Ceiling on net borrowing: SC assures Kerala of listing if its lawsuit before Constitution bench

The Supreme Court on Tuesday assured the Kerala government that its lawsuit against the Centre raising the issue of ceiling on net borrowing will be considered for listing before a five-judge Constitution bench. A bench comprising Justices Sanjiv Khanna and Dipankar Datta took note of the submissions of senior advocate Kapil Sibal, appearing for the state government, that the matter is urgent and be listed after the summer vacation.

"We will see and take a call on listing," Justice Khanna told Sibal.

A bench of justices Surya Kant and K V Viswanathan, on April 1, had referred to a five-judge Constitution bench the lawsuit filed by the Kerala government raising the issue of ceiling on net borrowing.


The apex court, however, had refused to grant any interim injunction to Kerala saying the state has secured "substantial relief" during the pendency of the interim application.

The Kerala government has accused the Centre of interfering in the exercise of its "exclusive, autonomous and plenary powers" to regulate the state's finances by imposing a cap on borrowing.

While referring the matter to the larger bench, the top court had referred to Article 293 of the Constitution, which deals with borrowing by states, and said this provision has not been so far subject to any authoritative interpretation by the apex court.