REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No 11004 OF 2016
[Arising out of SLP (C) No. 33119 of 2013]
LOK PRAHARI THR.
ITS GNRL. SECY, S N SHUKLA .....APPELLANT
Versus
STATE OF U P AND ORS
.....RESPONDENTS
J U D G M E N T
Dr D Y CHANDRACHUD, J
Leave granted.
2 The appellant has failed in a challenge to the legality of the
Vidhayak Nidhi Scheme in the State of Uttar Pradesh which provides for
annual budgetary grants to Members of the Legislative Assembly and
Legislative Council for facilitating development work in their
constituencies.
The Allahabad High Court by a judgment and order dated 13 May 2013
dismissed the writ petition under Article 226 of the Constitution. This has
given rise to the institution of these proceedings.
3 In 1993, the Prime Minister of India announced a scheme,
popularly known by the acronym MPLADS (an abbreviation for Members of
Parliament Local Area Development Scheme). The Scheme provides for annual
budgetary grants by the Union Government to enable Members of Parliament to
recommend work of a developmental nature with an emphasis on creating
durable community assets based on local necessities in their
constituencies. The constitutional validity of the Scheme was adjudicated
upon and upheld in a judgment of a Constitution Bench of this Court
rendered on 6 May 2010 in Bhim Singh v. Union of India[1].
4 In the State of Uttar Pradesh, a scheme known as the Vidhayak
Nidhi Scheme was introduced in the State Budget in 1998-1999 with an
allocation of Rupees fifty lakhs for every Member of the Legislative
Assembly and Legislative Council. In the Budget of 2000-2001, the
allocation under the Scheme was enhanced to Rupees seventy five lakhs. The
appellant moved the High Court in its writ jurisdiction in 2004 seeking to
challenge the constitutionality of the Vidhayak Nidhi Scheme and for
obtaining an order restraining the state from enhancing the budgetary
outlay from Rupees seventy five lakhs to one crore per MLA/MLC, as was
proposed. The appellant submitted that if the challenge to the validity of
the Scheme is not accepted, then in the alternative, the moneys allocated
under the Scheme should be permitted to be utilized only for meeting the
expenditure on schemes which have been sanctioned under the district plan
pursuant to the provisions of Article 243ZD and the U P District Planning
Committee Act, 1999.
5 The primary submission of the appellant before the High Court (and in
these proceedings under Article 136 of the Constitution as well) is that
the field of development plans for districts is occupied by virtue of the
provisions contained in Article 243ZD and the enactment of the state
legislature noted above. According to the appellant, it is only the
District Planning Committee which can identify or approve of a development
plan. Hence, it was urged that elected representatives of the state
legislature cannot be permitted to select a scheme other than what is
within the purview of an approved development plan prepared by the District
Planning Committees under the state legislation of 1999. The judgment of
the Constitution Bench of this Court in Bhim Singh (Supra) had been
rendered during the pendency of the writ petition in the High Court. The
appellant sought to make a distinction between crucial aspects of MPLADS
which distinguish from the Vidhayak Nidhi Scheme in Uttar Pradesh.
Moreover, it was urged that the judgment of the Constitution Bench would
not conclude the issue since Article 243ZD and the provisions of the state
legislation of 1999 would apply to the state scheme (and not MPLADS).
6 The Division Bench of the High Court held that there is no
distinction between MPLADS and the Vidhayak Nidhi Scheme since under both
the central and the state schemes, the recommended work has to relate to
one district or the other within the country. The High Court adopted the
view that the power of identifying and recommending work of a developmental
nature conferred upon the elected representatives – be they Members of
Parliament under MPLADS or MLAs/MLCs under the state scheme is supplemental
to the power vested in the District Planning Committee constituted under
the state legislation. Hence, while dismissing the writ petition, the High
Court held that the judgment of the Constitution Bench in Bhim Singh was
dispositive of the controversy.
7 In the concluding part of its judgment and order, the High Court
dwelt on the grievance which was urged by the appellant on the lack of
accountability in respect of moneys disbursed under the scheme and certain
allegations of the misuse of funds which the appellant had addressed,
primarily based on certain newspaper reports. The High Court granted
liberty to the appellant to formulate its suggestions for consideration by
the Principal Secretaries in the Department of Planning and Development and
the Legislative Department of the State Government. Dealing with that
aspect, the High Court observed as follows :
“Since the main prayer in this writ petition has already been discussed
above and not found acceptable, the writ petition is dismissed but liberty
is granted to the appellant to formulate its suggestion for consideration
by the Principal Secretary, Planning and Development, U.P. Government as
well as Principal Secretary, Legislative Department, U.P. Government. We
are also of the view that suggestion should receive serious consideration
of all the concerned authorities for the simple reason that public money
should always be accountable and State has a duty to take all possible
steps to prevent misuse of public money particularly when murmur against
perceived misuse of Vidhayak Nidhi is becoming more audible. We expect the
authorities to act in the matter with due sincerity and promptitude so that
there is no occasion for any further public interest litigation in the
matter.” (emphasis supplied)
Aggrieved by the inaction of the State Government in dealing with the
representation submitted by it, the appellant moved a contempt petition
before the High Court. Eventually, an order was passed by the Principal
Secretary in the Rural Development Department of the State Government on 21
May 2014 and by the Principal Secretary in the Planning Department on 17
June 2014.
8 Article 243ZD is in Part IXA of the Constitution which deals with
Municipalities. Parts IX (which deals with Panchayats) and IXA were
introduced by the seventy third and seventy fourth constitutional
amendments. Article 243ZD provides for the constitution of District
Planning Committees for every district in each state for the preparation of
a draft developmental plan for the district as a whole. The provision also
enables the legislature of each state to enact legislation setting down the
composition of the District Planning Committees, the manner in which seats
on the Committees shall be filled up and the functions of the Committees,
relating to district planning among other things Article 243ZD is as
follows :
“243ZD. Committee for district planning
(1) There shall be constituted in every State at the district level a
District Planning Committee to consolidate the plans prepared by the
Panchayats and the Municipalities in the district and to prepare a draft
development plan for the district as a whole;
(2) The Legislature of a State may, by law, make provision, with respect to-
(a) the composition of the District Planning Committees;
(b) the manner in which the seats in such Committees shall be filled:
Provided that no less than four-fifths of the total number of members of
such Committee shall be elected by, and from amongst, the elected members
of the Panchayat at the district level and of the Municipalities in the
district in proportion to the ratio between the population of the rural
areas and of the urban areas in the district;
(c) the functions relating to district planning which may be assigned to
such Committees;
(d) the manner in which the Chairpersons of such Committees shall be
chosen.
(3) Every District Planning Committee shall, in preparing the draft
development plan-
(a) have regard to-
(i) matters of common interest between the Panchayats and the
Municipalities including spatial planning, sharing of water and other
physical and natural resources, the integrated development of
infrastructure and environmental conservation;
(ii) the extent and type of available resources whether financial and
otherwise;
(b) consult such institutions and organizations as the Governor may, by
order, specify.
(4) The Chairperson of every District Planning Committee shall forward the
development plan, as recommended by such Committee, to the Government of
the State.”
9 In preparing the draft development plans, the District Planning
Committee is to have regard to the matters of common interest between
panchayats and municipalities including spatial planning, sharing of water
and other physical or natural resources and the integrated development of
infrastructure and environmental conservation. Moreover, each committee
must have due regard to the available resources, financial and otherwise.
10 In exercise of the power conferred by clause (2) of Article 243ZD,
the state legislature of Uttar Pradesh enacted the U P District Planning
Act, 1999 to effectuate the constitutional provisions for the setting up of
District Committees and for the preparation of development plans for the
districts. The importance of the provisions of Article 243ZD has been
noticed in a judgment of a Bench of two learned Judges of this Court in
Rajendra Shankar Shukla v. State of Chhattisgarh[2] :
“17. After the insertion of Part IXA in the Constitution, development plan
for a district can only be drawn by the democratically elected
representative body i.e. DPC, by taking into account the factors mentioned
in clauses (3)(a)(i) and (ii)of Article 243ZD. As per clause (4) of
Article 243ZD, the Chairman of other DPC shall forward the
development plan as recommended by the Committee to the Government of the
State.”
Emphasising the importance of the role of the District Planning Committee,
this Court held that it is not open to a development authority to
unilaterally prepare a development scheme resulting in a re-constitution of
land without taking into consideration the opinion and suggestions of a
democratically elected body such as the District Planning Committee.
11 Basing its submissions on the provisions of Article 243ZD and the
state legislation of 1999, the appellant contends that the entire field
stands occupied by the law made by the state legislature pursuant to the
Constitution. Hence, it has been urged that it is not open to the State
Government by means of executive action, as manifested in the formulation
of the Vidhayak Nidhi Scheme to permit elected members of the state
legislature to select development work in their constituencies which may
not accord with the development plans formulated by the District Planning
Committees. To the extent that the scheme allows a departure, it has been
urged that it would be ultra-vires. Alternatively, it has been suggested
that the scheme may be confined to allowing elected members of the state
legislature to recommend only such work as is duly sanctioned under the
development plans prepared by the District Planning Committees. In this
context, it has been submitted that the above issue, which was sought to be
canvassed before the High Court in the present case, was not considered in
the judgment of the Constitution Bench in Bhim Singh, since it would not
arise in relation to MPLADS which was in question in that case.
12 In the judgment of Bhim Singh, the Constitution Bench upheld the
validity of MPLADS. The conclusions in the judgment are summarised below :
MPLADS is intra-vires Article 282 as it falls within the meaning of the
expression “public purpose” by aiming towards the fulfilment of
developmental needs;
a mere allegation of the misuse of funds would not justify invalidating the
scheme especially since the scheme provides for several layers of
accountability;
there is no violation of the doctrine of separation of powers inasmuch as
MPLADS is effectively controlled and implemented by the district
authorities with adequate safeguards under the applicable guidelines; and
the role of Members of Parliament under MPLADS is limited to the initial
choice of developmental work in the area, whereas the verification of
eligibility and feasibility of the recommended work and its sanctioning and
execution is carried out by local authorities or administrative bodies. It
is the district authorities which identify the agency through which a
particular kind of work should be executed and Panchayati Raj Institutions
and Urban Local Bodies are preferred agencies for implementation of work
under MPLAD.
In Bhim Singh, the Constitution Bench while upholding the validity of
MPLADS held that the scheme supplements the efforts of the states and local
authorities. Moreover, the scheme was held not to be an interference in the
functional or financial domain of the local planning authorities. In that
context, the Constitution Bench observed thus :
“76. Further, the Scheme only supplements the efforts of the State and
other local authorities and does not seek to interfere in the functional as
well as financial domain of the local planning authorities of the State. On
the other hand, it only strengthens the welfare measures taken by them. The
Scheme in its present form, does not override any powers vested in the
State Government or the local authority. The implementing authorities can
sanction a scheme subject to compliance with the local laws.”
13 The impact of the provisions of the Seventy third and Seventy fourth
amendments to the Constitution by which Parts IX and IXA were introduced
also came up for deliberation in the course of the judgment. The grievance
of the appellants was that MPLADS introduced a decision making authority
which is extraneous to Parts IX and IXA. The submission was noted in the
following terms :
“91. It is also the grievance of the appellants that with the passing of
the Seventy third and Seventy fourth Amendments to the Constitution
introducing Part IX in relation to the panchayat and Part IXA in relation
to the municipalities, the entire area of local self-government has been
entrusted to the panchayats under Article 243-G read with Schedule 11 and
the municipalities under Articles 243-W, 243-ZD and 243-ZE read with
Schedule 12 of the Constitution. According to them the MPLAD Scheme is
inconsistent with Parts IX and IX-A insofar as the entire decision-making
process in regard to community infrastructure of works of development
nature for creation of durable community assets including drinking water,
primary education, public health, sanitation and roads, etc is given to the
Members of Parliament even though the decision-making process in regard to
these very same matters is conferred to the panchayats and municipalities.
The MPLAD Scheme, according to them, is in direct conflict with Parts IX
and IX-A of the Constitution. It was argued that the Scheme introduces a
foreign element which takes over part of the functions of the panchayats
and municipalities.”
14 However, in response to the submission, the Constitution Bench held
that the function of a Member of Parliament under the applicable guidelines
is merely to recommend a piece of work. The district authority is entrusted
with the absolute authority to decide upon the feasibility of the work
recommended, assess to the funds required for execution, engage an
implementing agency, supervise the work and ensure financial transparency
by providing audit and utilization certificates. The Constitution Bench
observed that a major role is assigned under MPLADS to panchayats,
municipalities and corporations. Rejecting the argument of invalidity, this
Court observed as follows :
“93…The extracts of the Guidelines we have produced above make it clear
that even though the district authority is given the power to identify the
agency through which a particular work recommended by the MP should be
executed, the Panchayati Raj institutions (PRIs) will be the preferred
implementing agency in the rural areas, through the Chief Executive of the
respective PRI, and the implementing agencies in the urban areas would be
urban local bodies, through the Commissioners/Chief Executive Officers of
Municipal Corporations, municipalities”.
The submission that the scheme violated the constitutional principle of
separation of powers was accordingly repelled.
15 In the present case, relying upon the judgment in Bhim Singh, the
High Court held that the Vidhayak Nidhi Scheme only supplements the efforts
of the states and local authorities. In the view of the High Court, the
power of identifying and recommending work of a developmental nature given
to elected representatives, be they Members of Parliament or of the
Legislative Assembly or Legislative Council is supplemental to the power
conferred upon District Planning Committees and cannot be invalidated on
the ground that it cannot co-exist with the Act of 1999. The decision of
the High Court on this aspect is in consonance with the judgment of the
Constitution Bench. The Vidhayak Nidhi Scheme does not (in its true scope
and purpose) supplant or substitute the role of the District Planning
Committees constituted under the provisions of the state legislation of
1999. The guidelines which were formulated by the State Government while
announcing the scheme in 1998 are material and have been adverted to in the
order passed by the Secretary, Rural Development on 21 May 2014. Para 1.1
of the guidelines states that the Chief Minister had declared the
constitution of a fund of Rupees two hundred and sixty crores to provide an
outlay of Rupees fifty lakhs per year to elected representatives of the
state legislature to facilitate development work within their areas to meet
local requirements and in the interest of balanced development. Para 2.2
provides that the construction work would be developmental in nature for
the creation of local assets and funds shall not be utilized for meeting
revenue expenditure. Para 4.2 envisages that audit of the amount to be
spent from the MLA fund would be conducted by the Rural Development
Department. The technical audit of construction works carried out every
year would be made by the technical audits cell. In order to ensure
transparency, every citizen would be entitled to have information in regard
to the particulars of work being carried out through the service provider
agency/Rural Development Department. Under para 5.1, the Chief
Developmental Officer is appointed as Nodal Officer to maintain
coordination between the State Government and the Rural Development
Department. There are provisions for the inspection of the development work
by the Chief Development Officer and by the officers at the sub-regional
and divisional levels. The Chief Development Officer who is appointed as a
Nodal Officer is also associated with the District Planning Monitoring
Committee. Consequently, the Chief Development Officer is entrusted with
the work of ensuring that there is no duplication of work. The examination
of the work recommended by the elected representatives is made by the Chief
Development Officer. The fund is maintained through the District Rural
Development Agency which together with the technical committee is required
to inspect the work carried out under the scheme. A further government
order has been issued on 29 November 2012 for clarifying certain
ambiguities in the scheme.
16 The aspect which merits careful attention is the grievance of the
appellant that the High Court failed to notice critical differences between
MPLADS and the Vidhayak Nidhi Scheme though these were pleaded specifically
in the affidavits filed. These differences have a bearing on the role which
is assigned to the elected representatives in the decision making process.
17 In Bhim Singh, this Court had upon a careful analysis of the
guidelines framed under MPLADS noted that the function of a Member of
Parliament under clause 3.1 is merely to “recommend a work”. On the other
hand, the district authorities are assigned with the authority to decide
upon the feasibility of the work recommended, assess the requirement of
funds, engage the implementation agency, supervise the work and to ensure
financial transparency in the form of audit and utilization certificates.
Moreover, though the district authority is given the power to identify the
implementing agency which would execute the work recommended by the elected
representatives, panchayati raj institutions are the preferred implementing
agencies in the rural areas while in urban areas it would be urban local
bodies who would have a preferred position for implementation under MPLADS.
It was having due regard to these facets of the scheme that this Court in
Bhim Singh rejected the submission that the scheme had taken over the
functions of panchayats and municipalities under Parts IX and IXA of the
Constitution.
18 In the present case, the State Government filed a counter affidavit
through its Special Secretary in the Rural Development Department before
the High Court. Dealing with the grievance in the writ petition, the
Special Secretary set out the role which is assigned to the elected
representatives in the context of the Vidhayak Nidhi Scheme, thus :
“…..The role of Members of Legislative Assembly and Members of Legislative
Council is to identify the priorities of developmental works for their
constituencies and recommend the same to Chief Development Officer of the
concerned district, who implement the work in accordance with the
guidelines and Government Orders relating to the Vidhayak Nidhi.”
The appellant filed an affidavit on 10 October 2011 specifically in the
context of the judgment of this Court in Bhim Singh. The affidavit makes a
grievance of the fact that unlike MPLADS, where urban local bodies for
urban areas and panchayati raj institutions in rural areas are to be the
preferred implementing agencies, in the case of the Vidhayak Nidhi Scheme
not only the implementing agency but the contractor is also usually of the
choice of the MLA/MLC. The grievance of the appellant is as follows :
“Again, unlike the MPLAD Scheme, (Para 97(7) of the judgment) under
Vidhayak Nidhi Scheme the Municipal and Panchayati Raj institutions have
been denuded of their role and jurisdiction. Under Para 2.11 of the MPLAD
Scheme urban local bodies in the urban area and panchayati raj institutions
in the rural areas have to be the preferred implementing agency. This
caveat is missing in the case of Vidhayak Nidhi. Moreover, Not only the
implementing agency but also the contractor is usually the choice of the
MLA/MLC leading to scope for wide spread corruption in the execution of the
works under the scheme.”
(emphasis supplied)
Again, this was reiterated in the following extracts in the same affidavit
:
“The checks and balances stipulated in the case of MPLAD are not
available in the case of Vidhayak Nidhi. While under MPLAD Scheme the role
of MP is theoretically limited to recommending a work, under para 3.1 of
the Vidhayak Nidhi scheme, consent of the MLA/MLC is required not only for
selection of the work but also for its sanction which includes the location
and cost thereof, and the selection of implementing agency. This makes
them the de facto sanctioning authority for the work. Thus, the function
of sanctioning these works is performed by them as it is subject to their
veto.” (emphasis supplied)
19 The grievance of the appellant is also that unlike MPLADS, the
Vidhayak Nidhi Scheme has been used to finance buildings belonging to
private organizations, which explains why there was a clamour to give money
to schools controlled by the MLA/MLC or by the members of his or her
family. This, it was submitted was resulting in a misappropriation of
public funds since the construction of school buildings can be implemented
through the principal/manager. Hence, it was asserted that the
accountability mechanism which this Court found to be existing in MPLADS is
absent under the Vidhayak Nidhi Scheme.
20 The State Government has not dealt with this grievance of the
appellant either in the pleadings filed in the course of the proceedings
before the High Court or in the counter affidavit which has been filed
before this Court. The grievance that unlike MPLADS, the role of the
elected representatives of the state legislature goes beyond merely
recommending the work has remained uncontroverted. The judgment of this
Court in Bhim Singh emphasised that MPLADS merely supplements the welfare
schemes of the states and other local authorities and does not interfere in
the functional or financial domain of the local planning authorities. In
that context, it was noted on the basis of the guidelines that the role of
the elected representatives is confined merely to recommending the work
which is to be carried out. Thereafter, the decision making process
commencing from the assessment of the feasibility of the work, estimation
of the funds required and selection of the implementing agency as well as
the work of supervision is entrusted to the competent authorities in the
district levels. The provisions of Parts IX and IXA of the Constitution are
duly observed since panchayati raj institutions in the rural areas and
urban local bodies in the urban areas are to be the preferred implementing
agencies under MPLADS. The State Government ought to have applied its mind
to these crucial aspects which distinguish MPLADS from the Vidhayak Nidhi
Scheme. When the Division Bench of the High Court delivered its judgment on
30 May 2013, it emphasised the need for ensuring accountability in regard
to public moneys and to the duty of the state to take all possible steps to
prevent their misuse. The Division Bench noted that the “murmur against
perceived misuse of Vidhayak Nidhi is becoming more audible”. It was in
this view, that a direction was issued to the Principal Secretaries in the
Planning and Development Department and in the Legislative Department to
take heed of the suggestions of the appellants with “sincerity and
promptitude”. The State Government in the two orders which have been passed
by its Principal Secretaries on 21 May 2014 and 17 June 2014 paid only lip
service to the grievance of the appellant. The principles which have been
formulated in the judgment of the Constitution Bench in Bhim Singh have not
even been noticed nor has any attempt been made on the part of the State
Government to ensure that the guidelines which govern the Vidhayak Nidhi
Scheme are brought in consonance with the provisions of Parts IX and IXA of
the Constitution and the observations contained in the judgment of this
Court in Bhim Singh. Hence, while we are of the view that there can be no
objection to the state implementing a scheme of the nature that was upheld
by the Constitution Bench in Bhim Singh, the safeguards which form a part
of the MPLAD Scheme should be duly considered so as to ensure that the role
which is ascribed to the district planning authorities and institutions of
local self-governance is not denuded. The safeguards which must be
introduced shall include the following :
the role of the elected representatives would be to recommend the work of a
developmental nature in their constituencies within the budget allotted
under the Scheme;
the feasibility of the work, estimate of funds, selection of the
implementing agency and supervision of work must be independently
determined by a nominated authority or body of the State government;
panchayati raj institutions in rural areas and municipal bodies in urban
areas may be considered as preferred implementing agencies having regard to
the entrustment of responsibilities under Parts IX and IXA of the
Constitution;
the plans prepared by the District Planning Committees under Article 243ZD
read with the U P District Planning Committee Act, 1999 may be made
available by every district Collector to elected representatives to enable
them to decide whether any developmental work which has already been
identified in the above plan should be executed in pursuance of the funds
made available under the Vidhayak Nidhi Scheme; and
sufficient safeguards should be provided to ensure against conflicts of
interest such as the allocation of funds to institutions controlled by an
elected representative or a member of his or her family; and
The scheme must include sufficient safeguards to ensure financial
transparency, such as proper supervision of work, monitoring quality and
timely completion besides procedures to ensure proper audit and utilization
of funds.
21 We are in agreement with the view of the High Court that the Vidhayak
Nidhi Scheme does not per se violate Article 243ZD or the U P Planning and
Developmental Act, 1999. Elected representatives have a vital role in
democracy. They have an intrinsic connection with their constituencies and
have a legitimate role to discharge in meeting the development needs of
their constituencies. Article 243ZD does not exclude their role. On the
contrary, they perform a supplemental role by enhancing and supporting the
work of the institutions of local self-governance. However, it is in our
view necessary that the guidelines which have been formulated by the State
Government are revisited and the directions set out above are complied with
so as to ensure that the guidelines are in conformity with the spirit and
underlying purpose of Parts IX and IXA of the Constitution in terms as held
by the Constitution Bench of this Court in Bhim Singh. The revised
guidelines shall apply to all projects to be undertaken hereafter under the
Vidhayak Nidhi Scheme. This exercise shall be completed by the State
Government not later than a period of two months from the receipt of the
present judgment. The appeal shall accordingly stand disposed of in the
above terms. There shall be no order as to costs.
..................................... CJI
[T S THAKUR]
.........................................J
[A M KHANWILKAR]
...........................................J
[Dr D Y CHANDRACHUD]
New Delhi
November 21, 2016.
-----------------------
[1] [2] (2010) 5 SCC 538
[3]
[4] (2015) 10 SCC 400
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No 11004 OF 2016
[Arising out of SLP (C) No. 33119 of 2013]
LOK PRAHARI THR.
ITS GNRL. SECY, S N SHUKLA .....APPELLANT
Versus
STATE OF U P AND ORS
.....RESPONDENTS
J U D G M E N T
Dr D Y CHANDRACHUD, J
Leave granted.
2 The appellant has failed in a challenge to the legality of the
Vidhayak Nidhi Scheme in the State of Uttar Pradesh which provides for
annual budgetary grants to Members of the Legislative Assembly and
Legislative Council for facilitating development work in their
constituencies.
The Allahabad High Court by a judgment and order dated 13 May 2013
dismissed the writ petition under Article 226 of the Constitution. This has
given rise to the institution of these proceedings.
3 In 1993, the Prime Minister of India announced a scheme,
popularly known by the acronym MPLADS (an abbreviation for Members of
Parliament Local Area Development Scheme). The Scheme provides for annual
budgetary grants by the Union Government to enable Members of Parliament to
recommend work of a developmental nature with an emphasis on creating
durable community assets based on local necessities in their
constituencies. The constitutional validity of the Scheme was adjudicated
upon and upheld in a judgment of a Constitution Bench of this Court
rendered on 6 May 2010 in Bhim Singh v. Union of India[1].
4 In the State of Uttar Pradesh, a scheme known as the Vidhayak
Nidhi Scheme was introduced in the State Budget in 1998-1999 with an
allocation of Rupees fifty lakhs for every Member of the Legislative
Assembly and Legislative Council. In the Budget of 2000-2001, the
allocation under the Scheme was enhanced to Rupees seventy five lakhs. The
appellant moved the High Court in its writ jurisdiction in 2004 seeking to
challenge the constitutionality of the Vidhayak Nidhi Scheme and for
obtaining an order restraining the state from enhancing the budgetary
outlay from Rupees seventy five lakhs to one crore per MLA/MLC, as was
proposed. The appellant submitted that if the challenge to the validity of
the Scheme is not accepted, then in the alternative, the moneys allocated
under the Scheme should be permitted to be utilized only for meeting the
expenditure on schemes which have been sanctioned under the district plan
pursuant to the provisions of Article 243ZD and the U P District Planning
Committee Act, 1999.
5 The primary submission of the appellant before the High Court (and in
these proceedings under Article 136 of the Constitution as well) is that
the field of development plans for districts is occupied by virtue of the
provisions contained in Article 243ZD and the enactment of the state
legislature noted above. According to the appellant, it is only the
District Planning Committee which can identify or approve of a development
plan. Hence, it was urged that elected representatives of the state
legislature cannot be permitted to select a scheme other than what is
within the purview of an approved development plan prepared by the District
Planning Committees under the state legislation of 1999. The judgment of
the Constitution Bench of this Court in Bhim Singh (Supra) had been
rendered during the pendency of the writ petition in the High Court. The
appellant sought to make a distinction between crucial aspects of MPLADS
which distinguish from the Vidhayak Nidhi Scheme in Uttar Pradesh.
Moreover, it was urged that the judgment of the Constitution Bench would
not conclude the issue since Article 243ZD and the provisions of the state
legislation of 1999 would apply to the state scheme (and not MPLADS).
6 The Division Bench of the High Court held that there is no
distinction between MPLADS and the Vidhayak Nidhi Scheme since under both
the central and the state schemes, the recommended work has to relate to
one district or the other within the country. The High Court adopted the
view that the power of identifying and recommending work of a developmental
nature conferred upon the elected representatives – be they Members of
Parliament under MPLADS or MLAs/MLCs under the state scheme is supplemental
to the power vested in the District Planning Committee constituted under
the state legislation. Hence, while dismissing the writ petition, the High
Court held that the judgment of the Constitution Bench in Bhim Singh was
dispositive of the controversy.
7 In the concluding part of its judgment and order, the High Court
dwelt on the grievance which was urged by the appellant on the lack of
accountability in respect of moneys disbursed under the scheme and certain
allegations of the misuse of funds which the appellant had addressed,
primarily based on certain newspaper reports. The High Court granted
liberty to the appellant to formulate its suggestions for consideration by
the Principal Secretaries in the Department of Planning and Development and
the Legislative Department of the State Government. Dealing with that
aspect, the High Court observed as follows :
“Since the main prayer in this writ petition has already been discussed
above and not found acceptable, the writ petition is dismissed but liberty
is granted to the appellant to formulate its suggestion for consideration
by the Principal Secretary, Planning and Development, U.P. Government as
well as Principal Secretary, Legislative Department, U.P. Government. We
are also of the view that suggestion should receive serious consideration
of all the concerned authorities for the simple reason that public money
should always be accountable and State has a duty to take all possible
steps to prevent misuse of public money particularly when murmur against
perceived misuse of Vidhayak Nidhi is becoming more audible. We expect the
authorities to act in the matter with due sincerity and promptitude so that
there is no occasion for any further public interest litigation in the
matter.” (emphasis supplied)
Aggrieved by the inaction of the State Government in dealing with the
representation submitted by it, the appellant moved a contempt petition
before the High Court. Eventually, an order was passed by the Principal
Secretary in the Rural Development Department of the State Government on 21
May 2014 and by the Principal Secretary in the Planning Department on 17
June 2014.
8 Article 243ZD is in Part IXA of the Constitution which deals with
Municipalities. Parts IX (which deals with Panchayats) and IXA were
introduced by the seventy third and seventy fourth constitutional
amendments. Article 243ZD provides for the constitution of District
Planning Committees for every district in each state for the preparation of
a draft developmental plan for the district as a whole. The provision also
enables the legislature of each state to enact legislation setting down the
composition of the District Planning Committees, the manner in which seats
on the Committees shall be filled up and the functions of the Committees,
relating to district planning among other things Article 243ZD is as
follows :
“243ZD. Committee for district planning
(1) There shall be constituted in every State at the district level a
District Planning Committee to consolidate the plans prepared by the
Panchayats and the Municipalities in the district and to prepare a draft
development plan for the district as a whole;
(2) The Legislature of a State may, by law, make provision, with respect to-
(a) the composition of the District Planning Committees;
(b) the manner in which the seats in such Committees shall be filled:
Provided that no less than four-fifths of the total number of members of
such Committee shall be elected by, and from amongst, the elected members
of the Panchayat at the district level and of the Municipalities in the
district in proportion to the ratio between the population of the rural
areas and of the urban areas in the district;
(c) the functions relating to district planning which may be assigned to
such Committees;
(d) the manner in which the Chairpersons of such Committees shall be
chosen.
(3) Every District Planning Committee shall, in preparing the draft
development plan-
(a) have regard to-
(i) matters of common interest between the Panchayats and the
Municipalities including spatial planning, sharing of water and other
physical and natural resources, the integrated development of
infrastructure and environmental conservation;
(ii) the extent and type of available resources whether financial and
otherwise;
(b) consult such institutions and organizations as the Governor may, by
order, specify.
(4) The Chairperson of every District Planning Committee shall forward the
development plan, as recommended by such Committee, to the Government of
the State.”
9 In preparing the draft development plans, the District Planning
Committee is to have regard to the matters of common interest between
panchayats and municipalities including spatial planning, sharing of water
and other physical or natural resources and the integrated development of
infrastructure and environmental conservation. Moreover, each committee
must have due regard to the available resources, financial and otherwise.
10 In exercise of the power conferred by clause (2) of Article 243ZD,
the state legislature of Uttar Pradesh enacted the U P District Planning
Act, 1999 to effectuate the constitutional provisions for the setting up of
District Committees and for the preparation of development plans for the
districts. The importance of the provisions of Article 243ZD has been
noticed in a judgment of a Bench of two learned Judges of this Court in
Rajendra Shankar Shukla v. State of Chhattisgarh[2] :
“17. After the insertion of Part IXA in the Constitution, development plan
for a district can only be drawn by the democratically elected
representative body i.e. DPC, by taking into account the factors mentioned
in clauses (3)(a)(i) and (ii)of Article 243ZD. As per clause (4) of
Article 243ZD, the Chairman of other DPC shall forward the
development plan as recommended by the Committee to the Government of the
State.”
Emphasising the importance of the role of the District Planning Committee,
this Court held that it is not open to a development authority to
unilaterally prepare a development scheme resulting in a re-constitution of
land without taking into consideration the opinion and suggestions of a
democratically elected body such as the District Planning Committee.
11 Basing its submissions on the provisions of Article 243ZD and the
state legislation of 1999, the appellant contends that the entire field
stands occupied by the law made by the state legislature pursuant to the
Constitution. Hence, it has been urged that it is not open to the State
Government by means of executive action, as manifested in the formulation
of the Vidhayak Nidhi Scheme to permit elected members of the state
legislature to select development work in their constituencies which may
not accord with the development plans formulated by the District Planning
Committees. To the extent that the scheme allows a departure, it has been
urged that it would be ultra-vires. Alternatively, it has been suggested
that the scheme may be confined to allowing elected members of the state
legislature to recommend only such work as is duly sanctioned under the
development plans prepared by the District Planning Committees. In this
context, it has been submitted that the above issue, which was sought to be
canvassed before the High Court in the present case, was not considered in
the judgment of the Constitution Bench in Bhim Singh, since it would not
arise in relation to MPLADS which was in question in that case.
12 In the judgment of Bhim Singh, the Constitution Bench upheld the
validity of MPLADS. The conclusions in the judgment are summarised below :
MPLADS is intra-vires Article 282 as it falls within the meaning of the
expression “public purpose” by aiming towards the fulfilment of
developmental needs;
a mere allegation of the misuse of funds would not justify invalidating the
scheme especially since the scheme provides for several layers of
accountability;
there is no violation of the doctrine of separation of powers inasmuch as
MPLADS is effectively controlled and implemented by the district
authorities with adequate safeguards under the applicable guidelines; and
the role of Members of Parliament under MPLADS is limited to the initial
choice of developmental work in the area, whereas the verification of
eligibility and feasibility of the recommended work and its sanctioning and
execution is carried out by local authorities or administrative bodies. It
is the district authorities which identify the agency through which a
particular kind of work should be executed and Panchayati Raj Institutions
and Urban Local Bodies are preferred agencies for implementation of work
under MPLAD.
In Bhim Singh, the Constitution Bench while upholding the validity of
MPLADS held that the scheme supplements the efforts of the states and local
authorities. Moreover, the scheme was held not to be an interference in the
functional or financial domain of the local planning authorities. In that
context, the Constitution Bench observed thus :
“76. Further, the Scheme only supplements the efforts of the State and
other local authorities and does not seek to interfere in the functional as
well as financial domain of the local planning authorities of the State. On
the other hand, it only strengthens the welfare measures taken by them. The
Scheme in its present form, does not override any powers vested in the
State Government or the local authority. The implementing authorities can
sanction a scheme subject to compliance with the local laws.”
13 The impact of the provisions of the Seventy third and Seventy fourth
amendments to the Constitution by which Parts IX and IXA were introduced
also came up for deliberation in the course of the judgment. The grievance
of the appellants was that MPLADS introduced a decision making authority
which is extraneous to Parts IX and IXA. The submission was noted in the
following terms :
“91. It is also the grievance of the appellants that with the passing of
the Seventy third and Seventy fourth Amendments to the Constitution
introducing Part IX in relation to the panchayat and Part IXA in relation
to the municipalities, the entire area of local self-government has been
entrusted to the panchayats under Article 243-G read with Schedule 11 and
the municipalities under Articles 243-W, 243-ZD and 243-ZE read with
Schedule 12 of the Constitution. According to them the MPLAD Scheme is
inconsistent with Parts IX and IX-A insofar as the entire decision-making
process in regard to community infrastructure of works of development
nature for creation of durable community assets including drinking water,
primary education, public health, sanitation and roads, etc is given to the
Members of Parliament even though the decision-making process in regard to
these very same matters is conferred to the panchayats and municipalities.
The MPLAD Scheme, according to them, is in direct conflict with Parts IX
and IX-A of the Constitution. It was argued that the Scheme introduces a
foreign element which takes over part of the functions of the panchayats
and municipalities.”
14 However, in response to the submission, the Constitution Bench held
that the function of a Member of Parliament under the applicable guidelines
is merely to recommend a piece of work. The district authority is entrusted
with the absolute authority to decide upon the feasibility of the work
recommended, assess to the funds required for execution, engage an
implementing agency, supervise the work and ensure financial transparency
by providing audit and utilization certificates. The Constitution Bench
observed that a major role is assigned under MPLADS to panchayats,
municipalities and corporations. Rejecting the argument of invalidity, this
Court observed as follows :
“93…The extracts of the Guidelines we have produced above make it clear
that even though the district authority is given the power to identify the
agency through which a particular work recommended by the MP should be
executed, the Panchayati Raj institutions (PRIs) will be the preferred
implementing agency in the rural areas, through the Chief Executive of the
respective PRI, and the implementing agencies in the urban areas would be
urban local bodies, through the Commissioners/Chief Executive Officers of
Municipal Corporations, municipalities”.
The submission that the scheme violated the constitutional principle of
separation of powers was accordingly repelled.
15 In the present case, relying upon the judgment in Bhim Singh, the
High Court held that the Vidhayak Nidhi Scheme only supplements the efforts
of the states and local authorities. In the view of the High Court, the
power of identifying and recommending work of a developmental nature given
to elected representatives, be they Members of Parliament or of the
Legislative Assembly or Legislative Council is supplemental to the power
conferred upon District Planning Committees and cannot be invalidated on
the ground that it cannot co-exist with the Act of 1999. The decision of
the High Court on this aspect is in consonance with the judgment of the
Constitution Bench. The Vidhayak Nidhi Scheme does not (in its true scope
and purpose) supplant or substitute the role of the District Planning
Committees constituted under the provisions of the state legislation of
1999. The guidelines which were formulated by the State Government while
announcing the scheme in 1998 are material and have been adverted to in the
order passed by the Secretary, Rural Development on 21 May 2014. Para 1.1
of the guidelines states that the Chief Minister had declared the
constitution of a fund of Rupees two hundred and sixty crores to provide an
outlay of Rupees fifty lakhs per year to elected representatives of the
state legislature to facilitate development work within their areas to meet
local requirements and in the interest of balanced development. Para 2.2
provides that the construction work would be developmental in nature for
the creation of local assets and funds shall not be utilized for meeting
revenue expenditure. Para 4.2 envisages that audit of the amount to be
spent from the MLA fund would be conducted by the Rural Development
Department. The technical audit of construction works carried out every
year would be made by the technical audits cell. In order to ensure
transparency, every citizen would be entitled to have information in regard
to the particulars of work being carried out through the service provider
agency/Rural Development Department. Under para 5.1, the Chief
Developmental Officer is appointed as Nodal Officer to maintain
coordination between the State Government and the Rural Development
Department. There are provisions for the inspection of the development work
by the Chief Development Officer and by the officers at the sub-regional
and divisional levels. The Chief Development Officer who is appointed as a
Nodal Officer is also associated with the District Planning Monitoring
Committee. Consequently, the Chief Development Officer is entrusted with
the work of ensuring that there is no duplication of work. The examination
of the work recommended by the elected representatives is made by the Chief
Development Officer. The fund is maintained through the District Rural
Development Agency which together with the technical committee is required
to inspect the work carried out under the scheme. A further government
order has been issued on 29 November 2012 for clarifying certain
ambiguities in the scheme.
16 The aspect which merits careful attention is the grievance of the
appellant that the High Court failed to notice critical differences between
MPLADS and the Vidhayak Nidhi Scheme though these were pleaded specifically
in the affidavits filed. These differences have a bearing on the role which
is assigned to the elected representatives in the decision making process.
17 In Bhim Singh, this Court had upon a careful analysis of the
guidelines framed under MPLADS noted that the function of a Member of
Parliament under clause 3.1 is merely to “recommend a work”. On the other
hand, the district authorities are assigned with the authority to decide
upon the feasibility of the work recommended, assess the requirement of
funds, engage the implementation agency, supervise the work and to ensure
financial transparency in the form of audit and utilization certificates.
Moreover, though the district authority is given the power to identify the
implementing agency which would execute the work recommended by the elected
representatives, panchayati raj institutions are the preferred implementing
agencies in the rural areas while in urban areas it would be urban local
bodies who would have a preferred position for implementation under MPLADS.
It was having due regard to these facets of the scheme that this Court in
Bhim Singh rejected the submission that the scheme had taken over the
functions of panchayats and municipalities under Parts IX and IXA of the
Constitution.
18 In the present case, the State Government filed a counter affidavit
through its Special Secretary in the Rural Development Department before
the High Court. Dealing with the grievance in the writ petition, the
Special Secretary set out the role which is assigned to the elected
representatives in the context of the Vidhayak Nidhi Scheme, thus :
“…..The role of Members of Legislative Assembly and Members of Legislative
Council is to identify the priorities of developmental works for their
constituencies and recommend the same to Chief Development Officer of the
concerned district, who implement the work in accordance with the
guidelines and Government Orders relating to the Vidhayak Nidhi.”
The appellant filed an affidavit on 10 October 2011 specifically in the
context of the judgment of this Court in Bhim Singh. The affidavit makes a
grievance of the fact that unlike MPLADS, where urban local bodies for
urban areas and panchayati raj institutions in rural areas are to be the
preferred implementing agencies, in the case of the Vidhayak Nidhi Scheme
not only the implementing agency but the contractor is also usually of the
choice of the MLA/MLC. The grievance of the appellant is as follows :
“Again, unlike the MPLAD Scheme, (Para 97(7) of the judgment) under
Vidhayak Nidhi Scheme the Municipal and Panchayati Raj institutions have
been denuded of their role and jurisdiction. Under Para 2.11 of the MPLAD
Scheme urban local bodies in the urban area and panchayati raj institutions
in the rural areas have to be the preferred implementing agency. This
caveat is missing in the case of Vidhayak Nidhi. Moreover, Not only the
implementing agency but also the contractor is usually the choice of the
MLA/MLC leading to scope for wide spread corruption in the execution of the
works under the scheme.”
(emphasis supplied)
Again, this was reiterated in the following extracts in the same affidavit
:
“The checks and balances stipulated in the case of MPLAD are not
available in the case of Vidhayak Nidhi. While under MPLAD Scheme the role
of MP is theoretically limited to recommending a work, under para 3.1 of
the Vidhayak Nidhi scheme, consent of the MLA/MLC is required not only for
selection of the work but also for its sanction which includes the location
and cost thereof, and the selection of implementing agency. This makes
them the de facto sanctioning authority for the work. Thus, the function
of sanctioning these works is performed by them as it is subject to their
veto.” (emphasis supplied)
19 The grievance of the appellant is also that unlike MPLADS, the
Vidhayak Nidhi Scheme has been used to finance buildings belonging to
private organizations, which explains why there was a clamour to give money
to schools controlled by the MLA/MLC or by the members of his or her
family. This, it was submitted was resulting in a misappropriation of
public funds since the construction of school buildings can be implemented
through the principal/manager. Hence, it was asserted that the
accountability mechanism which this Court found to be existing in MPLADS is
absent under the Vidhayak Nidhi Scheme.
20 The State Government has not dealt with this grievance of the
appellant either in the pleadings filed in the course of the proceedings
before the High Court or in the counter affidavit which has been filed
before this Court. The grievance that unlike MPLADS, the role of the
elected representatives of the state legislature goes beyond merely
recommending the work has remained uncontroverted. The judgment of this
Court in Bhim Singh emphasised that MPLADS merely supplements the welfare
schemes of the states and other local authorities and does not interfere in
the functional or financial domain of the local planning authorities. In
that context, it was noted on the basis of the guidelines that the role of
the elected representatives is confined merely to recommending the work
which is to be carried out. Thereafter, the decision making process
commencing from the assessment of the feasibility of the work, estimation
of the funds required and selection of the implementing agency as well as
the work of supervision is entrusted to the competent authorities in the
district levels. The provisions of Parts IX and IXA of the Constitution are
duly observed since panchayati raj institutions in the rural areas and
urban local bodies in the urban areas are to be the preferred implementing
agencies under MPLADS. The State Government ought to have applied its mind
to these crucial aspects which distinguish MPLADS from the Vidhayak Nidhi
Scheme. When the Division Bench of the High Court delivered its judgment on
30 May 2013, it emphasised the need for ensuring accountability in regard
to public moneys and to the duty of the state to take all possible steps to
prevent their misuse. The Division Bench noted that the “murmur against
perceived misuse of Vidhayak Nidhi is becoming more audible”. It was in
this view, that a direction was issued to the Principal Secretaries in the
Planning and Development Department and in the Legislative Department to
take heed of the suggestions of the appellants with “sincerity and
promptitude”. The State Government in the two orders which have been passed
by its Principal Secretaries on 21 May 2014 and 17 June 2014 paid only lip
service to the grievance of the appellant. The principles which have been
formulated in the judgment of the Constitution Bench in Bhim Singh have not
even been noticed nor has any attempt been made on the part of the State
Government to ensure that the guidelines which govern the Vidhayak Nidhi
Scheme are brought in consonance with the provisions of Parts IX and IXA of
the Constitution and the observations contained in the judgment of this
Court in Bhim Singh. Hence, while we are of the view that there can be no
objection to the state implementing a scheme of the nature that was upheld
by the Constitution Bench in Bhim Singh, the safeguards which form a part
of the MPLAD Scheme should be duly considered so as to ensure that the role
which is ascribed to the district planning authorities and institutions of
local self-governance is not denuded. The safeguards which must be
introduced shall include the following :
the role of the elected representatives would be to recommend the work of a
developmental nature in their constituencies within the budget allotted
under the Scheme;
the feasibility of the work, estimate of funds, selection of the
implementing agency and supervision of work must be independently
determined by a nominated authority or body of the State government;
panchayati raj institutions in rural areas and municipal bodies in urban
areas may be considered as preferred implementing agencies having regard to
the entrustment of responsibilities under Parts IX and IXA of the
Constitution;
the plans prepared by the District Planning Committees under Article 243ZD
read with the U P District Planning Committee Act, 1999 may be made
available by every district Collector to elected representatives to enable
them to decide whether any developmental work which has already been
identified in the above plan should be executed in pursuance of the funds
made available under the Vidhayak Nidhi Scheme; and
sufficient safeguards should be provided to ensure against conflicts of
interest such as the allocation of funds to institutions controlled by an
elected representative or a member of his or her family; and
The scheme must include sufficient safeguards to ensure financial
transparency, such as proper supervision of work, monitoring quality and
timely completion besides procedures to ensure proper audit and utilization
of funds.
21 We are in agreement with the view of the High Court that the Vidhayak
Nidhi Scheme does not per se violate Article 243ZD or the U P Planning and
Developmental Act, 1999. Elected representatives have a vital role in
democracy. They have an intrinsic connection with their constituencies and
have a legitimate role to discharge in meeting the development needs of
their constituencies. Article 243ZD does not exclude their role. On the
contrary, they perform a supplemental role by enhancing and supporting the
work of the institutions of local self-governance. However, it is in our
view necessary that the guidelines which have been formulated by the State
Government are revisited and the directions set out above are complied with
so as to ensure that the guidelines are in conformity with the spirit and
underlying purpose of Parts IX and IXA of the Constitution in terms as held
by the Constitution Bench of this Court in Bhim Singh. The revised
guidelines shall apply to all projects to be undertaken hereafter under the
Vidhayak Nidhi Scheme. This exercise shall be completed by the State
Government not later than a period of two months from the receipt of the
present judgment. The appeal shall accordingly stand disposed of in the
above terms. There shall be no order as to costs.
..................................... CJI
[T S THAKUR]
.........................................J
[A M KHANWILKAR]
...........................................J
[Dr D Y CHANDRACHUD]
New Delhi
November 21, 2016.
-----------------------
[1] [2] (2010) 5 SCC 538
[3]
[4] (2015) 10 SCC 400
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