SC directs AP to pay Rs 1,100 cr to Covid-hit

New Delhi: A Supreme Court bench has directed Andhra Pradesh government to return Rs 1,100 crore lying in the personal account to the State disaster response fund over Covid compensation within two weeks. The Comptroller and Auditor General (CAG) had pointed out serious illegality committed by Andhra Pradesh in diverting a sum of Rs 1,100 crore out of the state disaster fund and keeping it unutilised for two years.

This information led to the Supreme Court's ruling on Monday that funds intended for disaster relief cannot be diverted by states to other accounts.

An application to this effect was filed by Telugu Desam Party member and former state legislator Palla Srinivasa Rao who raised the issue before the court. He had claimed the irregularity based on a letter written to a TDP MP, K Rammohan Naidu by the Union Minister sometime back that the state received funds from the Centre totalling Rs 570.91 crore under the National Disaster Response Fund (NDRF) and Rs 324.15 crores under the State Disaster Response Fund (SDRF), which were diverted into a different account.

A division bench of the Supreme Court comprising Justices M R Shah and B V Nagarathna found fault with the Jagan government for diverting the money meant for distribution of ex gratia to the families of Covid-19 victims into the personal deposit (PD) accounts to fund the welfare schemes, particularly the Rythu Bharosa.

The plea said when the top court was actively and continuously monitoring the implementation of its October 2021 order, dealing with the issue of disbursing ex gratia assistance of Rs 50,000 to next of kin of Covid-19 victims, the diversion of funds by the AP government from the SDRF to personal deposit account were not only against the law of the land but is also contemptuous in nature.

Advocate Gaurav Bansal, representing Srinivasa Rao, submitted that AP government diverting funds from SDRF to a personal deposit account was not permissible under the Disaster Management Act. Additional Solicitor-General Aishwarya Bhati, representing the Centre, also said that the Finance Ministry has asked questions from the state on the issue. The SC bench restrained the government on April 13 from continuing disbursal.

Today while dealing with the case, the bench described the diversion of funds meant for disaster relief for other purposes as a serious matter, and asked the government to refund the money of Rs 1,100 crore to the SDRF within next two weeks.

It also asked the government to settle all claims of the Covid-19 relief beneficiaries within four weeks of the receipt of their application. In April this year, the bench restrained the state government from using the money if the amount had already been transferred.

The petitioner had quoted a letter written by Union Minister of State for Finance Pankaj Chaudhary to TDP MP Kinjarapu Ram Mohan Naidu on March 12, 2022, giving details of the alleged diversion that was flagged by the Comptroller and Auditor General (CAG) in its report on state finances for the year ending March 2020.

The letter, issued by the Finance ministry, stated that the Andhra Pradesh government received Rs 324.15 crore as the central share of the SDRF and Rs 570.91 crore under the National Disaster Response Fund (NDRF) from the Centre.

According to the letter, an amount of Rs 1,100 crore was transferred from these funds to the personal deposit account of the commissioner, directorate of agriculture, towards payment of input subsidy to farmers for the kharif crop as a "gratuitous relief", the letter said.

"The CAG report includes that the state government transferred Rs 1,100 crore to personal deposit account by showing the expenditure as disaster relief and rehabilitation in violation of the appropriation act," Rao's application said.

The CAG flagged the expenditure as "the state government has transferred the funds from SDRF to personal deposit account without spending on immediate relief", he said.

Additional solicitor-general (ASG) Aishwarya Bhati, appearing for the Centre, supported the application. She assured the Court that she would get back on any further communication received from the state on this aspect.