The Centre has also alleged that Odisha was not participating in the meetings relating to the issue and has not provided the requisite details, a lawyer representing one of the parties in the case said.
Another advocate representing Odisha in the case said that a written statement was filed yesterday by the Centre in the top court.
The lawyer said the Centre has told the court that they were in the process of finalising a bill to constitute a composite tribunal which would deal with all the inter-state river water disputes in the country.
The Bill proposes to set up an Inter-State River Water Disputes Tribunal, for adjudication of water disputes, if a dispute is not resolved through the Disputes Resolution Committee.
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The counsel said that the government has also told the apex court that the Mahanadi dispute should be resolved through discussion between the parties.
The Centre had in October told the apex court that it would take a decision on issuing a notification with regard to the dispute.
Odisha has been opposing Chhattisgarh's plans to build 13 barrages and seven pick up weirs (small dams) across the Mahanadi, in a plan to extract more water. Odisha has said this would adversely affect the interests of its farmers.