New Delhi
The Supreme Court, on Monday, declined to issue any temporary order in a case brought by the Kerala government challenging the borrowing limits imposed by the Centre. They stated that the case raises significant questions regarding the interpretation of the Constitution, particularly Article 293, which has not been definitively interpreted yet. Justices Surya Kant and KV Viswanathan referred the plea, filed by CM Pinarayi Vijayan’s government, to a 5-judge Constitution Bench for a final decision.
Regarding interim relief, the Bench considered various factors including the primary case, balance of convenience, and irreparable injury. They leaned towards the Union government’s argument that reductions in borrowing limits may be permissible in the following year if there was overutilization in the previous year.
Earlier, Kerala had rejected a one-time bailout package of Rs 5,000 crore from the Centre, arguing that it was entitled to borrow Rs 10,000 crore as per the law. Senior Advocate Kapil Sibal, representing Kerala, criticized the stringent conditions of the Centre’s offer. Kerala’s lawsuit under Article 131 of the Constitution questions the Union government’s authority to interfere with the state’s financial autonomy. The Kerala government maintains that it has exclusive power over its finances, including budgeting and borrowing.
