The government of Punjab approaches the Supreme Court against Centre for its refusal to pay statutory charges including Rural Development Fund (RDF) and Mandi Development Fee (MDF) — to the tune of Rs 4,208 crore.

The government submitted before the Hon'ble Court that out of Rs 4208 crore pending, Rs 3637 crore was towards RDF and Rs 571 crore was Mandi Fee. While filing the suit in the apex court, the department of food and civil supplies has stated that the Centre’s refusal of payment of statutory charges and insistence on capping the statutory charges to a total of 2 per cent of the MSP was an outright transgression of the state’s exclusive legislative powers under the Constitution of India, which empowers it to determine the rate of fees to be levied in respect of agriculture and market.

The Centre has not been paying RDF to the state for the last four procurement seasons. The state charges 3 per cent each of RDF and MDF on Centre for carrying out the biggest procurement operations of wheat and rice for Government of India’s Public Distribution System (PDS). Chief Minister Bhagwant Mann had on Tuesday stated that they will move the SC against the Centre, after having given an ultimatum to the Centre to clear all pending dues by July 4 to avoid facing legal action.

During an arguement, the council for state submitted that Centre is obligated to pay the fee which is constitutionally levied by the state. The mere fact that this fee is being paid in respect of acquisition, which the state is carrying out for the Centre, does not in any way change this underlying constitutional/ legal position.

It has said that the Centre’s actions are also in violation of the Modified Fixation Principles that recognize the autonomy of the state to determine the fees to be levied and subsequently reimbursed with by the defendant (Union Government of India).

The suit by the government also says that the plaintiff state will suffer if the defendant is allowed to discontinue the payment of the market fees and the statutory fees, at the rate determined by the plaintiff state. The reduction of the statutory charges at this stage would adversely affect the rural infrastructure and economy.

Further, the Punjab State Agricultural Marketing Board/ Punjab Development Board will not be able to pay the loans/ liabilities created for development of rural infrastructure in respect of the outstanding payments accrued on account of the market fees and RDF.

“Thus, there exists a dispute, involving questions of law and fact, between the plaintiff state and the defendant — Union of India — regarding the encroachment of jurisdiction and encroachment of legal rights as a state. Hence, this original suit under Article 131 of the Constitution of India is being preferred,” the suit said.