KOCHI: The finance department on Wednesday informed the Kerala High Court that the state government is facing a huge financial crisis. “Our state is now passing through a phase of financial constraints. Any monetary benefit has to be allowed within the resources available with the government,” said the finance department in response to a petition filed by Kolkata-based Laxminath Tradelink Private Ltd seeking a directive to Kerala Transport Development Finance Corporation Ltd (KTDFC) to return the fixed deposit amount.
The affidavit stated that KTDFC is a separate legal entity having its own financial arrangements and dealings. Even though the government is supporting public sector undertakings, it is obvious that the government is not legally bound to give financial support to meet its day-to-day affairs.
Hence, it would be feasible if the transport department could take the initiative to settle the matter among its two corporations.
No valid legally enforceable guarantee was executed by the state in favour of KTDFC. KTDFC cannot, therefore, insist on or invoke a guarantee against the government.
Justice Devan Ramachandran granted two weeks to file a clarificatory affidavit as the court felt that the affidavit filed by the state did not explicitly state whether the borrowing made by the KTDFC was guaranteed by the government.