The last day of the 14th Kerala Assembly set a new precedent in the practice of Parliamentary democracy.
For the first time in the country, the Kerala Assembly, overriding the bitter objections of the Opposition benches, passed a resolution on Friday rejecting portions of the Comptroller and Auditor General Report.
Here is what the resolution, moved by Chief Minister Pinarayi Vijayan, said: "The CAG report says that KIIFB's borrowings are unconstitutional and the masala bonds floated by it was an encroachment into the powers of the Centre. Not only are these observations factually wrong but were not in the draft report and were included in unnecessary and mysterious haste to sabotage the development prospects of the Kerala government." It says that the insertion of observations, in violation of audit regulations and without informing the state government, was a denial of natural justice. So saying, the resolution contends that the Assembly was rejecting the observations on KIIFB between pages 41 and 43 of the State Finance Audit Report of the CAG for the year ended March 2019 that was tabled in the House on January 19.
As a consequence, eight paragraphs that question and term as "unconstitutional" the borrowings of Kerala Infrastructure Investment Fund Board (KIIFB), have been taken out.
Nonetheless, a major Constitutional issue still needs to be ironed out. Congress MLA V D Satheesan wanted the Speaker to clarify which CAG report would now come to the consideration before the Public Accounts Committee (PAC), a body of legislators set up under the Assembly Rules of Procedure and has been tasked with examining the accounts of the State, including the audit findings of the CAG.
Satheesan, who is also the chairman of the PAC, asked: "Which report should the PAC consider: the one signed by the Governor and tabled in the Assembly or the edited, incomplete CAG report?"
Finance Minister T M Thomas Isaac said that since the PAC itself was a creation of the House, it could consider only that report that had now been revised by the resolution passed in the house.
The Opposition warned the Speaker that he should not make a hasty decision as such a move had no precedent in Indian history. Apparently deferring to the Opposition's logic, Speaker P Sreeramakrishnan said he would pass a ruling after careful consideration.
This was the third time this session the Assembly was sparing time to discuss the KIIFB-CAG issue. On January 20, there was an adjournment motion on the issue. The next day, January 21, the report of the Privileges and Ethics Committee that let the finance minister off the hook on the question of whether he had breached the Assembly's privilege by revealing about the contents of the CAG report before it was tabled in the Assembly was discussed. And on Friday came the resolution.
While objecting to the resolution, Satheesan said it was the PAC that should scrutinise the CAG report as laid down in the Assembly Rules and added there was no need for a hasty resolution.
Isaac said the CAG report had termed all of KIIFB'S borrowings as unconstitutional. "It also says that KIIFB's borrowings have no legislative approval. KIIFB, which is all set to roll out development worth Rs 60,000 crore, cannot even function if we don't reject these observations quickly," Isaac said.
According to him, a prima facie baseless charge should be rejected prima facie. "There is no dispute that the CAG had not consulted the government before including these observations," Isaac said. He termed as "absurd" the CAG noting that the entry 37 of List I of the 7th Schedule of the Constitution gives the powers of raising foreign loans only to the Central Government.
"How can anyone sound more absurd," Isaac said. He argued that this was just a legislative right and said that the legislation introduced by the Centre using this right, Foreign Exchange Management Act (FEMA), gives a 'body corporate' like KIIFB the power to secure foreign loans.
The minister said the resolution was also a message to the Centre and its agencies that Kerala would go to any extent to protect its interests.
Like last day, the Opposition argued that it was the CAG who was denied natural justice. Congress MLA K C Joseph, like Satheesan the other day, wanted to know whether the CAG's version was heard.
