The Andhra Pradesh High Court on Tuesday admitted a Public Interest Litigation (PIL) challenging the state government’s move to raise nearly Rs 9,000 crore in loans allegedly by leveraging the assets and name of the Andhra Pradesh Mineral Development Corporation (APMDC).
A division bench comprising Chief Justice Dhiraj Singh Thakur and Justice Ravi Cheemalapati issued notices to both the central and state governments, directing them to submit their counter-affidavits within four weeks.
The PIL was filed by YSR Congress Party MLC and General Secretary Lella Appi Reddy, who accused the Chandrababu Naidu-led government of violating constitutional norms and endangering the financial health of both APMDC and the state. Senior advocate P. Veera Reddy represented the petitioner in court.
According to the petition, the state government is allegedly pledging the state treasury as collateral to secure private loans through APMDC, a move that the petitioner claimed could grant private lenders direct access to the consolidated fund of the state in the event of loan default.
This is reportedly the first instance in Andhra Pradesh’s history where such a mechanism has been used, raising concerns about its legality and long-term financial implications. The PIL also warned that APMDC, once a stable and profitable public sector enterprise, is now being dragged toward insolvency due to these controversial borrowing methods.
The court will take up the matter after the completion of the four-week response period.