The Supreme Court on Wednesday expressed disapproval of a condition imposed by the Centre on the State of Kerala that the former will give consent for additional borrowing only if the latter withdrew the suit filed in the Supreme Court. The top court told Kerala to accept the Rs 13,608 crore that the Central government is offering and make a case for further allocation.
A bench of Justice Surya Kant and Justice KV Viswanathan was hearing the suit filed by Kerala against the Centre under Article 131 of the Constitution challenging the curbs placed by the Centre on the state’s borrowing limits. The State had earlier informed the Court that the Centre agreed to allow additional borrowing to the extent of Rs 13, 608 crores but on the condition that the suit should be withdrawn.
During the hearing today, the bench disapproved of the Centre’s stand, asking how such a condition can be placed. The bench added that the Centre can impose other conditions, which are within the parameters of the Constitution, except the condition that the suit should be withdrawn.
Addressing Attorney General for India R Venkataramani and Additional Solicitor General N Venkataraman, Justice Surya Kant said that the Centre can insist for acceptance of other conditions but they only want to suggest not to insist on the condition of withdrawal of the suit.
Furthermore, the bench asked the Kerala government and Centre to hold talks and suggested that all responsible officials from both the Centre and Kerala meet at North block and deliberate on this issue further. The matter has now been adjourned without a next date for hearing. However, Kerala and Centre can mention the case for hearing if the negotiations fail.
The apex court questioned Kerala as to why it was pleading that there was an emergency fiscal situation without accepting what the Centre was offering. Subsequently, the Supreme Court urged Kerala to accept the money being offered by the Union government, hold further negotiations and then pursue litigation, if needed.
Meanwhile, Senior advocate Kapil Sibal, appearing for Kerala, told the apex court that the state was ready to accept the funds the Centre was offering. He argued that while the Centre was offering Rs 13,608 crore, the state was entitled to Rs 15,000 crore more. Attorney General Venkatramani and Additional Solicitor General Venkatraman, who appeared for the Centre, told the court that they were also open for negotiations.