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‘Very serious issue’: SC stops AP’s money transfer from disaster fund to personal account

The Supreme Court on Wednesday restrained the Andhra Pradesh government from transferring funds from the State Disaster Response Fund (SDRF) to a personal deposit account, saying “it is a very serious issue”.

A plea filed by state resident Palla Srinivasa Rao said when the top court is 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 is not only against the law of the land but is also contemptuous in nature.

Advocate Gaurav Bansal, representing Rao, submitted that the AP government diverting funds from SDRF to a personal deposit account is 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.

A bench of Justices M.R. Shah and B.V. Nagarathna said this is a very serious issue and asked the state government not to divert funds under the Disaster Management Act. After hearing the arguments, the bench issued notice to the state government in the matter.

The bench also directed the state government not to utilize the funds which they have transferred to other accounts under DM Act.

The plea said: “That the applicant… has knocked the door of the temple of justice for the reason that State of Andhra Pradesh is illegally utilizing the funds of State Disaster Response Fund for the purposes other than specified under Section 46 (2) of the Disaster Management Act – 2005.”

The plea cited a letter issued on March 12, 2022, by the Union Minister of State for Finance, which crystal clearly says that the Andhra Pradesh government received an amount of Rs 324.15 crore as the central share of the State Disaster Response Fund and a number of Rs 570.91 crore under the National Disaster Response Fund.

“The said letter dated March 12 also mentioned that the state of Andhra Pradesh has transferred the funds from State Disaster Response Fund to Personal Deposit Account without spending on immediate relief,” added the plea.

The plea contended that once the statute prohibits the utilization of funds deposited under the National Disaster Response Fund and the State Disaster Response Fund, the Andhra Pradesh government has no authority to divert the said fund to any other use.

The plea also sought a direction from the Andhra Pradesh government to submit the details of funds that they have utilized under State Disaster Response Fund during the Covid pandemic.

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