In a significant development for Himachal Pradesh, the Supreme Court has ruled in favor of the state government in a long-standing dispute over royalty payments from the 1,045 MW Karcham-Wangtoo Hydroelectric Project operated by JSW Energy. This decision is expected to substantially increase the state’s annual revenue from the project.

The judgment, delivered by a bench comprising Justice Pamidighantam Sri Narasimha and Justice Jaymalya Bagchi, overturned an earlier Himachal Pradesh High Court ruling from May 2024 which had allowed the company to continue paying only 12 percent royalty. Following the Supreme Court’s ruling, JSW Energy will now be required to pay 18 percent royalty to the state, as originally outlined in the 1999 agreement between the Himachal Pradesh government and the company.

According to the agreement, the company was to pay 12 percent royalty for the first 12 years of operation and 18 percent for the remaining 28 years. While the company complied with the 12 percent royalty until September 2023, it refused to increase the payment thereafter, leading to a legal dispute. Though the High Court initially ruled in favor of the company, the state government challenged this decision in the Supreme Court.

With this latest verdict, Himachal Pradesh is now expected to receive an additional Rs 250 crore annually. The court has ordered the revised royalty to be paid from September 13, 2023, onwards. The project will revert to the control of the Himachal Pradesh government after a 40-year concession period.

This ruling could also set a precedent for other hydropower projects in the state that have completed 12 years of operation. It is anticipated that the verdict will strengthen Himachal Pradesh’s claim to greater benefits from its natural resources.

Advocate General Anup Kumar Rattan, who represented the state along with senior advocates Kapil Sibal, Prag Tripathi, and Additional Advocate General Vaibhav Srivastava, welcomed the verdict and confirmed that the government had presented all relevant facts before the court. He noted that the judgment could bring the state an estimated annual benefit of Rs 150 crore from this project alone.

Chief Minister Sukhvinder Singh Sukhu, who had prioritized the issue, took a proactive approach by assembling a legal team of national experts to argue the case. The government maintains that it will continue to advocate for the state’s rightful share in its natural resources.

The current government had earlier also secured a favorable judgment in the long-pending Wildflower Hall case, which involved a dispute over the ownership and management of a heritage hotel property. The court’s decision in that case resulted in the property returning to the state’s control, with potential future revenue benefits.