that
deal with utilization of surplus water for further extension of irrigation in Karnataka and
Tamil Nadu, beyond what was contemplated in the 1924 Agreement can be changed. In
contrast, Karnataka questions the validity of the 1924 Agreement. According to the
Karnataka government, the Cauvery water issue must be viewed from an angle that
emphasizes equity and regional balance in future sharing arrangements. There are several
reasons why the negotiations of 1968-1990 failed to bring about a consensus.

1) There was a divergence of interest between Karnataka and Tamil Nadu on the question of
pursuing negotiations. Karnataka was interested in prolonging the negotiations and thwarting
the reference to a tribunal, in order to gain time to complete its new projects.

2) The Cauvery issue became intensely politicized in the 1970s and 1980s. The respective
governments in the two states were run by different political parties. Active bipartisan politics
in both states made an ultimate solution more difficult.

3) Between 1968 and 1990, there were three chief ministers in Karnataka belonging to three
different political parties, while in Tamil Nadu, there were four chief ministers belonging to
two parties. There were two long periods of President’s Rule in Tamil Nadu. At the center,
there were six changes of Prime Minister, spanning four political parties and eight different

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Union Ministers of irrigation. So, consecutive occasions when the same set of ministers from
the same state and the center met were rare.

4) The ministerial meetings were held at regular intervals, but no attempt was made to
generate technical options to the sharing of Cauvery waters. Expert engineers were not able
to work together for a common solution; rather they got involved in party politics.

6.4. The Ravi-Beas dispute

The dispute between Punjab and Haryana about Ravi-Beas water started with the
reorganization of Punjab in November 1966, when Punjab and Haryana were carved out as
successor states of erstwhile Punjab. The four perennial rivers, Ravi, Beas, Sutlej and
Yamuna flow through both these states, which are heavily dependent on irrigated agriculture
in this arid area. An agreement was accepted in 1981 between these states. This agreement
however became a source of continued protest by the political opposition. These events led to
the constitution of a tribunal to examine the Ravi-Beas issue in 1986. The award has not been
notified, and does not have the status yet of a final, binding decision. Meanwhile the state of

Haryana took the dispute to the Supreme Court in State of Haryana v State of Punjab 14 also
known as the First SYL15 Canal case. After hearing the case the Supreme Court gave three
months‟ time to both the parties to reach an agreement. Then, on 15 January 2002, the
Supreme Court ordered Punjab to complete the SYL within six months, failing, which the
central government had to finish the task. The Punjab government filed an appeal for review,
which was rejected by the Court on 4 June 2004 with directions to the central government to
assign this work to the central agency. Accordingly, the central government entrusted the
CPWD the task to complete the SYL canal. On 2 July 2004, the Punjab government again
filed a special leave petition for review of its June 4, verdict. The Punjab state also contended
that this issue was not within the jurisdiction of the Supreme Court, as it was a water dispute
in the ambit of article 262 of the constitution. Ultimately, the Punjab was forced to
unilaterally abrogate all previous accords by passing an Act “Punjab Termination of
Agreement Act-2004” in Punjab Legislative Assembly, on 12 July 2004. On June 4,
200416the apex Court announced its final verdict on the SYL issue, the highlights of which
are as follows:-
14
14 AIR 2002 SC 685
15 Sulej-Yamuna Link
15

16
Second SYL Canal case: State of Haryana v State of Punjab, (2004) 12 SCC 673

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1. Since the Punjab Government had failed to complete the canal within the one year deadline
imposed by the January 15, 2002 verdict, so the Court directed the Centre to construct the
unfinished portion of the SYL canal.

2. The Punjab Government was also ordered to provide adequate security to the officials of
the executing agency and to the construction workers engaged by it.

3. The executing agency was directed to prepare a new map of the canal on the basis of a
fresh survey by keeping in mind that no damage was caused to the green belt falling in the
way.

However, there has been no progress in the matter since then and the Centre has not even
started the construction of the unfinished Canal. Thus the future of the Ravi-Beas dispute
hangs in uncertainty.

7. BARGAINING AND INVESTMENT

When the essential problem faced by states or groups within a state is that the initial
allocation of water is suboptimal due to changing circumstances, cooperative bargaining will
lead to an optimal allocation. The outcome of bargaining is not necessarily the same as the
outcome of market trading of water, but the existence of competitive markets may require
more stringent conditions to be satisfied, as Coase (1960) pointed out. A bargaining solution
will depend on threat points or disagreement payoffs. With multiple layers of decision-
makers, bargaining may have to occur at different levels: states bargain with each other, and
groups within a state also bargain. It is possible in some cases to reach the same outcome
regardless of the sequencing of the bargaining Richards and Singh, 1997). A significant
complication is that the productivity of a given quantity of water depends on the level of
complementary investments. These may be dams, irrigation projects, or even more general
complementary investments in agriculture. The first thing to note is that as long as the benefit
from a given amount of water is dependent on the amount of investment, it implies that the
optimal allocation of water depends on the investments in both states. Hence, even though
there are no direct externalities as a result of the investment, the conditional optimum of
water allocation involves a linkage of both states. What state A does with its investment will
affect the optimal amount of water that state B should receive. Now suppose that both
investments and the allocation of water are the subject of interstate negotiations. The outcome
of the negotiations will include a joint agreement on the allocation of water between the

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states, as well as a joint agreement on the levels of investment within the two states. This part
of the outcome will be invariant to the specific form of the negotiations, as long as the
cooperation on both dimensions is possible. While investments such as dams may plausibly
be the subject of inter-state negotiation, it is less likely that states are willing or able to
negotiate broadly over general investments that affect the utility or productivity of water in
the state economy. If investments are chosen non-cooperatively, externalities and strategic
considerations both create non-optimalities. The strategic motive for investment to affect
subsequent bargaining implies that there is a strong case for avoiding delays in negotiations
and agreements, as well as for making agreements permanent, or not subject to review,
provided that the information is available is relatively complete. This will tend to force
efficient investments. Unforeseen changes in costs and benefits can then be dealt with by
trading water, rather than reallocating quantities de novo.

8. PROPERTY RIGHTS, POLITICS AND INFORMATION

One can view much of the conflict or disagreement over inter-state river waters in India as an
attempt to influence or determine the initial allocation of property rights over water, by
methods such as lobbying. The initial quantities of water are not given, but are precisely the
main subject of negotiations. In many cases, there is some de facto allocation of rights based

on historical usage, but there is a surplus of currently unutilized water that can be used (often
only if appropriate investments are made) once it is unambiguously allocated. It is important
to recognize that in such cases, the situation is one of pure conflict: more for one party means
less for another when there is a given total amount of the resource. It is conceptually
important to separate out this sort of situation, therefore, from one where initial property
rights are well defined, and cooperation is potentially feasible. In particular, there is no
presumption that negotiation among the parties attempting to share water from a particular
river basin will lead to an agreement, and there is a clear role for a higher-level authority.
Thus the suggestion by some analysts of Indian cases that tribunals or courts create an
adversarial situation seems to miss the point: tribunals become necessary when the situation
is inherently adversarial. Consider the case of a tribunal allocating initial rights to water.
From one perspective, the case of a tribunal is not that different from a political lobbying
model. States expend effort to influence the tribunal, which makes its award accordingly. The
difference is in the nature of the states' efforts, the public nature of the process, and the

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objective function of the tribunal. It is the differing nature of accountability and transparency
that distinguishes the use of a tribunal.

8.1. Political objectives

Models of lobbying implicitly include some political considerations for the center, beyond
maximizing the joint welfare of the two parties to the dispute. It is possible to incorporate
such objectives, as well as self-interested behavior, more explicitly. Rather than the rather
passive role assigned to the center in the standard rent-seeking model, we can think of it
having its own objective function, and bargaining with the two states: the states have political
support to offer the center, in return for a favorable decision on the water issue. This seems to
be a key feature of the Indian institutions for settling interstate water disputes.

Clearly, each state will prefer the process--political negotiations or a tribunal--that will favor
it. There is no guarantee that the states will have unanimous preferences in this regard. Thus,
while each mechanism is designed to overcome the problem of resolving conflict in the
absence of property rights, the presence of alternative mechanisms raises the problem of
conflict over which mechanism to use. The problem is simply pushed back one step further,
and delays occur. Of course, in India it is specified that if negotiations fail, a tribunal must be
appointed. However, this is done at the discretion of the center and, in the above situation, the
center would actually prefer a political solution, where it barters an award for political
support. Reducing discretion, such as specifying short time limits for negotiation, with a
tribunal to take over thereafter, is essential in such a situation. Such a recommendation is an
old one: our analysis helps to make a more formal and transparent case for it.

The above framework can be used to analyze some additional problems with the political
bargaining case, even in the absence of a tribunal as an alternative. These problems arise due
to the uncertainty of political regimes (Richards and Singh, 1996). While water agreements
are typically very long term, or should be, to permit efficient investments, governments
change every few years. The relative value of political support from the two states becomes
an important parameter, since one of the states may prefer to postpone the agreement.

8.2. Incomplete Information.

An important issue in water negotiations in practice may be that each party has private
information. There are potentially two kinds of information: technical and subjective. In
principle, technical information may be shared and verified, but in practice this can be an

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arduous task, as the lengthy proceedings of Indian water tribunals seem to indicate. Estimates
of costs and benefits in general, as they enter the utility functions privately and subjectively,
may not be objectively verifiable. This complicates matters further.

9. RECOMMENDATIONS

Under the present scheme, if it is felt that a certain inter-State river, is a river of national
importance warranting Central planning or control or management, one of the two things can
be done: Parliament can pass a specific legislation under Entry 56 bringing that river within
the purview of Central action, or the Centre can set up a River Board for the river under the
River Boards Act, 1956. However, the practical reality is that the River Boards Act, 1956 has
remained a dead letter, with no board having been set up under it. Further, the Parliament has
not yet passed any specific Act under Entry 56 bringing any river within the purview of the
Centre. It is submitted that the reason behind this inaction is not legal or constitutional but
political: the states are unenthusiastic about River Basin Organizations or about allowing
Centre to play a larger role. Thus the Centre must usefully explore the political possibilities
of legislation under Entry 56, and of re-activating the River Boards Act. It is important to
point out that the disputing parties under the Inter-State Water Disputes Act, 1956 are the
state governments concerned and not the people. The Tribunal does not hear the farmers and
the other water users in the basin. It seems very desirable that any reform of the present
system of resolution of Inter-State water disputes should bring in the people as the interested
parties17. It is submitted that the tribunals under the Inter-State Water Disputes Act, 1956
need not follow court-like procedures. Instead they could adopt a constructive, consultative,
participatory, committee-style of functioning, something which the negotiated inter-state
compacts of the US have been able to achieve. While retaining the power of judicial decision
at the end, they could also function as conciliation agency.

Another recommendation being advanced is that in place of a complete bar of jurisdiction of

the Supreme Court (as provided in Article 262), a partial modification of the bar should be
worked out. The Inter-State Water Disputes Act, 1956 should be amended to provide for an
appeal to the Supreme Court against the Tribunal’s Order. Such a modification might
improve the prospects of compliance to some extent. It is submitted that this suggestion

17
Sankaran, Kamala, “Water in India: Constitutional Perspectives”, in Iyer, R.R., Water and its Laws in India,
Sage Publications India Private Limited, New Delhi (2009) at p. 17-31, See also D‟Souza, Radha, “Nation vs
Peoples: Inter-State Water Disputes in India‟s Supreme Court” at p. 58-93

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combines the advantages of our system of tribunals with those of the US system of a final
decision by the Supreme Court.18

10. CONCLUSION

With this background in mind, let us now discuss how efficient the present system is in
resolving inter-state river water disputes. Initially the conflict-resolution mechanism provided
by Article 262 and the Inter-State Water Disputes Act, 1956 seemed to be working well: The
Krishna, Godavari and Narmada Tribunals‟ Award can be regarded as successful instances of
operation of this conflict-resolution machinery. However, this system later ran into trouble. 19
In the Ravi-Beas case, political difficulties in implementing the award led to further reference
being made to the Tribunal (as provided for in the Act) in 1987 and in 2008 the matter is still
before the Tribunal. Meanwhile, Punjab enacted legislation terminating all water accords; this
gave rise to some legal and constitutional issues; on these the Central Government made a
Presidential reference under Article 143 to the Supreme Court, to which the Supreme Court
has not yet given its opinion.

The history of operation of the Inter-State Water Disputes Act, 1956, has led to serious
dissatisfaction with adjudication as a means of resolving Inter-State water disputes. Broadly
speaking, there are four main criticisms of the prevailing adjudication process under the Inter-
State Water Disputes Act, 1956:

a) Adjudication is not the appropriate means of settling such disputes, a negotiated agreement
would be much better. It is to be noted that Article 262 and the Inter-State Water Disputes
Act, 1956 do not force adjudication on the disputing parties, nor do they preclude recourse to
negotiation, conciliation or mediation; but when all these efforts fail, disputes still have to be
resolved, a last resort mechanism is needed for the purpose. This is what Article 262 and the
Inter-State Water Disputes Act, 1956 provide.

b) There are no water sharing principles at the national level to guide the adjudication
process.

c) The adjudication system under the Article 262 and the Inter-State Water Disputes Act,
1956 is very dilatory and cumbersome. Delays at every stage certainly presented a serious
problem in the past. The Sarkaria Commission made some recommendations in this regard,

18
Iyer, R.R., “A Synoptic survey and Thoughts on Change”, in Iyer, R.R., Water and its Laws in India, Sage
Publications India Private Limited, New Delhi (2009) at p. 576-577
19
Iyer, R.R., Water and its Laws in India, Sage Publications India Private Limited, New Delhi (2009) at p. 573

22 | P a g e
and after prolonged consideration, they have been implemented through the amendments of
200220. Now the Central Government has to establish a tribunal within a year after a State
Government asks for one. The tribunal has to deliver its award in three years, but can seek an
extension of two years, making a total of five years in all. However, it seems probable that
after the amendments of 2002, the problem of delays at the various stages is likely to be
substantially diminished.

d) There are no effective means of ensuring compliance with the final decision. Although the
Award of an Inter-State Water Disputes tribunal is said to be final and binding, there are no
means of ensuring compliance with it. If a State Government refuses to obey the Order of
such a Tribunal, there are not many courses open to the other parties to the dispute or even to
the Central Government. The Centre can give directions, but if these too are not complied
with, what sanctions are available? Article 356 (Central rule) is an extreme measure and
cannot be lightly used, and in any case, what will happen when a popular government
returns? The Sarkaria Commission had recommended the words „final and binding‟ in the
Act should be buttressed by conferring upon the Tribunal‟s Order the status of an Order or
Decree of the Supreme Court, and this has been done through the 2002 amendment.
However, this seems to have had no perceptible effect.

Government of India, (1988), Report of the Commission on Centre-State Relations (Sarkaria Commission),
20

Nasik: Government of India Press. At p. 492

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 BIBLIOGRAPHY

1. Jain S.N., Alice Jacob and S.C. Jain, Inter-State Water Disputes in India, N.M. Tripathi
Pvt. Ltd., Bombay,1971

2. Report of the Krishna Water Disputes Tribunal, with Decision, Vol. 1, 1973

3. Jacob, Austin, “Canadian-United States Practice and Theory Respecting the International
Law of International Rivers: A Study of the History and Influence of the Harmon Doctrine”,
Canadian Bar Review No.3 (Sept 1959)

4. The Indus Commission Report (1943)

5. The Krishna Water Disputes Tribunal Report (1973)

6. The Narmada Water Disputes Tribunal Report (1978)

7. Iyer, R.R., Federalism and Water Resources, Economic and Political Weekly, March 26,
1994

8. Richards, Alan & Singh, Nirvikar, Inter State Water Disputes in India: Institutions and
Policies. Department of Environmental Studies & Department of Economics, University of
California (2001)

9. Bakshi, P.M., “A Background Paper on Article 262 and Inter-State Disputes Relating to
Water” (National Commission for the Review Working of the Constitution) available online:
http://lawmin.nic.in/ncrwc/finalreport/v2b3-6.htm

10. Sankaran, Kamala, “Water in India: Constitutional Perspectives”, in Iyer, R.R., Water and
its Laws in India, Sage Publications India Private Limited, New Delhi (2009)

11. D‟Souza, Radha, “Nation vs Peoples: Inter-State Water Disputes in India‟s Supreme
Court”

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12. Iyer, R.R., “A Synoptic survey and Thoughts on Change”, in Iyer, R.R., Water and its
Laws in India, Sage Publications India Private Limited, New Delhi (2009)

13. Iyer, R.R., Water and its Laws in India, Sage Publications India Private Limited, New
Delhi (2009)

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