Judicial restraint in economic policy: HC rejects transfer, audit, and parliamentary-laying challenges over the Market Stabilization Scheme.

The HC held that amounts credited under the Market Stabilization Scheme formed part of the Consolidated Fund of India and were not shown to require transfer to it, so the challenge to the Scheme account failed. It also held that the scope and timing of audit lie within the constitutional and statutory domain of the Comptroller and Auditor General, and no mandamus could compel a specific or additional audit of the Scheme or the Reserve Bank's revaluation account. The Memorandum of Understanding was not shown to be an agreement under section 21 of the Reserve Bank of India Act, so the parliamentary laying requirement did not apply. The Court declined to direct an estimate of economic profit or loss, finding no enforceable constitutional or statutory breach.

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Issues: (i) whether amounts credited under the Market Stabilization Scheme were outside the Consolidated Fund of India and liable to be transferred to the Consolidated Fund; (ii) whether a writ could be issued directing a specific audit by the Comptroller and Auditor General in relation to the Scheme and the Reserve Bank's Currency and Gold Revaluation Account; (iii) whether the Memorandum of Understanding under the Reserve Bank of India Act required laying before Parliament; and (iv) whether the Court should direct an estimate of profit or loss to the country arising from the Scheme and depletion in the Reserve Bank's revaluation account.

Issue (i): whether amounts credited under the Market Stabilization Scheme were outside the Consolidated Fund of India and liable to be transferred to the Consolidated Fund.

Analysis: The Scheme expressly contemplated that the amounts raised would form part of the Consolidated Fund of India and would be kept in a separate identifiable account only for the limited purpose of redemption and buy-back of the securities issued under the Scheme. The material on record, including the governmental and audit affidavits and the budget statements, showed that the borrowings and repayments were accounted for in the Consolidated Fund and that the amounts were immobilized, not excluded from it.

Conclusion: The challenge failed and no direction for transfer of the Scheme account was warranted.

Issue (ii): whether a writ could be issued directing a specific audit by the Comptroller and Auditor General in relation to the Scheme and the Reserve Bank's Currency and Gold Revaluation Account.

Analysis: The scope, extent, timing, and frequency of audit fall within the constitutional and statutory domain of the Comptroller and Auditor General. The accounts of the Ministry of Finance and the appropriation accounts of the Union Government were stated to be audited regularly, and the Court found no constitutional or statutory dereliction calling for judicial intervention. The Reserve Bank's revaluation account also did not fall within the audit jurisdiction sought to be compelled.

Conclusion: No mandamus for a specific or additional audit could be issued.

Issue (iii): whether the Memorandum of Understanding under the Reserve Bank of India Act required laying before Parliament.

Analysis: The relevant agreement was not shown to be an agreement made under section 21 of the Reserve Bank of India Act, 1934. The statutory requirement to lay agreements before Parliament applies only to agreements made under that provision, and the Memorandum of Understanding did not fall within that category.

Conclusion: The contention based on section 21 of the Reserve Bank of India Act, 1934 was rejected.

Issue (iv): whether the Court should direct an estimate of profit or loss to the country arising from the Scheme and depletion in the Reserve Bank's revaluation account.

Analysis: The relief sought would have required the Court to enter the field of economic policy and to direct a form of evaluation that lay outside judicial function in a public interest petition. The materials also showed that movements in the revaluation account could not be equated mechanically with the Scheme, and that the account reflected multiple market factors. In the absence of any demonstrated constitutional or statutory breach, judicial intervention was unwarranted.

Conclusion: The request for such a direction was declined.

Final Conclusion: The petition disclosed no enforceable constitutional or statutory infraction, and the Court declined to displace administrative and policy discretion in a matter of economic management.

Ratio Decidendi: In public interest litigation involving economic policy, judicial intervention is limited to correcting a demonstrated constitutional or statutory breach and cannot extend to substituting the Court's judgment for that of the competent executive or expert authority.

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