The Punjab and Haryana High Court has sought a response from the Punjab Government regarding a proposed Rs 15,000 crore loan to be raised through the Greater Mohali Area Development Authority (GMADA). The court has also asked the state government to provide details on the utilisation of Rs 6,400 crore in GMADA funds.
The observations came during the hearing of a public interest litigation (PIL), where concerns were raised by the Accountant General over the Punjab Government's use of GMADA funds. Following these submissions, the court directed the government to file a detailed reply on both the proposed borrowing and the utilisation of the authority's funds.
A Division Bench comprising Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor is scheduled to hear the matter again on September 28.
During the proceedings, Accountant General Kumar Abhay argued that the Rs 6,400 crore fund maintained by GMADA had been earmarked for a specific purpose and that its use for the state's general budget amounted to a serious financial irregularity. He contended that the utilisation of the fund could not be justified merely on the grounds that the government had spent money over the past 12 years.
The Accountant General also referred to a letter dated July 31 received from the Punjab Government and informed the court that the concerns previously raised by his office had not been adequately addressed. The PIL cited a letter issued by the Accountant General on June 3, which stated that the Rs 6,400 crore deposited by GMADA into the state treasury was being used through the government's general revenue account.
According to the petition, the amount should have remained reserved under Section 10(3) of the Land Acquisition Act, 2013, for purposes related to promoting agriculture and food security.
The petition further alleged that Rs 191 crore was being paid to a private entity as an intermediary fee for arranging the proposed loan. It also claimed that an earlier Rs 2,000 crore loan obtained for the Aerotropolis Project had not yet been utilised, despite plans to secure additional borrowing for the same project.
Representing the Punjab Government, Advocate General Maninderjit Singh Bedi told the court that including GMADA's Rs 6,400 crore in the state's consolidated fund for budgetary purposes did not amount to any irregularity. He stated that the state government had invested Rs 94,443 crore toward enhancing food security.
The High Court also sought an explanation regarding the rationale behind repeated borrowing for the Aerotropolis Project and questioned the necessity of raising fresh loans when earlier funds allegedly remained unutilised.
The case has drawn attention because of its implications for public finance management, government borrowing and the use of funds reserved for specific developmental purposes. The court is expected to examine the Punjab Government's detailed response during the next hearing.