SC cancels Himachal HC order, ensures 18% royalty; State to gain over ₹250 crore annually
Shimla: The Himachal Pradesh government has secured a major legal victory in the Supreme Court, which has ruled in favour of the state’s demand for increased royalty from the Karcham-Wangtu hydroelectric project. JSW Energy, which operates the 1045 MW project, will now have to pay 18% royalty instead of the 12% it had continued to pay after completing 12 years of operation.
The verdict is expected to boost the state’s annual income by over ₹150 crore, and potentially more than ₹250 crore as other hydro projects nearing the 12-year mark follow suit.
The Supreme Court’s decision overturns the Himachal Pradesh High Court’s May 2024 ruling, which had upheld the company’s plea to continue paying only 12% royalty. According to the 1999 agreement between the state and the company, the royalty was fixed at 12% for the first 12 years and then 18% for the next 28 years. While the project began operations in September 2011, JSW Energy refused to increase the royalty from September 2023, leading to the legal dispute.
The state government challenged the High Court ruling in the Supreme Court, where senior advocates Kapil Sibal, Prag Tripathi, Advocate General Anoop Kumar Ratan, and Additional Advocate General Baibhav Srivastava argued the case. Their efforts led to a favourable verdict that could set a precedent for other hydroelectric projects in the state.
The latest judgment strengthens Himachal Pradesh’s position in asserting its rights over hydropower resources—a sector that contributes significantly to the state’s economy. With more projects entering the post-12-year phase of royalty agreements, this ruling could result in a substantial long-term boost to the state exchequer.
