MATHEW Vs. UNION OF INDIA

JUDGEMENT

(1.) DO the provisions embodied in Art. 292 and 293 of the constitution debar the Central and the State Governments from borrowing any money beyond the amount standing to their credit in the Consolidated Fund? This is the short question that arises for consideration in this petition. A few facts as relevant for the decision of this case may be noticed.

(2.) THE petitioner is the President of Nishabdha bhooripaksham. When translated, the organization means - "the silent majority. " It was started as an association of public-spirited persons. It is now a political party. THE petitioner himself is an assessee. He complains that the Union of India and the State Government of Kerala are arbitrarily borrowing money in violation of the "letter and spirit of Art. 14, 292, 293 and 39 (b) of the Constitution" THE State Government is throwing away "its precious largesse in gross violation of Art. 14 in the form of retention of excess employees. . . . " As a result, the total liabilities of the State Government during the five years from 1996-97 to 2000-01 have "grown by 108%". According to the report submitted by the Comptroller and Auditor General only 10% of borrowings was available for investment and other expenditure after meeting the debt servicing obligations during 1996-97. . . . However, during 2000-01, only 9 % of the net funds was available for other expenditure. " A copy of the report 'showing the time series of state Government finances" has been produced as Ext. P1.

(3.) THE petitioner maintains that the State Government cannot be permitted to borrow beyond "the extent of the Consolidated fund". It has made no law "to fix the limits within the Consolidated fund of the State". At present "the accumulated debt of the State is thrice the Consolidated Fund. . . . " In view of the provisions of art. 293 (3), the "state cannot borrow if there are loans remaining unpaid to the Government of India without its consent". According to the petitioner, the State has "a large number of Government employees who are patently in excess. Any rational Government would as a permanent solution to the problem of wasteful revenue expenditure which becomes recurring, downsize the strength of the Government. THE fact that there are a huge number of excess posts is admitted by none less than the Chief Minister as being not less than 70,000. " THE jobs with the Government "constitute wealth doled out by a modern welfare State. " THE funds being scarce, the Government cannot be permitted to "maintain any person found to be" in excess of the required needs. THE action of the Government in allowing such persons to continue infringes the duty to act fairly.