Political analyzes of the TDP’s kingmaker position in the NDA have discussed the years of efforts that Chandrababu Naidu has put in to obtain Special Category Status for Andhra Pradesh, which would compensate for the loss of revenues suffered after the undivided state was split to create Telangana in 2014. A decade on, several issues relating to the Andhra Pradesh Reorganisation Act, 2014 (APRA) remain pending between the two successor states, and Telangana Chief Minister Revanth Reddy has said he hopes they are resolved soon.
The creation of the new states was followed by division and apportionment of the assets of undivided Andhra Pradesh. Courts were required to adjudicate several disputes that arose; A few of the major legal disputes are as follows.
The states are embroiled in some other disputes as well, including over competing claims on pending power generation dues, division of the AP State Financial Corporation’s assets, and over the sharing of Krishna and Godavari waters.
Ninth and Tenth Schedules of AP Reorganization Act
In December 2022, Andhra Pradesh approached the Supreme Court claiming that the division of assets contained in the Ninth and Tenth Schedules of the APRA had not commenced even though the Act clearly apportioned them between the two “successor states”.
According to the petition, the Act lists 245 institutions or assets (142 in Schedule IX, 91 in Schedule X, and 12 unmentioned in the Act) owned by the erstwhile State of Andhra Pradesh, valued at “about Rs 1,42,601 crores” and that 91% of these assets are located in Hyderabad “clearly to the benefit of Telangana”.
As of June 2, 2024, Hyderabad is the capital city of Telangana alone, and no longer the shared capital of both states. Andhra Pradesh is in the “disadvantageous position of having to start from scratch”.
These institutions, says the petition, “perform a range of basic and essential functions”, including agriculture, dairy development, education, medical services, minority and backward class development, etc. None of these assets have been apportioned between the successor states, it says.
According to Andhra Pradesh, Telangana’s inaction “has led to a multitude of issues adversely affecting and violating the fundamental and other constitutional rights” of the people residing in the state.
Andhra Pradesh has asked the Supreme Court to direct Telangana to start handing over assets specified in the Ninth and Tenth Schedules of the APRA under the supervision of a neutral arbitrator or a retired judge of the Supreme Court.
In December 2023, the case was listed for a final hearing in March 2024 by Justices Sanjiv Khanna and SVN Bhatti. However, the case was not taken up, and remains pending.
Andhra Pradesh State Council of Higher Education (APSCHE)
In 2016, the Supreme Court decided on a dispute where Telangana claimed ownership of all funds and assets of the Andhra Pradesh State Council of Higher Education (APSCHE).
The state of Telangana argued that the APRA does not contain any provisions for the apportionment of institutions under the Tenth Schedule (such as the APSCHE). As a result, since the assets of the APSCHE were located in Hyderabad, the state of Andhra Pradesh had no right to them.
The Supreme Court rejected this argument and invoked Section 47 of the APRA which states that the apportionment of assets can be subject to adjustment “as may be necessary to secure just, reasonable and equitable apportionment of the assets and liabilities amongst the successor States”.
It directed that APSCHE assets should be divided between the two states based on the population ratio.
Andhra Pradesh Dairy Development Co-operative Federation Limited (APDDCF)
In 2016 the Telangana government transferred the assets of the Dairy Development Board in Hyderabad to the Telangana State Dairy Development Cooperative Federation (TSDDCF) from the APDDCF.
The APDDCF challenged this Government Order at the Telangana High Court, arguing that as a Ninth Schedule institution, its assets had to be fairly apportioned in the manner provided by the APRA. The TSDDCF, however, claimed that the APDDCF headquarters were located in Telangana, and its assets belonged to the state in which it was located.
In 2021, the High Court held that the APDDCF’s assets should be divided between it and TSDDCF in the ratio of 58.31:41.68 after a complete valuation of the assets by the Comptroller and Auditor-General of India (CAG).
Both states have filed petitions challenging this judgment at the Supreme Court. The matter was last heard by Justice Sanjay Karol in October 2023.
Andhra Pradesh Mineral Development Corporation (APMDC)
The APMDC and the newly established TSMDC arrived at a plan to divide the assets of the APMDC (of the undivided state), another Ninth Schedule institution, in March 2018 based on the population ratio of 58.31:41.68.
The Andhra Pradesh government approved this plan in 2019, but the Telangana government took no action on the proposal. In 2020, the Andhra government approached the Telangana High Court arguing that the Telangana state’s inaction in implementing the proposal was arbitrary and illegal.
The court called the Telangana government’s conduct “baffling” and “inexplicable”, and ordered it to begin distributing the assets in terms of the proposal agreed to in 2018.
But the TSMDC and the State of Telangana challenged this decision before the Supreme Court in 2021. The matter was last heard by a three-judge Bench led by Chief Justice of India DY Chandrachud in February 2024.