Constitution of India
Article 290: Adjustment in respect of certain expenses and pensions
Part XII — Finance, Property, Contracts and Suits (Chapter I — Finance, Sub-heading: Miscellaneous Financial Provisions)
Clause (a)
WHAT IT SAYS: Where expenses of a court/commission or pensions of persons who served under the Crown or in Union/State affairs are charged on the Consolidated Fund of India, and the court/commission serves a State's needs or the person served in connection with a State's affairs, then the relevant State must contribute. WHAT IT MEANS: If the Union bears costs via the Consolidated Fund of India for a court, commission, or pensioner that actually served a State's needs, that State must pay its proportionate share back. KEY DOCTRINE: Doctrine of equitable financial adjustment — costs follow the benefit received.
Clause (b)
WHAT IT SAYS: Where expenses or pensions are charged on the Consolidated Fund of a State, but the court/commission serves Union or another State's needs, or the person served the Union/another State, then Union/other State must contribute. WHAT IT MEANS: If a State bears the cost but the benefit went to the Union or another State, the benefiting entity must pay proportionate contribution to the paying State. KEY DOCTRINE: Arbitration by CJI-appointee — if parties cannot agree on the contribution amount, the Chief Justice of India appoints an arbitrator whose decision is final.
Constitutional Inspiration
SOURCE(S): 1. Government of India Act, 1935 — Section 142 Original provision: Section 142 dealt with adjustment of revenues between the Federation and Provinces regarding shared courts, commissions, and pension liabilities. What India kept: The core mechanism of proportionate expense-sharing and pension adjustment between Union and States was retained. INDIA'S SPECIFIC ADAPTATIONS: 1. Replaced 'revenues of India / revenues of a Province' with 'Consolidated Fund of India / Consolidated Fund of a State' — to align with the new constitutional framework of public finance under Article 266. 2. Extended coverage to persons who served 'after commencement of the Constitution' — the 1935 Act only covered pre-existing liabilities; India's framers future-proofed the provision. 3. Retained arbitration by CJI-appointed arbitrator as a dispute resolution mechanism — reflecting framers' trust in judicial neutrality for inter-governmental financial disputes.
Constituent Assembly Debate
DEBATED ON: 10 August 1949 (CAD Volume IX) KEY SPEAKERS: 1. Dr. B.R. Ambedkar (Bombay) — Moved amendment No. 102 updating Draft Article 267 to align terminology with the final constitutional framework. 2. Prof. K.T. Shah — Proposed four amendments: three to substitute 'in connection with the affairs of' with 'under the Government of' for clarity, and one to replace 'an arbitrator' with 'a tribunal'. 3. Members generally — Minimal substantive opposition; amendments were technical and linguistic in nature. MAJOR DISAGREEMENTS: 1. 'Arbitrator vs. Tribunal' — Prof. K.T. Shah proposed substituting a tribunal for an arbitrator, but this was rejected by the Assembly. 2. 'Cumbrous verbiage' — Shah considered the expression 'in connection with the affairs of the Union or of a State' unnecessarily verbose, preferring 'under the Government of the Union or of a State', but this too was rejected. FINAL OUTCOME: None of the proposed amendments were passed; Draft Article 267 was adopted as moved by Dr. Ambedkar without modification. AMBEDKAR'S KEY QUOTE (if available): No specific substantive quote recorded on this article — Ambedkar moved the article with formal amendments and the Assembly adopted it without extended discussion.
Landmark Judgments
LANDMARK JUDGMENTS: 1. There is limited direct case law specifically interpreting Article 290 as it is a transitional/administrative financial provision. 2. State of West Bengal v. Union of India (1963) — The Supreme Court, while addressing federal financial relationships, upheld that constitutional provisions including Articles 266–290 define financial relationships between Union and States, and historical financial arrangements cannot be disturbed arbitrarily. 3. In re: Berubari Union (1960) — While primarily about territory under Article 3, the Court noted that pre-Constitution treaties creating financial obligations are honored under various constitutional articles including Article 290. NOTABLE DISSENTS (if any): 1. No recorded notable dissents specific to Article 290. SCHOLARS & JURISTS: 1. D.D. Basu — Recognized Article 290 as a transitional provision ensuring smooth fiscal continuity from British India to the Republic, particularly for pension liabilities of Crown servants. 2. M.P. Jain — Noted that Article 290 embodies the principle of cooperative federalism in fiscal matters, with the CJI-appointed arbitrator mechanism providing a uniquely judicial resolution for inter-governmental disputes.