Constitutional Court
28 February 1996
Facts
The case was initiated by a group of members of the Parliament. The group asked for an investigation into whether Government resolution “On the Capitalisation of Part of the Loans of the Enterprises of the Ministry of Agriculture” was in conformity with the Constitution, the Law on Budgetary Structure, the Law on State Regulation of Agricultural Economic Relations and the Law on Joint Stock Companies.
Complaint
In the applicant's view, the contested resolution is unconstitutional, as it authorises the Ministry of Agriculture to cover the loans of only 9 companies to the Bank of Agriculture. Moreover, the contested decision provides that the use of the State budget's share of the Agricultural Support Fund is in breach of the abovementioned laws, considering the State's contribution to the companies' debts cannot increase the companies' authorised capital, since the funds remain in the bank.
Court’s ruling
The Court stated that the principle of equality enshrined in the Constitution does not in itself exclude the fact that a law may provide for unequal legal regulation in respect of certain categories of persons in a different situation. The contested resolution states that the purpose of the different regulation is to facilitate the conditions for agricultural undertakings processing agricultural products to settle their accounts with agricultural producers. The Court therefore holds that the regulation does not conflict with the principle of equality of persons enshrined in the Constitution.
The Court emphasised that the Law on Budgetary Structure, which regulates the use of State budget, is a general norm, and therefore the Law on State Regulation of Agricultural Economic Relations (special norm) must be referred to in order to determine whether the contested resolution is in accordance with the law. The contested measure provides that the Agricultural Support Fund is to be used for “capitalisation of loans”. The Law on the State Regulation of Agricultural Economic Relations does not provide for such a form of use of public funds. Only the legislator can determine the form of use of State funds, since Article 128 (2) of the Constitution states that ‘the procedure for the management, use and disposal of State property shall be determined by law.’ The Court therefore ruled that the abovementioned resolution was contrary to the Law on State Regulation of Agricultural Economic Relations.
The Court stated that since the capitalisation of the loans was considered to be contrary to the Law on State Regulation of Agricultural Economic Relations, the question of the conformity of the contested resolution with the Law on Joint Stock Companies did not arise.