Supreme Court Voices Concern Over States Seeking Judicial Redress Against Centre for Financial Assistance

"Let there not be a contest between Union and state," the Supreme Court said on Monday, expressing worry at the pattern of state governments coming it with allegations of discrimination by the Center.

The panel of Justices B.R. Gavai and Sandeep Mehta said orally, "We see various state governments are having to approach the court."

In order to give the Center time to formulate its position, the bench that was considering Karnataka's allegation that state was not granted monies totaling Rs 18,171 crore from the National Disaster Response Fund (NDRF) postponed the case for two weeks.

On the other hand, it declined to send out any official notices upon request from attorney general R. Venkataramani and solicitor general Tushar Mehta.

In his appearance on behalf of the Karnataka government, senior advocate Kapil Sibal informed the bench that the state had requested Rs 18,171 crore in financial help from the NDRF six months prior, but that the Centre had not yet answered.

Karnataka claims that because of the extreme drought, it has lost Rs 35,000 crore. The state experienced a 56% rainfall deficit the previous year.

Karnataka filed its petition in accordance with Article 32 of the Constitution, which upholds the fundamental rights of the people.

Mehta stated to the court, "We are aware of the timing of these petitions, if they had spoken with us before filing a petition under (Article) 32." Even though the Lordships may not give notice, it becomes news.

The chief justice, Justice Gavai, then offered the oral observations, stating that "different state governments are having to approach the court" and recommending that "there not be a contest between Union and state."

Kerala and Tamil Nadu had already filed similar cases, alleging that the Centre was purposefully withholding or postponing providing them with financial assistance.

Last month, the DMK government filed an appeal with the Supreme Court, alleging that the Center was holding up the provision of Rs 38,000 crore in disaster relief funds to help Tamil Nadu recover from the devastation caused by a cyclone and floods.

Kerala had earlier filed a civil lawsuit in the top court, claiming that the Center had breached "fiscal federalism" by cutting the state's borrowing ceiling in half to Rs 15,390 crore. The NDA government was accused by the state of attacking it for political purposes.

The Center, however, defended themselves by claiming that the "entire edifice of federal structure in the country would collapse like a pack of cards" if the states engaged in reckless borrowing.

Sibal said on Monday that an interministerial central team (IMCT) had visited the drought-affected districts of Karnataka between October 4 and October 9 of last year and had reported to the NDRF's national executive committee in accordance with Section 9 of the Disaster Management Act.

The suit filed by Karnataka states that the central government's denial of financial aid to the state "ex facie violates the fundamental rights of the people of Karnataka under Article 14 (equality) and Article 21 (life and personal liberty)."

It contends that in addition to failing to comply with its request, the Center broke the Disaster Management Act, 2005, which required the Union government to assist the state within 30 days of receiving the IMCT's report, which was turned in last December.

Of the Rs 18,171 crore that the state requested, about Rs 4,663 crore was requested for crop loss, approximately Rs 12,577 crore for gratuity compensation for the impacted households, approximately Rs 566.78 crore for relief related to drinking water, and approximately Rs 363 crore for cattle and livestock.

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