HC asks AP why sovereign power of Guv waived to raise loan of Rs 25K cr through APSDC
Vijayawada: The High Court has taken a serious view of the AP government’s waiver of the sovereign power of the Governor and asked why this was done in the guarantee agreement to raise a loan of Rs 25,000 crore from the banks through AP State Development Corporation.
A division bench of Chief Justice AK Goswami and Justice Jayasuriya heard three petitions filed by TD MLA from Visakhapatnam East assembly segment Velagapudi Ramakrishna and two others, on Thursday. The petitions challenged the validity of section 12 of APSDC Act, 2020, for availing a loan of Rs 25,000 crore through APSDC and mortgaging government properties like offices of MROs, collectors and buildings of colleges.
Petitioner Velagapudi’s counsel Balaji Yalamanjula argued that though the governor held sovereign power under article 361 of the Constitution, the state government waived it in the guarantee agreement with the banks to take the loan. Though article 361 specifies that no person or institution can file criminal or civil cases against the Governor, the AP government gave power to the financial institutions to file cases against the governor for the purpose of recovery of dues.
He raised an objection to mentioning the name of the governor in person, as Biswabusan Harichandan, for the purpose of issue of notice.
Counsel submitted to the court that as APSDC had no source of income. There was a possibility it might become a non-performing asset and all the mortgaged government offices could be locked, creating a situation in which there would be no office to run the day-to-day administration of the government.
He requested the court to issue a direction to stop transfer of government properties as it involved a gross violation of articles 266 and 293 of the Constitution.
However, Supreme Court senior advocate and AP government counsel Dushyant Dave pleaded for dismissal of the petitions, on the ground that “they were filed with political motive and to cause embarrassment to the government,” as one of the petitioners was the TD legislator.
He said the government did not violate RBI regulations and its move to raise the loan was not unconstitutional. He also argued that the banks were reluctant to give loans due to the representations being submitted to them by some public spirited citizens. He informed the court that all the government offices, in question, were in the custody of the state government and ruled out any problem in the conduct of the day-to-day administration.
The court said that nothing was on record about the representations and asked why the banks were reluctant to sanction loans if everything was alright.
State government’s counsel requested for a week's time to file the counter affidavit. The court granted it and directed the state government to file its counter in a week and posted the next hearing in the case to Oct. 21.
