A Division Bench of the Andhra Pradesh High Court, comprising Chief Justice Prashant Kumar Mishra and Justice C. Praveen Kumar, has directed the Union of India to file a counter affidavit by November 15 regarding the petitions that challenged Section12 (functions and powers) of the A.P. State Development Corporation (APSDC) Act, 2020, the raising of ₹25,000 crore by the State government through the APSDC, and alleged mortgaging of government properties such as the offices of the District Collector and the MRO.
The petitions were filed by Visakhapatnam East MLA Velagapudi Ramakrishna Babu and two others.
Appearing for the State, Advocate-General S. Sriram defended the compromising of the sovereign immunity of the Governor, and drew the court’s attention to Articles 299 and 361 of the Constitution wherein it was stated that “neither the President nor the Governor, or any person making or executing any such contract or assurance on behalf of any of them, shall be personally liable in respect thereof.”
The court agreed with the Advocate-General’s statement that the impugned contracts were State contracts under Article 299, and they did not entail any personal liability to the Governor as such agreements were signed by an Additional Secretary (finance) to the government.
The Advocate-General also said the writ petitions were political in nature, to which the Judges replied that they would adjudicate on any matter if important questions were raised.
Representing Mr. Ramakrishna Babu, advocate Y. Balaji said the waiver of the Governor’s sovereign power was illegal, and since the APSDC had no income, there was every possibility of the loan raised through it becoming a non-performing asset for the lenders, which would have consequences for the State exchequer.
