A bench comprising Chief Justice D Y Chandrachud and Justices JB Pardiwala and Manoj Misra was informed by senior lawyer Kapil Sibal, representing the state government, that the matter had been referred to a Constitution bench on April 1, but the apex court official had not yet sent an email to set up the bench.
NEW DELHI: On Friday, the Kerala Government approached the Supreme Court, requesting the prompt formation of a five-judge Constitution bench to hear its lawsuit against the Centre concerning the ceiling on net borrowing.
The state government questioned whether a state has an “enforceable right” to increase its borrowing limits from the Union government and other sources.
A bench comprising Chief Justice D Y Chandrachud and Justices JB Pardiwala and Manoj Misra was informed by senior lawyer Kapil Sibal, representing the state government, that the matter had been referred the issue to a larger bench, but the apex court official had not yet sent an email to set up the bench.
Sr. Adv Kapil Sibal mentions original suit by the State of Kerala concerning central finances, noting it was referred to the Constitution Bench.
Sibal
This needs to be looked at, Milords!
“I will look into it,”
said the Chief Justice of India (CJI).
A bench of Justices Surya Kant and K V Viswanathan had, on April 1, referred the matter to a five-judge Constitution bench, which the CJI can now establish through an administrative order.
However, the Supreme Court declined to grant Kerala any interim injunction, noting that the state had already secured “substantial relief” during the interim application process.
The bench referenced Article 293 of the Constitution, which pertains to state borrowing, and pointed out that this provision has not yet been subject to an authoritative interpretation by the apex court.
“Since Article 293 of the Constitution has not yet undergone authoritative interpretation by this court, we believe that the questions raised fall squarely within the scope of Article 145(3) of the Constitution. Therefore, we find it appropriate to refer these questions to a bench comprising five judges for a ruling,”
the bench stated.
Earlier, Kerala Government has filed a petition in the Supreme Court, accusing the Centre of unnecessary interference in the state’s finances, which it claims is hindering its ability to meet commitments in its Annual Budgets.
The petition argues that the Centre’s imposition of a Net Borrowing Ceiling on the state has led to significant arrears, affecting welfare schemes for the poor and vulnerable, payments to state government employees and pensioners, and dues to State-Owned Enterprises.
Minister Balagopal highlighted the importance of this case in the context of fiscal federalism, describing it as a milestone. He pointed out that such a case, involving financial matters, is unprecedented in the nation’s history. Despite opposition from the BJP Government and the UDF in Kerala, the Supreme Court’s decision to refer the matter to a Constitution Bench supports the state’s arguments.
Kerala’s original lawsuit challenges the restrictions imposed by the Union government on its borrowing capacity, arguing that certain orders and directives from the Union Ministry of Expenditure infringe on its financial autonomy and are therefore unconstitutional.
The Centre, during the Supreme Court hearing, argued that Kerala has been overborrowing in recent years, reflecting its financial condition, while Kerala contended that its finances are “sustainable enough” to handle the overborrowing from previous years.
