The Division Bench of the Andhra Pradesh High Court, comprising Chief Justice Arup Kumar Goswami and Justice N. Jayasurya, has directed the government to file a counter affidavit within seven days stating its position on the alleged waiver of the sovereign power of the Governor in the process of raising a loan of ₹25,000 crore through the AP State Development Corporation (APSDC) and other matters connected thereto.
The court also sought clarity on the government’s stand on the validity of the agreements being entered into by it with the APSDC and the banks for availing loan facilities, mortgaging government properties such as the offices of District Collectors and MRO and college buildings, and the guarantee being offered for such loans.
Appearing for the State, senior advocate Dushyant Dave maintained that the government neither violated the regulations of the RBI nor was the establishment of APSDC against Articles 21, 204 and 266 of the Constitution as claimed by the petitioners.
He argued that the case was politically motivated as one of the petitioners, Velagapudi Ramakrishna Babu, was an incumbent MLA of the TDP representing Visakhapatnam East constituency.
Further, he insisted that banks were reluctant to give loans because of the representations being submitted by some “public spirited citizens.”
The petitioner’s advocate, Y. Balaji, said the Governor’s sovereign power under Article 361 of the Constitution had been waived by the State government in giving guarantee to banks for the ₹25,000 crore loan raised by it.
He asserted that the APSDC had no income, and therefore, there was every possibility of loans being taken through it turning into non-performing assets in the future.
After hearing the matter, the court adjourned the case to October 21 while ordering that Mr. Dave and others file counters in one week.
