State Ought To Furnish SDRF 'Utilisation Certificate' Before Seeking Additional Funds From Centre: Kerala HC In Wayanad Landslide Case

A division bench of Justice A.K.Jayasankaran Nambiar and Justice Easwaran S. orally stated that the State government has to submit an executive summary showing past commitments and anticipated expenses for the future along with utilization certificates, issued by a certifying authority.

The Court stated that the State Government, which needs assistance, is bound to answer the queries and satisfy the Central government for seeking additional assistance.

“Isn't this the obligation of person who needs the money, as opposed to the person who is giving the money… what is your justification for seeking additional funds... If you simply show a proper justification for additional funds. We have this in our account but because of previous commitments, we cannot use it…you may have a case that SDRF amount is for previous or future expenses, we do not have money for spending now. Inform this aspect or what the State can do is prepare a utilization certificate or a certificate by a responsible authority, showing that you have these commitments.… Where is the certificate showing prior commitments. Please do it now then..” orally said the Court.

The remarks were made after the State informed the Court that out of the Rs. 782.99 crore available in SDRF, it has previous commitments of about Rs. 638.97 crores and thus there is balance of Rs. 61.53 crores in SDRF, which the state government has allocated for meeting any instant disasters, preparedness and capacity building in the State.

"Now why cannot you give a utilization certificate stating that only 61.53 or so and so fund is only availabe in SDRF. This is a trust issue, trust deficit you have to overcome this. This is like bank releasing money on stages, you have to show expenses. You can say we have this much, we have commitments and if we use it for Wayanad, we cannot complete our commitments. Which are the expenses you have committed? Is there any indications given to the central govt? Nobody anticipated the disaster we are making exception. You cannot take a stand that you cannot explain utilization on time. That is not how it works," the bench remarked further.

At the same time, the Court also called upon the Central government to observe the principles of cooperative federalism and help the state government at times like this.

“It is called co-operative federalism. If the state is in emergency and needs fund, who else will the state ask. Your norms like utilization certificate are procedural norms and this is an emergency. You have to make exceptions in emergency. No one is blaming you, more good has to be done.. obviously both of you ( central and state) will not talk to each other. We are ready to talk for you…” Court said orally.

It has directed the State government to submit a statement, issued by the certifying authority, detailing the prior commitments and providing utilisation certificates for the funds.

Additionally, the Court instructed that the anticipated future expenses should also be outlined. It further clarified that further financial assistance from the Central government can only be sought if it is demonstrated that the State lacks sufficient funds.

“Obviously both of you (Centre and State) will not talk to each other. We are ready to talk for you. It is duty of Court to suggest a way now,” it said and posted the matter to next week.

Case Title: In Re: Prevention And Management Of Natural Disasters In Kerala V State Of Kerala

Case Number: WP(C) 28509/ 2024 & Connected Cases