Supreme Court of India
BHIM SINGHversusUNION OF INDIA AND ORS.
- Citation
- 2010 INSC 276
- Decided
- 6 May 2010
- Disposal
- Dismissed
- Bench
- K G BALAKRISHNAN
Holding
The MPLAD Scheme is intra vires, valid under Articles 266(3), 275 and 282, does not violate separation of powers, and does not constitute an unfair electoral advantage.
Summary
The petitioners challenged the Members of Parliament Local Area Development (MPLAD) Scheme as unconstitutional, arguing that the allocation of funds from the Consolidated Fund of India violated Articles 266(3), 275, 282 and the principle of separation of powers, and gave MPs an unfair electoral advantage. The Court examined whether the scheme required a separate substantive enactment beyond the annual Appropriation Acts, whether Article 282 permitted such grants, and whether the scheme infringed on the powers of State legislatures, Panchayats, and Municipalities. It held that the Appropriation Acts satisfy the requirement of "law" under Article 266(3), that Article 282 has a wide amplitude to allow grants for public purpose, and that the MPs' role is merely recommendatory with execution vested in district authorities. The Court found that the scheme does not breach the separation of powers, does not constitute an unfair advantage under the Representation of the People Act, and is consistent with constitutional provisions. Consequently, the writ petitions and transferred cases were dismissed, upholding the MPLAD Scheme as intra vires.
Issues considered
- Whether funds earmarked for the MPLAD Scheme can be spent from the Consolidated Fund of India in accordance with Articles 266(3), 275 and 282.
- Whether a separate substantive enactment is required beyond the Appropriation Acts for the scheme.
- Whether Article 282’s grant power is restricted to special or temporary schemes.
- Whether the scheme obliterates the demarcation between legislature and executive, violating the principle of separation of powers.
- Whether the MPLAD Scheme gives MPs an unfair electoral advantage under the Representation of the People Act, 1951.
- Whether the scheme is inconsistent with Part IX and Part IX‑A (Panchayat and Municipal) provisions.
- Whether the scheme lacks adequate safeguards, checks and balances to justify judicial interference.
Legislation cited
Subjects
MPLAD SchemeArticle 266(3)Article 275Article 282public purposegrantsappropriationseparation of powersunfair advantageRepresentation of the People Actconstitutional validityaccountability
Judgment
[2010] 6 S.C.R. 218
A BHIM SINGH
v.
UNION OF INDIA AND ORS.
(Writ Petition (C) No. 21 of 1999)
MAY 6, 2-010
B
[K.G. BALAKRISHNAN, CJI., R.V. RAVEENDRAN, D.K.
JAIN, P. SATHASIVAM AND J.M. PANCHAL, JJ.)
Constitution of India, 1950:
c
Arlie/es 113, 114(3), 266(3), 282 - MPLAD scheme -
Constitutionality of - Held: Intra vires the Constitution -
Source of its power traceable to Arlicle 114(3) r. w. Arlicle
266(3) and 282 of the Constitution - Funds earmarked and
0 spent from the Consolidated Funds of Union for
implementation of scheme and thus was in accordance with
the constitutional provisions - Rules of Procedure and
Conduct of Business in Lok Sabha - rr.206 to 216.
Arlicle 266(3) - MPLAD scheme - Whether aparl from
E an appropriation by an Appropriation Act, an independent
substantive enactment is required for the scheme - Held:
·"Laws" mentioned in Article 282 would also include
Appropriation Acts - A specific or special law need not be
enacted by the Parliament to resorl to the provision - The
F MPLAD Scheme is valid as Appropriation Acts have been
duly passed year after year - Appropriation Act.
Arlie/es 275 and 282 - MPLAD Scheme - Held: Falls
within the meaning of "public purpose" aiming for the fulfilment
G of the development and welfare of the State as reflected in
the Directive Principles of State Policy.
Arlicle 282 - Scope of - Held: To be given its widest
amplitude and should be interpreted widely so that the public
H 218
SHIM SINGH v. UNION OF INDIAAND ORS. 219
purpose enshrined therein can effectively be achieved both A
by the Union and the States to advance Directive Principles
of State policy.
Article 282, seventh schedule - Public purpose - Power
of Union and State to make grants - Held: Indian Constitution
8
is quasi-federal - Owing to the quasi-federal nature of the
Constitution and the specific wording of Article 282, both the
Union and the State have power to make grants on subjects
irrespective of whether they lie in the 7th Schedule, provided
they are in public interest.
c
Separation of powers - MPLAD Scheme - Whether
violate the principle of Separation of powers under the
Constitution - Held: Indian Constitution does not recognize
strict separation of powers - Constitutional principle of
separation of powers would be violated if an essential function D
of one branch is taken over by another branch, leading to a
removal of checks and balances - Under MPLAD scheme
though MPs have been given a seemingly executive function,
their role is limited to 'recommending' works - Actual
implementation is done by the local authorities - There is no E
removal of checks and balances since these are duly ·
provided and have to be strictly adhered to by the guidelines
of the Scheme and the Parliament - Therefore, the Scheme
does not violate separation of powers - Panchayat Raj
Institutions, Municipal as well as local bodies are also not F
denuded of their role or jurisdiction by the Scheme as due
place has been accorded to them by the guidelines, in the
implementation of the scheme.
Accountability under the MPLAD scheme - Role of MP
in the scheme - Held: Every MP is authorised to only G
recommend such works which are of general public utility in
his own constituency - Role of MP is very limited to the initial
choice of a selection of projects subject to approval of the
District Authority/Commissioner or Municipal authority - Mere
a/legation of misuse of funds under the scheme by some MPs H
220 SUPREME COURT REPORTS [2010) 6 S.C.R.
A by itself may not be a ground for scrapping of the scheme as
checks and safeguards are provided therein.
Funds made available to sitting MPs for developmental
work under the MPLAD scheme - Claim that these works
would amount to an unfair advantage or corrupt practices
8
within the meaning of the Representation of the Peoples Act,
1951 - Held: Not maintainable - If funds are utilised by MPs
for development work which result in his better performance
and if that leads to people voting for the incumbent candidate,
it certainly would not violate any principle of free and fair
C elections - It cannot be claimed that these works amount to
an unfair advantage or corrupt practices - Representation of
the Peoples Act, 1951 - Unfair practice .
Interpretation of Constitution Every Article of the
D Constitution should be given not only the widest possible
interpretation, but also a flexible interpretation to meet all
possible contingencies which may arise even in the future.
Administrative law: Government action - Judicial
E interference - Held: Permissible when the action of the
government is unconstitutional and not when such action is
not wise or that the extent of expenditure is not for the good
of the State.
Words and phrases:
F
Appropriation bill, Cut motion, money bill - Meaning of.
Expression 'public purpose - Meaning of, in the context
of Article 282 of the Constitution of India, 1950.
G On 23.12.1993, Members of Parliament Local Area
Development (MPLAD) Scheme was formulated for
enabling the Members of Parliament to identify works of
developmental nature with creation of durab~ community
assets of national priorities such as drinking water,
H primary education, public health, sanitation and roads.
BHIM SINGH v. UNION OF INDIAAND ORS. 221
Petitioner filed writ petitions under Article 32 of the A
Constitution, challenging the MPLAD Scheme as
ultravires of the Constitution and prayed for direction for
scrapping of the scheme and for impartial investigation
for the misuse of the funds allocated in the Scheme.
B
The questions which arose for consideration in the
writ petitions and the transferred cases were whether the
funds earmarked and spent from the Consolidated Funds
of Union for implementation of MPLAD scheme was in
accordance with the constitutional provisions; whether C
having regard to Article 266(3) of the Constitution apart
from an appropriation by an Appropriation Act, an
independent substantive enactment was required for the
scheme; whether the power under Article 282 was
restricted; whether the Scheme obliterates the
demarcation between the legislature and the executive by D
making MPs virtual members of the executive without any
accountability; whether the scheme violated the principle
of Separation of powers under the Constitution; and
whether the MPLAD Scheme gave an unfair advantage
to the MPs in contesting elections by violating the E
provisions of the Constitution.
Dismissing the writ petitions and the transferred
. cases, the Court
F
HELD: 1.1. Part XII Chapter I of the Constitution
relates to Finances. Article 266 of the Constitution refers
to consolidated funds and public accounts of India and
of the States. This Article explains what all are the
components of the consolidated funds of India. Sub-
clause (3) of Art. 266 makes it clear that money from the G
consolidated fund of India can be extended only in
accordance with law and for the particular purpose as
well as in the manner as provided in the Constitution.
Under Article 275 Grants-in-Aid are provided from the
Consolidated Fund of India to the States which are in H
222 SUPREME COURT REPORTS [2010] 6 S.C.R.
A need of assistance. Article 113 make it clear that the
Union or the State is empowered to spend money from
the Consolidated Fund strictly in accordance with the
relevant provisions. [Paras 11, 13, 21] [242-B-H; 243-A,D;
252-G-H]
B
1.2. Article 107 deals with provisions as to
introduction and passing of Bills and provides that
subject to the provisions of Articles 109 and 117 with
regard to Money Bills and other Financial Bills, the Bill
C may originate in either House of the Parliament. Article 112
mandates i:hat the President shall in respect of every
financial year cause to be laid before both the Houses of
the Parliament, a statement of the estimated receipts and
expenditure of the Government of India for the year
referred to as the "Annual Financial Statement". The
D expenditures which are charged upon the Consolidated
Fund of India are set out in Article 112(3). Besides the
expenditure charged upon the Consolidated Fund of
India under Article 112(3), the demands for grants sought
by the Union Executive are also met from the
E Consolidated Fund of India. The demands for grants are
voted in Parliament as per Article 113(2). The said sub-
clause contains the plenary power of the House of the
People to assent or to refuse to assent to any demand
subject to a reduction of the amounts specified therein.
F Elaborate procedure has been provided in the "Rules of
Procedure and Conduct of Business in Lok Sabha".
Rules 206 to 217 deal with "Demands for Grants". These
Rules make it clear that the Demands for Grants are
discussed and voted upon. Motions may be moved to
G reduce any demands. These are called "Cut Motions". By
way of Cut Motions, grants may be rejected in totality or
reduced by a certain amount or reduced by a token
amount. The elaborate procedure found in these Articles
as well as the Rules of Procedure clearly shows that Lok
H Sabha controls the amount to be sanctioned out of the
BHIM SINGH v. UNION OF INDIA AND ORS. 223
demands for grants placed by the Government. Thus, the A
final authority to decide the quantum of monies to be
sanctioned is the Lok Sabha. After the grant is voted and
accepted by the Parliament in terms of Article 113(2), a
Bill is introduced. Under Article 114, a Bill has to be
introduced to provide for appropriation of payments out B
of the Consolidated Fund of India. Such Bills are called
Appropriation Bills. An Appropriation Bill is a Money Bill
in terms of Article 110(1)(d), which has to be introduced
as per Article 107 and has to be dealt with under Article
109. The procedure makes it clear that the c
recommendations of the Council of States are not binding
on the House of People. The Appropriation Bill being a
Money Bill cannot be introduced in the Council of States
while the Annual Financial Statement is to be laid before
both the Houses. A Money Bill can only be introduced in
0
the House of the People in terms of Article 110. While the
Council of States has no role to play in the matter of
sanction <;>f expenditure and demand for grants, in relation
to a MoAP'Y Bill, it can only make recommendations in
terms 6f Article 109(2). This may or may not be accepted
by the House of the People. It is true that the activity of E
spending monies on various projects has to be
separately provided by a law. However, if Union
Government intends to spend money for public purpose
and for implementing various welfare schemes, the same
are permitted by presenting an Appropriation Bill which F
is a Money Bill and by laying the same before the Houses
of Parliament and after getting the approval of the
Parliament, Lok Sabha, in particular, it becomes law and
there cannot be any impediment in implementing the
same so long as the Scheme is for the public purpose. G
[Paras 24-26] [254-C-H; 255-A-H; 256-A-G]
1.3. The law referred to in the Constitution for
sanctifying expenditure from and out of the Consolidated
Fund of India is the Appropriation Act, as prescribed in H
224 SUPREME COURT REPORTS [2010] 6 S.C.R.
A Article 114(3) which mandates that no money shall be
withdrawn from the Consolidated Fund of India except
under appropriation made by law based in accordance
with the provisions of this Article. It provides that after the
estimates of expenditure laid before House of People in
B the form of 'demands of grants' has been passed, a Bill
is to be introduced to provide for the appropriation out
of the Consolidated Fund of India of all monies required
to meet the grants made by the House of People. Upon
the demand of grant having been made under Article 113,
c Appropriation Bills were introduced and enacted in each
year to appropriate moneys for the purposes of the
MPLAD Scheme. In such circumstances, it is reasonable
to accept that appropriation of public revenue for the
purposes of the MPLAD Scheme was sanctioned by the
Parliament by Appropriation Acts. [Para 27] [256-G-H; 257-
0
A-D]
1.4. The 'law' here is the Appropriation Act, traceable
to Article 114(3) and the purpose is for the scheme and
the moneys withdrawn for outlay for the scheme from out
E of the Consolidated Fund of India in the manner as
provided in the Constitution. All the tests laid down under
the provisions of Article 266(3) were also fully satisfied
in the implementation of the MPLAD Scheme. Further
Article 283(1) provides that 'law' made by the Parliament
F shall regulate withdrawal of money from Consolidated
Fund of India. The Appropriation Act passed as per the
provisions of Article 114 is 'law' for the purpose of the
Constitution of India and the respondents are fully
justified in claiming that no separate or independent law
G is necessary since an item of expenditure forming part
of the MPLAD Scheme or the activity on which the
expenditure is incurred also, forms part and parcel of
such Appropriation Act. It is clear that no independent
enactment is required to be passed. Neither Government
H of India nor any State is taking away the rights of anyone
BHIM SINGH v. UNION OF INDIA AND ORS. 225
or going to set up any business or creating any A
monopoly for itself nor acquiring any property. It is only
implementing a Scheme for the welfare of the people with
the sanction and approval of the Parliament. For the
purpose of imposing restrictions on the rights conferred
under Article 19 or Article 300A, there may be requirement B
of an independent law but not for the purposes of
satisfying the requirement of Article 14. [Paras 28, 29]
[257-E-H; 258-F-H]
2.1. Article 282 makes it clear that Indian Constitution
is not strictly federal and is only quasi-federal. Article 282 C
allows the Union to make grants on subjects irrespective
of whether they lie in the 7th Schedule, provided it is in
public interest. Every Article of the Constitution should
be given not only the widest possible interpretation, but
also a flexible interpretation to meet all possible D
contingencies which may arise even in the future. Article
282 is not an insertion by the Parliament at a later date.
The said Article was in the Constitution right from the
inception and was invoked for implementation of several
welfare measures by Central grants. Though welfare E
, schemes may essentially fall within the legislative
· competence of the State, the said schemes are
implemented through grants out of the Consolidated
Fund of India by resorting to Article 282. [Paras 33, 37,
38] (262-8; 264-C-E; 265-8-C] F
Rai Sahib Ram Jawaya Kapur v. The State of Punjab
(1955) 2 SCR 225; Ku/dip Nayar & Ors. v. Union of India &
Ors. (2006) 7 SCC 1; State of Karnataka v. Union of India and
Anr (1977) 4 SCC 608; S. R. Bommai a(ld Ors. v. Union of G
India and Ors. (1994) 3 sec 1; State of West'Bengat v. Union
of India (1964) 1 SCR 371; State of Rajasthan ' and Ors. v.
Union of India (1978) 1 SCR 1; ITC Ltd. v. Agricu[tural
Produce Market Committee (2002) 1 SCR 441; State of West
Bengal v. Kesoram Industries Ltd. (2004) 266 ITR 721(SC); H
M. Nagaraj v. Union of India (2006) 8 SCC 212, relied on.
226 SUPREME COURT REPORTS [2010) 6 S.C.R.
A 2.2. The expression "public purpose" under Article
282 should be widely construed and from the point of
view of the scheme, it is clear that the same was
designed to promote the purpose underlying the
Directive Principles of State Policy as enshrined in Part
s IV of the Constitution of India. The implementation of the
Directive Principles is a general responsibility of the
Union and the States. The analysis of Article 282 coupled
with other provisions of the Constitution makes it clear
that no restriction can be placed on the scope and width
c of the Article by reference to other Articles or provisions
in the Constitution as the said Article is not subject to
any other Article in the Constitution. Further this Article
empowers Union and the States to exercise their
spending power to matters not limited to the legislative
powers conferred upon them and in the matter of
0
expenditure for a public purpose subject to fulfillment of
such other provisions as may be applicable to the
Constitution their powers are not restricted or
circumscribed. Article 282 can be the source of power for
E emergent transfer of funds, like the MPLAD Scheme.
Even otherwise, the MPLAD Scheme is voted upon and
sanctioned by the Parliament every year as a Scheme for
community development. The Scheme of the Constitution
of India is that the power of the Union or State Legislature
is not limited to the legislative powers to incur
F expenditure only in respect of powers conferred upon it
under the Seventh Schedule, but it can incur expenditure
on any purpose not included within its legislative powers.
However, the said purpose must be 'public purpose'.
Judicial interference is permissible when the action of the
G government is unconstitutional and not when such action •
is not wise or that the extent of expenditure is not for the
good of the State. All such questions must be debated
and decided in the legislature and not in court. [Paras 39-
42] [265-C-D; 266-F-H; 267-G-H; 268-A-B]
H
SHIM SINGH v. UNION OF INDIA AND ORS. 227
3.1. The perusal of the guidelines of MPLAD Scheme A
makes it clear that there has been a close coordination
between the authorities, namely, the Central Government,
State Government and the District Authorities. Every
Member of Parliament (Lok Sabha) is authorized to only
recommend such works which would be of general B
public utility in his own constituency that too for a public
purpose. The Member of Rajya Sabha is to select work
as per the scheme in his State. The role of the Member
of Parliament is very limited to the initial choice of a
selection of projects subject to the choice of project c
being found eligible by the District Authority/
Commissioner or Municipal Authority, if found otherwise
feasible. [Para 45] [273-D-E]
3.2. There are three levels of accountability which
emerge from a study of the working of the Scheme, (1) D
the accountability within the Parliament, (2) the
Guidelines, and (3) the steps taken which are recorded
in the Annual Reports. The Lok Sabha has set-up an Ad-
hoc Committee to analyse the actual benefits of the
scheme realized, the deficiencies and pitfalls E
encountered in the implementation of the scheme and the
corrective measures which could be taken for the smooth
implementation of the scheme on the basis of past
experience of over a decade. [Paras 46, 47] [273-F-H; 274-
~ ~ F
3.3. In order to bring financial discipline at the district
level and reduce the accumulation of unspent funds with
the Districts, a new condition of unspent balance for the
MP being less than rupees one crore was imposed during G
the financial year (2004-05). The release procedure was
further streamlined and strengthened by prescribing for
the original (not photo-copy) of the Monthly Progress
Report, duly signed by DC/DM under his seal. This
resulted in bringing down the unspent balance. To H
228 SUPREME COURT REPORTS [2010] 6 S.C.R.
A reduce the accumulated funds further and to improve
accountability, some more conditions were laid down for
release of MPLADS funds in a new MPLADS funds
release and management procedure which was adopted
with effect from 1st June 2005. The District Authorities are
B required to submit Utilization Certificates and Audit
Certificates also for the earlier releases in addition to
fulfilling the said two conditions before second
installment in any given year is considered for release to
any MP. [Para 49) [274-G-H; 275-A-B]
c 3.4. Software was developed and launched on 30th
November 2004 by the Ministry of Statistics and
Programme Implementation. The same was adopted by
majority of the districts and the reports of completed and
ongoing projects in respect of 361 districts out of 428
D Nodal districts have already come on the website of the
Ministry. The Ministry nominated 78 officers of JAG and
SAG level working in the Ministry, as Nodal Officers for
the districts for entering the data in respect of the ongoing
and completed works. This facilitated substantial
E improvement in the data entry in the software. So far, data
in respect of 1,006 MPs has been uploaded. Result
oriented reviews of the Scheme were taken up by:'the
Secretary and Additional Secretary of the Ministry at All-
India level. Beside this, the nodal District Authority has
F to coordinate with other districts falling in the same
constituency (in case of Lok Sabha constituencies) and
with all the districts in which the MP has recommended
work (in case of Rajya Sabha MPs). Thus the nature of
the Scheme is such that it requires considerable technical,
G administrative and accounting expertise, highly efficient
coordination with various agencies and organizations
and a high degree of logistic and managerial support for
its successful implementation. Barring few irregularities,
which are taken care of by the State Audit Authorities, the
H funds allocated under the MPLAD Scheme are being .
BHIM SINGH v. UNION OF INDIA AND ORS. 229
properly monitored for better utilization to achieve the A
objectives of the Scheme. [Paras 50, 51) [275-C-H; 276-
A-C]
3.5. The information furnished shows that the
Scheme has benefited the local community by meeting 8
their various developmental needs such as drinking water
facility, education, electricity, health and family welfare,
irrigation, non-conventional energy, community centres,
public libraries, bus stands, roads, pathways, bridges,
sports infrastructure etc. Mere allegation of misuse of the C
funds under the Scheme by some MPs by itself may not
be a ground for scrapping of the Scheme as checks and
safeguards have been provided. Parliament has the
power to enquire and take appropriate action against the
erring members. Both Lok Sabha and Rajya Sabha have
· set up Standing Committee to monitor the works under 0
the Scheme. The second level of accountability is
provided by the Guidelines themselves. These guidelines
have been continuously revised, the latest being the
fourth time resulting in the Guidelines of 2005. The
Guidelines make it clear that the MPLAD Scheme is for E
the recommendation of works of developmental nature,
especially for the creation of durable community assets
based on local needs. According to the Guidelines, these
include durable assets of national priorities like drinking
water, primary education, public health, sanitation and F
roads. Clearly, the Scheme does not give a carte blanche
to the MPs with respect to the kind of works they can
recommend. Furthermore, under the Guidelines, once the
MP recommends any work, District Authority in whose
jurisdiction, the proposed works are to be executed, will G
maintain proper accounts, follow proper procedure for
sanction and implementation for timely completion of
works. [Paras 52, 53, 54) [276-D-H; 277-A-B]
3.6. The Annual Reports of the Scheme provide for H
230 SUPREME COURT REPORTS [2010] 6 S.C.R.
A transparency and accountability in the working of the
Scheme. As per the Right to Information Act, 2005 and the
rules framed there under, all citizens have the right to
information on any aspect of the MPLAD Scheme
including works recommended/sanctioned/executed
B under it, costs of work sanctioned, implementing
agencies, quality of works completed, user agencies etc.;
it has been stipulated under the guidelines that for
greater public awareness, for all works executed under
MPLAD Scheme, a plaque (stone/metal) indicating the
c cost involved, the commencement, completion and
inauguration date and the name of the MP sponsoring
the project should be permanently erected. All these
information which are available through their website
clearly show that the Scheme provides various levels of
accountability. The argument of the petitioners that
0
MPLADS is inherently arbitrary is unfounded. No doubt
there may be improvements to be made. But this court
does not sit in judgment of the veracity of a scheme, but
only its legality. When there is evidence that an
E accountability mechanism is available, there is no reason
to interfere in the Scheme. 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 fland, it only
F 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. [Paras
G 55-57] [278-E-H; 279-A-E]
4.1. Separation of Powers is an essential feature of
the Constitution. In modern governance, a strict
separation is neither possible, nor desirable.
H Nevertheless, till this principle of accountability is
SHIM SINGH v. UNION OF INDIAAND ORS. 231
preserved, there is no violation of separation of powers. A
The Constitution does not prohibit overlap of functions,
but in fact provides for some overlap as a Parliamentary
democracy. But what it prohibits is such exercise of
function of the other branch which results in wrestling .
away of the regime of constitutional accountability. A law B
would be violative of separation of powers not if it results
in some overlap of functions of different branches of the
State, but if it takes over an essential function of the other
branch leading to lapse in constitutional accountability.
[Para 59, 68] [280-C-E; 285-D] C
1
Rai Sahib Ram Jawaya Kapur and Ors. v. The State of
Punjab, AIR 1955 SC 549; Kesavananda Bharati v. State of
Kera/a & Another (1973) 4 SCC 225; Indira Gandhi v. Raj
Narain AIR 1977 SC 69; Special Reference No. 1 of
1964 (1965) 1 SCR 413; Indira Nehru Gandhi v. Raj Narain D
(1975) Supp SCC 1; State of Rajasthan v. Union of India
(1978) 1 SCR 1; Minerva Mills Ltd. and Ors. v. Union of India
(UO!) and Ors. ( 1980 ) 3 SCC 625; A.K. Roy v. Union of
India AIR 1982 SC 710, relied on.
E
4.2. There is no violation of concept of separation of
powers. The Member of Parliament is ultimately
responsible to Parliament for his action as an MP even
under the Scheme. All Members of Parliament be it a
Member of Lok Sabha or Rajya Sabha or a nominated F
Member of Parliament are only seeking to advance public
interest and public purpose and it is quite logical for the
Member of Parliament to carry out developmental
activities to the constituencies they represent. Major role
is played by Panchayats, Municipalities and Corporations G
under MPLAD Scheme in execution. and implementation
of works. The Scheme concentrates on community
development and creation of assets at the grass-root
level and in such circumstances, the same cannot be
Interfered with by the courts without reasonable grounds. H
232 SUPREME COURT REPORTS [2010] 6 S.C.R.
A The role of an MP in MPLAD Scheme is merely
recommendatory in nature and the entire execution has
been entrusted to the District/Municipal Authority which
belongs to the executive organ. It is their responsibility
to furnish completion certificate, audit certificate and
B utilization certificate for each work and if this is not done
further funds can not be released. The extracts of the
Guidelines 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
c should be executed, the Panchayati Raj Institutions (PRls)
would be the preferred lmpl~menting 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
D Exe<;utive Officers of Municipal Corporations,
Municipalities. [Paras 69, 70, 72) [285-E-G; 286-D-F; 287-
E-G]
5. MPLADS makes funds available to sitting MPs for
developmental work. If the MP utilizes the funds properly,
E it would result in his better performance. If that leads to
people voting for the incumbent candidate, it certainly
does not violate any 'principle of free and fair elections.
MPs are permitted to recommend specific kinds of works
for the welfare of the people, i.e. which relate to
F development and building of durable community assets.
These works are to be conducted after approval of
relevant authorities. In such circumstances, it cannot be
claimed that these works amount to an unfair advantage
or corrupt practices within the meaning of the
G Representation of the Peoples Act, 1951. Of course such
spending is subject to the above Act and the regulations
of the Election Commission. [Paras 74, 75] [288-B·E]
Case Law Reference:
H (1955) 2 SCR 225 relied on Para 28
BHIM SINGH v. UNION OF INDIAAND ORS. 233
(2006) 1 sec 1 relied on Para 33 A
(1977) 4 sec 608 relied on Para 34
(1994) 3 sec 1 relied on Para 35
(1964) 1 SCR 371 relied on Para 36 B
(1978) 1 SCR 1 relied on Para 36
(2002) 1 SCR 441 relied on Para 36
(2004) 266 ITR 721 (SC) relied on Para 36
c
AIR 1955 SC 549 relied on Para 60
(1973) 4 sec 225 relied on Para 61
(1965) 1 SCR 413 relied on Para 62
(1975) Supp sec 1 relied on Para 63 D
(1978) 1 SCR 1 relied on Para 65
(1980 ) 3 sec 625 relied on Para 66
AIR 1982 SC 710 relied on Para 67 E
CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil) No.
21 of 1999.
Under Article 32 of the Constitution of India.
F
WITH
W.P. (C) No. 404 of 1999
T.C. (C) No. 22 of 2005, 105, 23, 24, 36, 37 & 38 of 2000
G
W.P.(C) No. 376 of 2003 & T.P. (C) No. 450 of 2004.
G.E. Vahanvati, Sol. Genl. of India, Mohan Parasaran,
ASG, k.K. Venugopal, Chinmoy Pradip Sharma, Sparsh
Bhargava, Rohit Sharma, Uttara Babbar, Dinesh Kumar Garg, H
234 SUPREME COURT REPORTS [2010) 6 S.C.R.
A Shim Singh (Petitioner-in-Person), Pramod Dayal, Prashant
Bhushan, Rohit Kr. Singh, Mayank Mishra, Sumeet Sharma,
Somesh Rattan, Ms. Aparna Bhat, D.L. Chidananda, Gaurav
Dhingra, T.A.Khan, Sudharshan Singh Rawat, D.S. Mahra, P.
Parmeswaran, B.V. Balaram Das, Anil Katiyar, Gaurav
B Aggarwal; Ashok K. Srivastava, Vikas Sharma (for Sushma
Suri), Meenakshi Arora (NP), Ashish Wad Satya Vkrim,
Jayashree Wad, Chirag S.Dave (for J.S. Wad & Co.), for the
appearing parties.
The Judgment of the Court was delivered by
c
P. SATHASIVAM, J. 1. The petitioners have filed the
above writ petitions challenging the Members of Parliament
.Local Area Development Scheme (hereinafter referred to as
the "MPLAD Scheme") as ultra vires of the Constitution of India.
D They also prayed for direction from this Court for scrapping of
the MPLAD Scheme and for impartial investigation for the
misuse of the funds allocated in the Scheme.
2. Though the challenge in the writ petitions and the
E transferred cases is to the .constitutional validity of the MP LAD
Scheme, in view of substantial question of interpretation of
Articles 275 and 282 of the Constitution of India are involved,
particularly, transfer of funds from the Union Government to the
Members of Parliament, by reference dated 12th July, 2006 a
three-Judge Bench headed by Hon'ble the Chief Justice of
F India referred the same to a Constitution Bench. In this way, the
above matters are heard by this Constitution Be1ch.
3. Brief facts:
G On 23.i2.1993, the then Prime Minister announced the
MPLAD Scheme. This scheme was formulated for enabling the•
Members of Parliament to identify small works of capital nature
based on l9cally felt rieeds in their constituencies. The
objective, as seen from the guidelines of the Scheme, is to
H enaEle the Members of Parliament to recommel)d works of
. BHIM SINGH v. UNION OF INDIAAND ORS: . 235
[P. SATHASIVAM, J.]
developmental nature with emphasis on the creation of durable A
community assets based on.the locally felt needs to be taken
up in their Constituencies. The guidelines prescribe that right
from inception of the Scheme, durable assets of national
priorities viz., drinking water, primary education, public health,
sanitation and roads etc. are being created. In 1993-94, when · B
the Scheme was launched, an amount of Rs.5 lakh per
Member of Parliament was allotted which became rupees one
crore per annum from 1994-95 per MP Con~tituency. This was
stepped up to rupees two crores from 1998~99. Initially the
Scheme VJas under the control of the Ministry of Rural c
· Development and Planning and thereafter in October, 1994, it
was transferred to the Ministry of Statistics & Programme
Implementation. The Scheme is governed by a set of guidelines
which were first issued by the Ministry of Rural Development
in February, 1994. After the Scheme was transferred to the
0
Ministry of Statisijcs and Programme Implementation, revised
guidelines were issued in December, 1994, February, 1997,
September, 1999, April, 2002 and November, 2005.
4. After taking us through the various constitutional
provisions, the MPLAD Scheme and its guidelines, Mr. K.K. E
Venugopal, learned senior counsel, appearing for.the petitioner
in Writ Petition (C) No. 21 /.1999 made the following
submissions: ·
(i) No money should be spent from the Consolidated F
Fund of Union other than one provided under the
Constitution of India.
(ii) Instead of decision taken by Union of India under
Article 282 of the Constitution about "public
purpose", it has given power to a Member of G
Parliament, which violates Article 282 of the
Constitution of India.
(iii) MPLAD Scheme is Q total abdication of powers ·
and functions by the Union of India. Such· a H
236 SUPREME COURT REPORTS (201 O] 6 S.C.R.
A wholesale transfer of funds for the benefit of works
or projects cannot be executed under Article 275
as "grants-in-aid of the revenues of a State", without
proper recommendation of the Finance
Commission.
B
(iv) The executive powers of the Union under Article 73
are co-extensive with the legislative powers of the
Parliament, hence even executive powers of the
Union cannot be exercised contrary to the entries
in the List in Schedule VII of the Constitution so as
c to encroach on a subject falling in List II.
(v) The MPLAD Scheme is contrary to the 73rd and
74th Amendments to the Constitution of India. After
the 73rd and 74th A111endments, the entire area of
D local self-government has been entrusted to
Panchayats under Article 243G and to the
Municipalities under Articles 243W, 243ZD and
243ZE read with Schedule-XII of the Constitution.
By virtue of the said Amendments, the decision
E making power in regard to development rests with
Panchayats and Municipalities, however, due to the
presEfnt Scheme, the works are being given to
individual MPs.
(vi) The MPLAD Scheme is inconsistent with Part IX
F and Part IX-A insofar as decision making process
and inconsistent with the local self-government. The
choices and functions of the Panchayats and
Municipalities being .denuded by the MPLAD
Scheme, the Scheme is rendered wholly
G unconstitutional and bad.
5. Mr. Prashant Bhushan, learned counsel appearing for
the petitioners in Writ Petition (C) No. 376 of 2003, in addition
to the above submissions, highlighted the following points:
H
SHIM SINGH v. UNION OF INDIA AND ORS. 237
[P. SATHASIVAM, J.]
(i) Article 280 mandates the s~tting up of the Finance A
Commission, which would be constituted every five
years. This Article enumerates the financial power
of the Centre and the States to collect, levy
appropriate taxes and even the executive powers
are clearly spelt out in Article 73. As per Articles B
280 and 275, it is the Finance Commission which
is an independent body has the mandate to
recommend the division of taxes between the
Centre and the States as well as the assignment
of grants-in-aid to the revenues of States. Though c
language of Article 282 appears to be wide enough
to cover all grants, it obviously cannot be construed
to mean that the Centre can give grants to States
on a regular basis. The regular grants from the
Centre to the States can be given only under Article
D
275 and that too in accordance with the Finance
Commission's recomm3ndations.
(ii) Article 282 is not intended to be used as a second
channel of transfers from Centre to States. This
Article only allows money to be defrayed by the E
Central Government for a particular public purpose
though they may fall under State subjects.
(iii) Articles 112 to 114 have conferred power on the
Union Government to appropriate funds for its own F
expenditure; however, a part of the same cannot be
used for giving discretionary grants to the State.
(iv) The Centre by enlarging the scope of Article 282
has infringed the specific scheme designed by the
Constitution regarding the flow of finances from the G
Centre to the States. Further, most of the centrally
sponsored schemes running in different States are
being funded through Article 282 only, which is clear
misuse of the provisions of the Constitution.
H
238 SUPREME COURT REPORTS [2010] 6 S.C.R.
A 6. In reply to the above submissions, Mr. Mohan
Parasaran, learned Additional Solicitor General, appearing for
the Union of India made the following submissions:
(i) The MPLAD Scheme is intra vires of the
Constitution. The source of its power is traceable
B
to Article 114(3) read with Articles 266(3) and 282
of the Constitution of India.
(ii) Article 282 has to be given its widest amplitude and
should be interpreted widely so that the public
c purpose enshrined therein can effectively be
achieved both by the Union and the States to
advance Directive Principles of State policy.
(iii) The Scheme is being implemented based on the
D sanction which it receives from the Parliament on
the passing of the Appropriation Act during every
financial year. Appropriation for the Scheme is
done after resort to the special procedure as
applicable to Money Bills, as prescribed under
Article 109. Articles 112(2) and 113(2) mandate
E
that the expenditure proposed to be made from the
Consolidated Fund of India are bound to be laid
before both the Houses of Parliament in the form
•· of "Demand for Grants" and is subject to the assent
of the House of People.
F
(iv) The "Law" mentioned in Article 266(3) is the
Appropriation Act traceable to Article 114(3). The
MPLAD Scheme as a whole is based upon a
policy decision and having a Parliamentary
G sanction in its implementation in the form of
Appropriation Acts, no further enactment is
required.
(v) From the date of inception of Constitution i.e. from
1950, by virtue of Article 282, the Union of India
H
through Planning Commission implemented
BHIM SINGH v. UNION OF INDIA AND ORS. 239
·. [P. SATHASIVAM, J.]
'several welfare measures though most of the A
subjects would fall within the State subjects. (List II
of the VII Schedule).
(vi) Use of expressidn "Grants" in Article 282 will have
to be construed in a wider sense and it is not
8
subject to any Article especially Article 275.
(vii) The Scheme is not inconsistent with the various
other Schemes of Panchayats and Municipalities.
On the other hand, it only supplem~nts the welfare
measures taken by them.There i.s no violation of C
concept of separation of powers.
7. Mr. G.E. Vahanvati assisted this Court as amicus
curiae and submitted the following points:"
(i) The Parliament has plenary power to sanction D
expenditure. Besides the expenditure charged
upon the Consolidated Fund of India under Article
112(3), Demand for Grants sought by the Union
executive are also met from the Consolidated Fund
of India. The Demands for Grants are voted in E
Parliament as per Article 113(2). The final authority
to decide the quantum of monies to be sanctioned
is the Lok Sabha. Lok Sabha has the final control
. over expenditure.
F
(ii) The Parliament has sanctioned monies to be paid
out by the MPLAD Scheme by voting on the
demand for grant forwarded by the Union Executive
from the Ministry of Statistics and Programme
Implementation. This has been done after G
appropriate voting on the Demand for Grant and
passing of Appropriation Act which is a law within
the meaning of Article 266(3).
(iii) Article 282 acts as an enabling provision to allow
the Union or the State to make any grant by H
240 SUPREME COURT REPORTS [2010] 6 S.C.R.
A conferring the widest possible power. The only
requirement to be satisfied is that the purpose for
which such a grant is made is a 'public purpose'.
(iv) The role of MP in the MPLAD Scheme is purely
recommendatory in nature and the entire function
B
has been entrusted to the District Authority which
belongs to the executive organ. The District
Authority has to furnish completion certificate, audit
certificate and utilization certificate for each work.
If this is not done, further funds are not released.
c The Scheme makes it clear that the District
Authority plays the key role whereas the Members
of Parliament function is merely to recommend the
work.
D 8. On the contentions urged, the following questions
arise for our consideration:-
1. Whether the scheme is not valid as a grant under
Article 282 of the Constitution of India? Whether
Article 275 is the only source for a regular and
E
permanent scheme and whether Article 282 is
intended to apply only in regard to special,
temporary or ad-hoc schemes?
2. Whether having regard to Article 266(3) of the
F Constitution, apart from an appropriation by an
Appropriation Act, an independent substantive
enactment is required for the MPLAD Scheme
instead of mere executive guidelines?
3. Whether the MPLAD Scheme falls under clauses
G
(b), (bb) and (c) of Article 280 (3) of the Constitution,
and exercise of such powers of the Finance
Commission by Planning Commission make the
Scheme unconstitutional?
H 4. Whether the Scheme obliterates the demarcation
BHIM SINGH v. UNION or
INDIAAND ORS. 241
[P. SATHASIVAM, J.]
between the legislature and the executive by A
making MPs virtual members of the executive
without any accountability?
5. Whether the MPLAD scheme is inconsistent with
Part IX and Part IX-A of the Constitution by 8
encroaching upon the powers and functions of
elected bodies?
6. Whether the MPLAD Scheme, even if it is
otherwise constitutional is liable to be quashed for
want of adequate safeguards, checks and C
balances?
7. Whether the MPLAD Scheme gives an unfair
advantage to the MPs in contesting elections by
violating the provisions of the Constitution? o
9. Thus, first we must determine the constitutional scheme
regarding allocation of funds and what is the appropriate mode
of such allocation, i.e. whether a sp~cial enactment is required
for such allocation. Then, we must determine if the Parliament
is empowered under Article 282 of the Constitution to make E
allocation under the MPLAD Scheme. Subsequently, we need
to see whether a robust accountability mechanism is provided
under the Scheme. And finally whether this Scheme violates the
ccnstitutional principle of separation of powers. Let us consider
the contentions raised by both sides with reference to the F
constitutional provisions as well as salient features and the
guidelines issued then and there for implementation of the
MPLAD Scheme.
Constitutional Scheme and Whether a Special Enactment G
is needed in order to allocate funds under the
Constitution
10. The main issue relates to whether the funds ear-
markea and being spent from the Consolidated Fund of Union
H
242 SUPREME COURT REPORTS [2010) 6 S.C.R.
A for implementation of the MP LAD Scheme is in accordance with
the constitutional provisions.
11. Part XII Chapter I of the Constitution relates to
Finances. Article 266 of the Constitution refers to consolidated
funds and public accounts of India and of the States. This Article
8
explains what all are the components of the consolidated funds
of India. Article 266 reads as under:
"266. Consolidated Funds and public accounts of India
and of the States - (1) Subject to the provisions of article
c 267 and to the provisions of this Chapter with respect to
the assignment of the whole or part of the net proceeds of
certain taxes and duties to States, all revenues received
by the Government of India, all loans raised by that
Government by the issue of treasury bills, loans or ways
D and means advances and all moneys received by that
Government in repayment of loans shall form one
consolidated fund to be entitled "the Consolidated Fund
of India", and all revenues received by the Government of
a State, all loans raised by that Government by the issue
E of treasury bills, loans or ways and means advances and
all moneys received by that Government in repayment of
loans shall form one consolidated fund to be entitled "the
Consolidated Fund of the State".
(2) All other public moneys received by or on behalf of the
F Goverr.ment of India or the Government of a State shall be
credited to the public account of India or the public account
of the State, as the case may be.
(3) No moneys out of the Consolidated Fund of India or
G the Cons.olidated Fund of a State shall be appropriated
except in accordance with law and for the purposes and
in the manner provided in this Constitution."
Sub-clause (3) of Art. 266 makes it clear that money from the
H consolidated fund of India can be extended only in accordance
SHIM SINGH v. UNION OF INDIA AND ORS. 243
[P. SATHASIVAM, J.]
with law and for the particular purpose as well as in the manner A
as provided in the Constitution.
12. Mr. K.K. Venugopal, learned senior counsel, appearing
for the petitioner in W.P.(C) No. 21/1999 heavily relying on sub-
clause (3) of Art. 266 contended that .in view of specific 8
embargo, in the absence of separate law, the money from the
consolidated fund could not be spent. He further pointed out that
the Union of India has not indicated a separate legislation for
implementing MPLAD Scheme. It is the claim of the learned
counsel for the petitioners that the impugned scheme and the
allocation of funds thereof is a clear violation of the specific C
arrangement devised in the Constitution regarding the transfer
of funds from the Centre to the States.
13. Under Article 275 Grants-in-Aid are provided from the
Consolidated Fund of India to the States which are in need of D
assistance. Article 275 is reproduced hereunder:
"275.Grants from the Union to certain States.- (1) Such
sums as Parliament may by law provide shall be charged
on the Consolidated Fund of India in each year as grants- E
in-aid of the revenues of such States as Parliament may
determine to be in need of assistance, and different sums
may be fixed for different States:
Provided that there shall be paid out of the Consolidated
Fund of India as grants-in-aid of the revenues of a State F
such capital and recurring sums as may be necessary to
enable that State to meet the costs of such schemes of
development as may be undertaken by the State with the
approval of the Government of India for the purpose of
promoting the welfare of the Scheduled Tribes in that State G
or raising the level of administration of the Scheduled
Areas therein to that of the administration of the rest of the
areas of that State:
Provided further that there shall be paid out of the H
244 SUPREME COURT REPORTS [2010) 6 S.C.R.
A Consolidated Fund of India as grants-in-aid of the
revenues of the State of Assam sums, capital and
recurring, equivalent to-
(a) the average excess of expenditure over t'1e revenues
during the two years immediately proceeding the
B
commencement of this Constitution in respect of the
administration of the tribal areas specified in Part I of the
table appended to paragraph 20 of the Sixth Schedule;
and
c (b) the costs of such schemes of development as may be
undertaken by that State with the approval of the
Government of India for the purpose of raising the level of
administration of the said areas to that of the
administration of the rest of the areas of that State.
D
(1-A) On and from the formation of the autonomous State
under Article 244A,-
(i) any sums payable under clause (a) of the second
proviso to clause (1) shall, if the autonomous State
E comprises of all the tribal areas referred to therein, be
paid to the autonomous State, and, if the autonomous
State comprises only some of those tribal areas, be
apportioned between the State of Assam and the
autonomous State as the President may, by order, specify;
F
(ii) there shall be paid out of the Consolidated Fund of India
as grants-in-aid of the revenues of the autonomous State
sums, capital and recurring, equivalent to the costs of such
schemes of development as may be undertaken by the
G autonomous State with the approval of the Government of
India for the purpose of raising the level of administration
of that State to that of the administration of the rest of the
State of Assam.
(2) Until provision is made by Parliament under clause (1),
H
SHIM SINGH v. UNION OF INDIA AND ORS. 245
[P. SATHASIVAM, J.]
the powers conferred on Parliament under that clause shall A
be exercisable by the President by order and any order
made by the President under this clause shall have effect
subject to any provision so made by Parliament:
Provided that after a Finance Commission has been 8
constituted no order shall be made under this clause by
the President except after considering the
recommendations of the Finance Commission."
14. Article 280 mandates the setting up of the Finance
Commission which would be reconstituted every five years or C
at such earlier time as the President considers necessary. The
Finance Commission, which is an independent body, would be
duty bound to ascertain the percentage of taxes to be devolved
to the States which are collected by the Union under Article 270
as amount of grants-in-aid to be given to the States under D
Article 275. It was also highlighted by the learned senior counsel
for the petitioners that after the 73rd and 74th Amendments,
which introduced the Panchayati Raj Systems and
Municipalities in the country, the Finance Commission is also
mandated to take into account the resources needed by the E
States to augment the· Consolidated Fund of a State to
supplement the resources o.f the Panchayats and Municipalities
in the State. These have to be done while taking into account
the recommendations of the State Finance Commission.
' Article 280 of the Constitution reads as under: f
"280.Finance Commission.- (1) The President shall,
within two years from the commencement of this
Constitution and thereafter at the expiration of every fifth
year or at such earlier time as the President considers
necessary, by order constitute a Finance Commission G
which shall consist of a Chairman and four other members
to be appointed by the President.
(2) Parliament may by law determine the qualifications
which shall be requisite for appointment as members ·of H
246 SUPREME COURT REPORTS [2010] 6 S.C.R.
A the commission and the manner in which they shall be
selected.
(3) It shall be the duty of the Commission to make
recommendations to the President as to-
B (a) the distribution between the Union and the States of
the net proceeds of taxes which are to be, or may be,
divided between them under this Chapter and the
allocation between the States of the respective shares of
such proceeds;
c
. (b) the principles which should govern the grants-in-aid of
the revenues of the States out of the Consolidated Fund
of India;
(bb) the measures needed to augment the Consolidated
D
Fund of a State to supplement the resources of the
Panchayats in the State on the basis of the
recommendations made by the Finance Commission of
the State;
E (c) the measures needed to augment the Consolidated
Fund of a State to supplement the resources of the
Municipalities in the State on the basis of the
recommendations made by the Finance Commission of
the State;
F
(d) any other matter referred to the Commission by the
President in the interests of sound finance.
(4) The Commission shall determine their procedure and
shall have such powers in the performance of their
G functions as Parliament may by law confer on them."
15. It is submitted that these are the main finan'cial
provisions of the Constitution that determine how the taxes
would be levied, collected, appropriated and distributed
H between the Centre and the States. It is also pointed out that
BHIM SINGH v. UNION OF INDIAAND ORS. 247
[P. SATHASIVAM, J.]
not only the financial powers of the Centre and the States to A
collect, levy, appropriate taxes clearly defined in the Constitution
but even the executive powers are clearly spelt out in Article
73 which reads as under:
"Article 73 Extent of executive power of the Union 8
(1) Subject to the provisions of this Constitution, the
executive power of the Union shall extend
(a) to the matters with respect to which Parliament has
power to make laws; and
c
(b) to the exercise of such rights, authority and jurisdiction
as are exercisable by the Government of India by virtue of
· any treaty or agreement:
Provided that the executive power referred to in sub-clause
(a) shall not, save as expressly provided in this Constitution D
or in any law made by Parliament, extend in any State to
matters with respect to which the Legislature of the State
has also power to make laws.
(2) Until otherwise provided by Parliament, a State and any E
officer or authority of a State may, notwithstanding anything
in this article, continue to exercise in matters with respect
to which Parliament has pqwer to make laws for thafState
such executive power or (unctions as the. $tate or officer
or authority thereof could exercise immediately before the F
commencement of this Constitution."
16. It is contended that as per Article 73 the executive
power of the Union shall extend to the matters with respect to
which the Parliament has power to make laws. Proviso to this
Article specifically bars the Central Government from exercising G
executive powers in any State to matters with respect to which
the\Legislature of the State also has power to make laws. This
means that the executive powers of the Centre are restricted
· to the subjects spelt out in the Union List. This means that the
H
248 SUPREME COURT REPORTS [2010] 6 S.C.R.
A Centre cannot spend money on the subjects mentioned in the
Concurrent and the State List unless provided for in the
Constitution or any other law made by the Parliament.
17. However, it is the case of Mr. Mohan Parasaran,
learned Additional Solicitor General, appearing for the Union
8
of India that Articles 114 (3), 266(3) and 282 of the Constjtution
enable the Union of India to ear-mark funds by way of Grant
for implementing schemes through the Member of Parliament.
Mr. C.E. Vahanvati, appearing as amicus curiae has· also
reiterated that besides the expenditure charged upon the
C Consolidated Fund of India under Article 112(3), demand for
grants sought by the Union executives are also met from the
Consolidated Fund of India. He highlighted that the demands
for grants are voted in the Parliament as per Article 113(2) and
the final authority has to decide the quantum of monies to be
D sanctioned is the Lok Sabha. Lok Sabha has the final control
over the expenditure. He further highlighted that after the grant
has been voted and accepted by the Parliament, a Bill is
introduced to provide for appropriation of payments out of the
Consolidated Fund of India. Such Bills are called Appropriation
E Bills. An Appropriation Bill is a Money Bill in terms of Article
110(1)(d) which has to be introduced as per Article 107 to be
dealt with under Article 109. Even otherwise, according to him,
House of People has plenary power to sanction payments and
expenditure from the Consolidated Fund of India. These can
F be in the form of Grants to the Union Executive by means of
Appropriation Act.
18. Article 114 refers "Appropriation Bills" which reads as
under:
G "114. Appropriation Bills.- (1) As soon as may be after
the grants under article 113 have been made by the House
of the People, there shall be introduced a Bill to provide
for the appropriation out of the Consolidated Fund of India
of all moneys required to meet-
H
SHIM SINGH v. UNION OF INDIA AND ORS. 249
(P. SATHASIVAM, J.]
(a) the grants so made by the House of the People; and A
(b) the expenditure charged on the Consolidated Fund of
India but not exceeding in any case the amount shown in
the statement previously laid before Parliament.
(2) No amendment shall be proposed to any such Bill in 8
either House of Parliament which will have the effect of
varying the amount or altering the destination of any grant
so made or of varying the amount of any expenditure
charged on the Consolidated Fund of India, and the
decision of the person presiding as to whether an C
amendment is inadmissible under this clause shall be final.
(3) Subject to the provisions of articles 115 and 116, no
money shall be withdrawn from the Consolidated Fund of
India except under appropriation made by law passed in o
accordance with the provisions of this article."
Other enabling provision is Article 266 which we have
already extracted. The next provision relied on by Mr.
Mohan Parasaran, learned Additional Solicitor, appearing
for the Union of India is Article 282 which reads as under: E
"Miscellaneous Financial Provisions
282. Expenditure defrayable by the Union or a State out
of its revenues - The Union or a State may make any F
grants for any public purpose, notwithstanding that the
purpose is not one with respect to which Parliament or the
Legislature of the State, as the case may be, may make
laws."
Article 109 refers to special procedure in respect of Money Bills G
which reads as under:
"109. Special procedure in respect of Money Bills - (1)
A Money Bill shall not be introduced in the Council of
States. H
250 SUPREME COURT REPORTS [2010J. 6 S.C.R.
A (2) After a Money Bill has been passed by the House of
the People it shall be transmitted to the Council of States
for its recommendations and the Council of States shall
within a period of fourteen days from the date of its receipt
of.the Bill return the Bill to the House of the People with its
B recommendations and the House of the People may
thereupon either accept or reject all or any of the
recommendations of the Council of States.
(3) If the House of the People accepts any of the
recommendations of the Council of States, the Money Bill
c shall be deemed to have been passed by both Houses with
the amendments recommended by the Council of States
and accepted by the House of the People.
(4) If the House of the People does not accept any of the
D recommendations of the Council of States, the Money Bill
shall be deemed to have been passed by both Houses in
the form in which it was passed by the House of the People
without any of the amendments recommended by the
Council of States.
E
(5) If a Money Bill passed by the House of the People and
transmitted to the Council of States for its
recommendations is not returned to the House of the
People within the said period of fourteen days, it shall be
deemed to have been passed by both Houses at the
F expiration of the said period in the form in which it was
passed by the House of the People."
"Money Bills" has been defined in Article 110 which reads as
follows: ·
G
"110. Definition of "Money Bi//s"(1) For the purposes of
this Chapter, a Bill shall be deemed to be a Money Bill if
it contains only provisions dealing with all or any of the
following matters, namely:-
H
BHIM SINGH v. UNION OF INDIA AND ORS. 251
[P. SATHASIVAM, J.]
(a) the imposition, abolition, remission, alteration or A
regulation of any tax;
(b) the regulation of the borrowing of money or the giving
of any guarantee by the Government of India, or the
amendment of the law with respect to any financial B
obligations undertaken or to be undertaken by the
Government of India;
(c) the custody of the Consolidated Fund or the
Contingency Fund of India, the payment of moneys into or
the withdrawal of moneys from any such Fund; c
(cf) the appropriation of moneys out of the Consolidated
Fund of India;
. (e) the declaring of any expenditure to be expenditure
D
charged on the Consolidated Fund of India or the
increasing of the amount of any such expenditure;
(f) the receipt of money on account of the Consolidated
Fund of India or the public account of India or the custody
or issue of such money or the audit of the accounts of the E
Union or of a State; or
(g) any matter incidental to any of the matters specified in
sub-clauses (a) to (f).
(2) A Bill shall not be deemed to be a Money Bill by reason F
/
only that it provides for the imposition of fines or other
pecuniary penalties, or for the demand or payment of fees
for licences or fees for services rendered, or by reason that
it provides for the imposition, abolition, remission,
alteration or regulation of any tax by any local authority or G
body for local purposes.
(3) If any question arises whether a Bill is a Money Bill or
not, the decision of the Speaker of the House of the
People thereon shall be final. H
;..
. ,..
252 SUPREME COURT REPORTS [2010] 6 S.C.R.
A (4) There shall be endorsed on every Money Bill when it
is transmitted to the Council of States under article 109,
and when it is presented to the President for assent under
article 111, the certificate of the Speaker of the House of
the People signed by him that it is a Money Bill."
B
19. Article 111 makes it clear that when a Bill is passed
by the House of Parliament, it shall be presented to the
President and the President shall give his assent to the Bill or
withholds assent therefrom.
c 20. Article 112 speaks about Annual Financial Statement
which we call as 'Budget' in common parlance. Article 113,
which is also relevant, refers procedure in Parliament with
respect to estimates which reads as under:
D "113.Procedure in Parliament with respect to estimates -
(1) So much vf the estimates as relates to expenditure
charged upon the Consolidated Fund of India shall not be
submitted to the vote of Parliament, but nothing in this
clause shall be construed as Rreventing the discussion in
either House of Parliament of any of those estimates.
E
(2) So much of the said estimates as relates to other
expenditure shall be submitted in the form of demands for
grants to the House of the People, and the House of the
People shall have power to assent, or to refuse to assent,
F to any demand, or to. assent to any demand subject to a
reduction of the amount specified therein.
(3) No demand for a grant shall be made except on the
recommendation of the President."
G 21. The above Articles make it clear that the Union or the
State is empowered to spend money from the Consolidated
Fund strictly in accordance with the relevant provisions. In other
words, if Union of India intends to spend money from the
Consolidated Fund of India, it shall be submitted in the form of
H
BHIM SINGH v. UNION OF INDIA AND ORS. 253
[P. SATHASIVAM, J.]
demands for grants and only after approval by the Parliament, A
the same are to be spent for various Schemes.
22. Framers of our Constitution had consciously created
scheme for distribution and allocation of funds for various
subjects. Article 246(1) makes it clear that Parliament has 8
exclusive power to make laws with respect to any of the matters
enumerated in List I in the Seventh Schedule (Union List). Sub-
clause (2) of the said Article gives power to Parliament to make
laws with respect to any of the matters enumerated in List Ill in
the Seventh Schedule (Concurrent List). As per sub-clause (3)
. of the said Article, subject to clauses (1) and (2), the Legislature C
··of any State has exclusive power to make laws for such State
or any part thereof with respect to any of the matters
enumerated in List II in the Seventh Schedule (State List).
23. According to Mr. K.K. Venugopal, learned senior D
counsel appearing for the petitioner, even funds can be utilized
by the Union only in respect of various items enumerated in List
I and List Ill and not in any of the items in List II. According to
him, even Appropriation Act cannot satisfy the embargo
provided in Article 246. We have already referred to Article 266 E
which speaks about Consolidated Funds and Public Accounts
of India and of the States. Sub-clause (1) of the said Article
deals with income and sub-clause (3) refers to expenditure. We
have also noted ~he assertion of the learned amicus curiae that
the Parliament has plenary powers which are enshrined in the F
Constitution of India to sanction expenditure. He asserted that
insofar as expenditure is concerned, Parliament is competent
to spend money for any welfare scheme or for public purpose
even if those schemes are referable to certain items in List II
(State List) of the Seventh Schedule. Part XII of the Constitution G
deals with Finance, Property, Contracts and Suits. Chapter I
of Part XII deals with "Finance". The first part of Chapter I deals
with "General" provisions, the second part of Chapter I deals
with "Distribution of Revenue between the Union and the States"
and the third part deals with "Miscellaneous Financial H
254 SUPREME COURT REPORTS [2010] 6 S.C.R.
A Provisions". The arguments of the learned senior counsel for
the petitioners have revolved around Article 282 and ·according
to him the scope of this Article is very limited and the same
cannot be invoked for the purposes of justifying the Scheme.
How far Article 282 protects the impugned scheme, we will
B discuss in the later part of our judgment.
24. While considering legislative procedure, we have to
see Articles 107 to 117. Article 107 deals with provisions as
to introduction and passing of Bills and provides that subject
to the provisions of Articles 109 and 117 with regard to Money
C Bills and other Financial Bills, the Bill may originate in either
House of the Parliament. Article 112 mandates that the
President shall in respect of every financial year cause to be
laid before both the Houses of the Parliament a statement of
the estimated receipts and expenditure of the Government of
D India for the year referred to as the "Annual Financial
Statement". Nowhere in the Constitution any reference is made
to the word "Budget" but uses the expression "Annual Financial
Statement". The above-mentioned Articles show that the
estimates of expenditure must separately show the sum
E required to meet the expenditure as charged upon the
Consolidated Fund of India as per Article 112(2)(a) and the
sums required to meet other expenditure proposed to be made
from the Consolidated Fund of India as per Article 112(2)(b).
The said Article further requires that the estimates of
F expenditure have to distinguish between expenditure on
revenue account and other expenditure. The expenditures which
are charged upon the Consolidated Fund of India are set out
in Article 112(3). Article 113 deals with the procedure in
Parliament with respect to the estimates. The said Article
G makes it clear that there can be no voting in relation to
expendiiure charged upon the Consolidated Fund of India.
However, such expenditure can be discussed in either House
of Parliament. It is also clear that besides the expenditure
charged upon the Consolidated Fund of India under Article
H 112(3), the demands for grants sought by the Union Executive
SHIM SINGH v. UNION OF INDIA AND ORS. 255
[P. SATHASIVAM, J.]
are also met Jrom the Consolidated Fund of India. We have A
extracted Article 113 in earlier part of the judgment. The
demands for grants are voted in Parliament as per Article
113(2). The said sub-clause contains the plenary power of the
House of the· People to assent or to refuse to assent to any
demand subject to a reduction of the amounts specified therein. B
Elaborate procedure has been provided in the "Rules of
Procedure and Conduct of Business in Lok Sabha". Rules 206
to 217 deal with "Demands for Grants". The above-mentioned
Rules make it clear that the Demands for Grants are discussed
and voted upon. Motions may be moved to reduce any c
demands. These are called "Cut Motions". By way of Cut
Motions, grants may be rejected in totality or r~duced by a ·
certain amount or reduced by a token amount. The elaborate
procedure found in the above mentioned Articles as well as the
Rules of Procedure clearly show that Lok Sabha controls the
amount to be sanctioned out of the demands for grants placed
0
by the Government. Thus, the final authority to decide the ~
quantum of monies to be sanctioned is the Lok Sabha.
25.. Various Articles and the Rules of Procedure abundantly
show that the Lok Sabha has the final control over expenditure. E
After the grant has been voted and accepted by the Parliament
in terms of Article 113(2), a Bill is introduced. Under Article 114,
a Bill has to be introduced to provide for appropriation of
payments out of the Consolidated Fund of India. Such Bills are
called Appropriation Bills. An Appropriation Bill is a Money Bill . F
in terms of Article 110(1 )(d), which has to be introduced as per
Article 107 and has to be dealt with under Article 109. The
procedure makes it clear that the recommendations of the
Council of States are not binding on the House of People. The
relevant Articles and the Rules of Procedure referred to above G
clearly show that,
(1) The Financial Statement has to be laid before both
the Houses of Parliament in terms of Article 112;
(2) The estimates in relation to expenditure and H
256 SUPREME COURT REPORTS [2010] 6 S.C.R.
A demands for grants can only be discussed by the
House of the People vide Article 113;
(3) After the grants are approved, as per Article 114,
the same are incorporated in the Appropriation Bill;
B (4) The Appropriation Bill is a Money Bill and a Money
Bill cannot be introduced in the Council of States
while the Annual Financial Statement is to be laid
before both the Houses, a Money Bill can only be
introduced in the House of the People vide Article
c 11 O;
(5) While the Council of States has no role to play in
the matter of sanction of expenditure and demand
for grants, in relation to a Money Bill, it can only
D make recommendations vide Article 109(2). This
may or may not be accepted by the House of the
People .
. 26. If we analyze the above mentioned Articles and the
Rules of Procedure, the argument that the Appropriation Act
E by itself is not sufficient to satisfy the requirements of Article
266(3) cannot be accepted. It is true that the activity of spending
monies on various projects has to be separately provided by
a law. However, if Union Government intends to spend money
for public purpose and for implementing various welfare
F schemes, the same are permitted by presenting an
Appropriation Bill which is a Money Bill and by laying the same
before the Houses of Parliament and after getting the approval
of the Parliament, Lok Sabha, in particular, it becomes law and
there cannot be any impediment in implementing the same so
G long e1s the Scheme is for the public purpose.
27. As mentioned earlier, the law referred to in the
Constitution for sanctifying expenditure from and out of the
Consolidated Fund of India is the Appropriation Act, as
H prescribed in Article 114(3) which mandates that no money shall
BHIM SINGH v. UNION OF INDIA AND ORS. 257
[P. SATHASIVAM, J.]
be withdrawn from the Consolidated Fund of India except under A
appropriation made by law based in accordance with the
provisions of this Article. It provides that after the estimates of
expenditure laid before House of People in the form of
'demands of grants' has been passed, a Bill is to be introduced
to provide for the appropriation out of the Consolidated Fund B
of India of all monies required to meet the grants made by the
House of People. In other words, withdrawal of moneys for the
scheme is done only by means of an appropriation made by
law in accordance with the provisions of Article 114. In
pursuance of the aforesaid Constitutional provisions, it is c
pointed out on the side of the Government that upon demand
of grant having been made under Article 113, AppJopriation
Bills were introduced and enacted in each year to appropriate
moneys for the purposes of the MPLAD Scheme. In such
circumstances, it is reasonable to accept that appropriation of 0
public revenue for the purposes of the MPLAD Scheme has
been sanctioned by the Parliament by Appropriation Acts.
28 . .As rightly pointed out by learned amicus curiae and
learned Additional Solicitor General, the 'law' here is the
Appropriation Act, traceable to Article 114(3) and the purpose E
is for the scheme and the moneys withdrawn for outlay for the
scheme from out of the Consolidated Fund of India in the
manner as provided in the Constitution. We are satisfied that
all the tests laid down under the provisions of Article 266(3)
have also been fully satisfied in the implementation of the F
MPLAD Scheme. Further Article 283(1) provides that 'law'
made by the Parliament shall regulate withdrawal of money
from Consolidated Fund of India. The Appropriation Act
passed as per the provisions of Article 114 is 'law' for the
purpose of the Constitution of India and the respondents are G
fully justified in claiming that no separate or independent law
is necessary since an item of expenditure forming part of the
MPLAD Scheme or the activity on which the expenditure is
incurred also, forms part and parcel of such Appropriation Act.
In other words, Appropriation Acts are for the purposes of the H
258 SUPREME COURT REPORTS [2010] 6 S.C.R.
A. Constitution of India and no further enactment is required on a
proper interpretation of the Constitution of India. It is useful to
refer the law declared by this Court in Rai Sahib Ram Jawaya
Kapur vs. The State of Punjab, (1955) 2 SCR 225 [at page
238] which is as follows:
B
"...... After the grant is sanctioned, an appropriation bill
is introduced to provide for the appropriation out of the
consolidated fund of the State of all moneys required to
meet the grants thus made by the assembly (Article 204).
As soon as the appropriation Act is passed, the
c expenditure made under the heads covered by it would be
deemed to be properly authorised by law under Article
266(3) of the Constitution .
... . .. The expression "law" here obviously includes the
D appropriation Acts. It is true that the appropriation Acts
cannot be said to give a direct legislative sanction to the
trade activities themselves. But so long as the trade
activities are carried on in pursuance of the policy which
the executive Government has formulated with the tacit
E support of the majority in the legislature, no objection on
the score of their not being sanctioned by specific
legislative provision can possibly be raised. Objections
could be raised only in regard to the expenditure of public
funds for carrying on of the trade or business and to these
F the appropriation Acts would afford a complete answer."
29. It is clear that no independent enactment is required
to be passed. As rightly pointed out, neither Government of
India nor any State is taking away the rights of anyone or going
to set up any business or creating any monopoly for itself nor
G acquiring any property. It is only implementing a Scheme for
the welfare of the people with the sanction and approval of the
Parliament. We are satisfied that for the purpose of imposing
restrictions on the rights conferred under Article 19 or Article
300A, there may be requirement of an independent law but not
H for the purposes of satisfying the requirement of Article 14. It
1
BHIM SINGH v. UNION OF INDIA AND ORS. 259
[P. SATHASIVAM, J.]
is worthwhile to reproduce the following passage from the A
above referred judgment:
"Specific legislation may indeed be necessary if the
Government require certain powers in addition to what they
possess under ordinary law in order to carry on the
8
particular trade or business. Thus when it is necessary to
encroach upon private rights in order to enable the
Government to carry on their business, a specific
legislation sanctioning such course would have to be
passed."
c
Scope of Article 282 of the Constitution
30. Let us consider Article 282 which comes under the
heading of 'Miscellaneous Financial Provisions". Heavy reliance
was placed on this provision by Mr. G.E. Vahanvati, learned 0
amicus curiae and Mr. Mohan Parasaran, learned Additional
Solicitor General. We have extracted Article 282 in the earlier
part of the judgment. According to Mr. K.K. Venugopal learned
senior counsel, appearing for the petitioner, Article 282
contemplates that the identification of a public purpose should
E
precede the making of a grant because without such exercise
being undertaken, no decision on the extent of the grant to be
made can be taken. Under the MPLAD scheme, it was
contended that the grant precedes the identification of the
particular public purpose, and this is contrary to Article 282. It
is also submitted that in the present case, the MPLAD scheme F
is a permanent Scheme for transfer of funds each year which
can be done only under Article 275 of the Constitution while
Article 282 is intended to meet an emergency or an unforeseen
situation and it does not envisage a transfer of funds without
any limit of time. ' G
31. Mr. Prashant Bhushan, learned counsel appearing for
the petitioners, submitted that a clear interpretation of the
General Financial Provisions---of the Constitution especially
Articles 280 and 275 is that the Finance Commission, an H
260 SUPREME COURT REPORTS [2010] 6 S.C.R.
A independent body, has the mandate to recommend the division
of taxes between the Centre and the States and the assignment
of Grants in Aid to the revenues of certain States. It is also
argued that though the Constitution empowers the Finance
Commission to distribute money between the Centre and the
s States, the power has been shifted to the Planning
Commission, which was set up by a resolution of the
Government of India in March 1950. According to him, the
Planning Commission has never received any parliamentary
sanction and has still become an alternative authority to make
c regular grants given to the States, at the discretion of the
Centre. It is pointed out that there is no provision in the
Constitution for a body like the Planning Commission and it may
be described as a quasi-political body, when compared to the
statutory body like the Finance Commission, which is quite
independent of the Government. It is further contended that the
0
money being given through the impugned scheme is in clear
violation of the specific scheme devised in the Constitution
regarding the transfer of funds from the Centre to the States.
Article 282, a "Miscellaneous Financial Provision" was added
to be used only as an emergency provision. It is their claim that
E although the language of Article 282 appears to be wide
enough to cover all grants, so long as they are for a public
purpose, it obviously cannot be construed to mean that the
Centre can give grants to States on a regular basis. It was
submitted that the regular grants from the Centre to the States
F can be given only under Article 275 and only in accordance with
the Finance Commission's recommendations; that the power
under Article 282 is interpreted as providing an alternative
channel of regular transfers from the Centre to the States, it
would disrupt the delicate fiscal equilibrium which the Finance
G Commission is expected to bring about through the regular
channel under Article 275; that the Constitution makers could
not have intended to bring about such a disruption; that if Article
282 was intended to be a second channel for regular transfers
from the Centre to the States then it should have found a place
H along with Articles 268 to 281 under the heading "Distribution
BHIM SINGH v. UNION OF INDIAAND ORS. 261
[P. SATHASIVAM, J.]
of Revenues between the Union and States"; that the fact that A
Article 282 is separated from those Articles and put under a
separate heading, "Miscellaneous Financial Provisions" shows
that it is not intended to be used as a second channel of
transfers from the Centre to the States. Moreover, a reference
was also made to the marginal note on Article 282 "Expenditure B
defrayable by the Union or a State out of its revenues" to argue
that it indicates that the expE\nditure to be met by the Union or
a State to meet a particular situation provided that it is for a
public purpose. It is pointed out that any expansion of the scope
of Article 282 would necessarily result in the corresponding c
abridgement of the scope of Article 275, which could not have
been intended by the Constitution makers; and Article 282
permits the Centre and the States to incur expenditure even on
subjects which are not within the legislative competence of the
Centre or the States, as the case may be.
D
32. Under Article 73, the executive power of the Union to
give grants extends to the matters with respect to which the
Parliament has the power to make laws. This is an embargo
on the Centre's power to give discretionary grants to the States
and this embargo is lifted by the non-obstante clause in Article E
282 whereby the Centre can give discretionary grants to the
States even when it has no legislative power on the subject. It
. was argued that the lifting of the embargo clearly suggests that
. the power to give grants under Article 282 is an emergency
power to be used in exceptional circumstances. In any case, F
according to the petitioners, Article 282 only allows money to
be defrayed by the Central Government for a particular public
purpose though they may fall under State subjects. It, however,
does not authorize the Central Government to exercise its
executive power on State 'subjects within the States which is G
only allowed during an emergency under Article 353 of the
Constitution. Therefore, it is contended that Article 282 can be
used to transfer money/provide grants to States for use of
particular public purposes which may be in the State list but
cannot apply to a scheme like the MPLAD Scheme in which a H
262 SUPREME COURT REPORTS [2010] 6 S.C.R.
A Member of Parliament exercises executive power within the
States on matters in the State list.
33. We have already extracted Article 282 and reading of
the same makes it clear that our Constitution is not strictly
federal and is only quasi-federal. This Court in paras 71 to 73
8
of the judgment in Ku/dip Nayar & Ors. v. Union of India & Ors.,
(2006) 7 sec 1 held as under:
"71 But then, India is not a federal State in the traditional
sense of the term. There can be no doubt as to the fact,
c and this is of utmost significance for purposes at hand, that
in the context of India, the principle of federalism is not
territory related. This is evident from the fact that India is
not a true federation formed by agreement between various
States and territorially it is open to the Central Government
D under Article 3 of the Constitution, not only to change the
boundaries, but even to extinguish a State (State of West
Bengal v. Union of India [1964] 1 SCR 371) . Further,
when it comes to exercising powers, they are weighed
heavily in favour of the center, so much so that various
E descriptions have been used to describe India such as a
pseudo-federation or quasi- federation in an amphibian
form, etc."
"72 The Constitution provides for the bicameral legislature
at the center. The House of the People is elected directly
F by the people. The Council of States is elected by the
Members of the Legislative assemblies of the States. It is
the electorate in every State who are in the best position
to decide who will represent the interests of the State,
whether as members of the lower house or the upper
G house."
"73 It is no part of Federal principle that the representatives
of the States must belong to that State. There is no such
principle discernible as an essential attribute of
H
BHIM SINGH v. UNION OF INDIA AND ORS. 263
[P. SATHASIVAM, J.]
Federalism, even in the various examples of upper A
chamber in other countries."
34. In State of Karnataka v. Union of India and Anr. (1977)
4 SCC 608, in para 220 of the judgment, Untwalia, J. (for
Singhal J., Jaswant Singh J. and himself) observed as under:
B
"Strictly speaking, our Constitution is not of a federal
character where separate, independent and sovereign
State could be said to have joined to form a nation as in
the United States of America or as may be the position in
some other countries of the world. It is because of that C
reason that sometimes it has been characterized as quasi-
federal in nature .............. "
35. In para 276 of the judgment in S. R. Bommai and Ors.
v. Union of India and Ors. (1994) 3 SCC 1, B.P. Jeevan Reddy D
J. observed:
'The fact that under the scheme of our Constitution, greater
power is conferred upon the center vis-a-vis the States
does not mean that States are mere appendages of the
center. Within the sphere allotted to them, States are E
supreme. The center cannot tamper with their powers.
More particularly, the Courts should not adopt an approach,
an interpretation, which has the effect of or tends to have
the effect of whittling down the powers reserved to the
States .... must put the Court on guard against any F
conscious whittling down of the powers of the States. Let
it be said that the federalism in the Indian Constitution is
not a matter of administrative convenience, but one of
principle the outcome of our own historical process and a
recognition of the ground realities .... enough to note that G
our Constitution has certainly a bias towards center vis-a-
vis the States (Automobile Transport (Rajasthan) Ltd. v.
State of Rajasthan [1963)1 SCR491 ). It is equally
necessary to emphasise that Courts should be careful not
H
2J4 SUPREME COURT REPORTS [2010] 6 S.C.R.
A to upset the delicately crafted constitutional scheme by a
process of interpretation."
36. This quasi-federal nature of the Constitution is also
brought out by other decisions of this court. [See State of West
Bengal v. Union of India [1964] 1 SCR 371; State of Rajasthan
8 and Ors. v. Union of India [1978] 1 SCR 1; ITC Ltd. v.
Agricultural Produce Market Committee [2002] 1 SCR 441;
State of West Bengal v. Kesoram Industries Ltd. [2004] 266
ITR 721(SC)
C 37. In this context, the scope of Article 282 requires to be .
considered. Article 282 allows the Union to make grants on
subjects irrespective of whether they lie in the 7th Schedule,
provided it is in public interest. Every Article of the Constitution
should be given not only the widest possible interpretation, but
o also a flexible interpretation to meet all possible contingencies
which may arise even in the future. No Article of the Constitution
can be given a restrictive and narrow interpretation, particularly,
when the said Article is not otherwise subject to any other Article
in the Constitution. Article 282 is not an insertion by the
E Parliament at a later date, on the other hand, the said Article
has been in the Constitution right from the inception and has
been invoked for impleme.ntation of several welfare measures
by Central grants. It is useful to refer a decision of the
Constitution Bench of this Court in M. Nagaraj vs. Union of
F India, (2006) 8 SCC 212 wherein this Court held as follows:
"19. The Constitution is not. an ephemeral legal document
embodying a set of legal rules for the passing hour. It sets
out principles for an expanding future and is intended to
endure for ages to come and consequently to be adapted
G to the various crises of human affairs. Therefore, a
purposive rather than a strict literal approach to the
interpretation should be adopted. A constitutional provision
must be construed not in a narrow and r:·Jnstricted sense
but in a wide and liberal manner so as to anticipate and
H take account of changing conditions and purposes so that
SHIM SINGH v. UNION OF INDV\ AND ORS. 265
[P. SATHASIVAM, J.]
a constitutional provision does not get fossilised but A
remains flexible enough to meet the newly emerging
problems and challenges."
38. It is not in dispute that several welfare schemes were
. ~µ,onsored and are being formulated by the Union of India in 8
implementing Directive Principles of the State Policy. Though
they may essentially fall within the legislative competence of the
State and some of the schemes are monitored by this Court,
the said schemes are implemented through grants out of the
Consolidated Fund of India by resorting to Article 282.
c
39. The expression "public purpose" under Article 282
should be widely construed and from the point of view of the
scheme, it is clear that the same has been designed to promote
the purpose underlying the .Directive Principles of State Policy
as enshrined in Part IV of the Constitution of India. It is not in D
dispute that the implementation of the Directive Principles is a
general responsibility of the Union and the States. The right to
life as enshrined in Article 21 in the context of public health are
fully within the ambit of State List Entry 6, List II of the 7th
Schedule. It is also settled by this Court that in interpreting the E
Constitution, due regard has to be given to the Directive
Principles which has been recorded as the soul of the
Constitution in the context of India being the welfare State. It is
the function of the State to secure to its citizens "social,
economic and political justice", to preserve "liberty of thought, F
expression, belief, faith and worship" and to ensure "equality
of status and of opportunity" and "the dignity of the individuals"
and the "unity of the nation". This is what the Preamble of our
Constitution says and that is what which is elaborated in the
two vital chapters of the Constitution on Fundamental Rights and G
Directive Principles of the State Policy. The executive activity
in the field of delegated or subordinate legislation has
increased. In the constituent Assembly debates, Dr. B.R.
Ambedkar has underscored that one of the objectives of the
Directive Principles of State Policy is to achieve economic H
266 SUPREME COURT REPORTS [2010] 6 S.C.R.
A democracy and left that in the hands of future elected
representatives.
40. Even under the Government of India Act, 1935, a similar
provision was contained in Section 150(2) under the heading
"Miscellaneous Financial Provisions". The Constitution makers
8
have clarified the expression 'purpose' by making it a 'public
purpose' thereby clearly circumscribing the general object for
which Article 282 may be resorted to, that is for a 'public
purpose'. It was pointed out before us that similar provisions
are also found in the Constitutions of other countries such as
C USA and Australia. Reference was made to the first clause of
Article 1(8) of the Constitution of the United States of America,
which states that "the Congress shall have the power to lay and
collect taxes, duties, imports and excise to pay the debts and
profit for the common advance and general welfare of the
D United States." It was also pointed out that a similar provision
exists in the Australian Constitution under Section 81, stating
that all revenues or moneys raised or received by the Executive
Government of the Commonwealth shall form one consolidated
Revenue Fund, to be appropriated for the purposes of the
E Commonwealth in the manner and subject to charges and
liabilities imposed by this Constitution. It was pointed out that
Section 94 of the Australian Constitution is an amalgamation
of Articles 266(3) and 282 of the Indian Constitution.
F 41. The analysis of Article 282 coupled with other
provisions of the Constitution makes it clear that no restriction
can be placed on the scope and width of the Article by reference
to other Articles or provisions in the Constitution as the said
Article is not subject to any other Article in the Constitution.
G Further this Article empowers Union and the States to exercise
their spending power to matters not limited to the legislative
powers conferred upon them and in the matter of expenditure
for a public purpose subject to fulfillment of such other provisions
as may be applicable to the Constitution their powers are not
H restricted or circumscribed. Ever since the inception of the
Constitution several welfare schemes advancing the public
BHIM SINGH v. UNION OF INDIA AND ORS~ 267
[P. SATHASIVAM, J.]
purpose/public interest by grants disbursed by the Union have A
been implemented. It is pointed out that MPLAD is one
amongst the several schemes which have been designed and
implemented under Article 282. Mr. Mohan Parasaran, learned
Additional Solicitor General pointed out that apart from the·
MPLAD scheme several other welfare schemes are being 8
implemented such as
(1) Integrated Child Development Scheme
(2) Targeted Public Distribution Scheme
c
(3) Sarva Siksha Abhiyan
(4) Mid-day Meal Scheme
(5) Antyodaya Anna Yojana
D
(6) National Old Age Pension Scheme - now known
as Indira Gandhi Old Age Pension Scheme
(7) National Immunity Scheme - now known as Janani
Suraksha Yojana
E
(8) Jawahar Rozgar Yojana
(9) National Rural Health Mission
As a matter of fact, he pointed out that some of the schemes
are also closely being· monitored by this Court by passing F
appropriate orders from .time to time.
42. The above analysis shows that Article 282 can be the
source of power for emergent transfer of funds, like the MPLAD
Scheme. Even otherwise, the MP LAD Scheme~is .voted upon G
and sanctioned by the Parliament every year a~cheme for
community development. We have already· ~that the
Scheme of the Constitution of India is that the power of the
Union or State Legislature is not limited to the legislative powers
to incur expenditure only in respect of powers conferred upon H
268 SUPREME COURT REPORTS [2010) 6 S.C.R.
A it under the Seventh Schedule, but it can incur expenditure on
any purpose not included within its legislative powers. However,
the said purpose must be 'public purpose'. Judicial interference
is permissible when the action of the government is
unconstitutional and not when such action is not wise or that
8 the extent of expenditure is not for the good of the State. We
are of the view that all such questions must be debated and
decided in the legislature and not in court.
Accountability under MPLADS
C 43. Mr. K.K. Venugopal, learned senior counsel as well as
Mr. Prashant Bhushan, learned counsel submitted that the
Scheme has been so devised that the grant is, in effect, made
to the Members of Parliament and is not made to the
beneficiary or the public purpose, which may be a Panchayat
o or a Municipality, a University, a Research Institute or the like.
44. In the light of the said contenpons relating to the
Scheme and misuse of funds and also tfle allocation relating
to inconsistency with the local governm~nt, we have carefully
gone through the guidelines of the MPLAD Scheme. As already
E mentioned, the Scheme was announced by the Prime Minister
in the Parliament on 23.12.1993. The guidelines were issued
in February, 1994 covering the concept, implementation and
monitoring of the Scheme. The guidelines were periodically
updated in December 1994, February 1997, September 1999,
F April 2002 and November 2005. It was pointed out by learned
counsel for the State that with the experience gained over a
decade and having considered the suggestions made by the
Members of Parliament in the interactive discussions taken by
the Minister of State (Independent Charge) of the Ministry of
G Statistics and Programme Implementation, MPLAD's
Committees of Parliament, Planning Commission and
Comptroller and Auditor General of India, it was felt by the
government to carry out a comprehensive revision of guidelines
which necessitated the government to frame new guidelines in
H November, 2005. Since several comments were made about
SHIM SINGH v. UNION OF INDIA AND ORS. 269
[P. SATHASIVAM, J.]
the implementation of the Scheme, let us refer only to the A
relevant guidelines of the Scheme, which are extracted below:
"1.3. The objective of the scheme is to enable MPs to
· recommend works of developmental nature with
emphasis on the creation of durable community 8
assets based on the locally felt needs to be taken
up in their Constituencies Right from inception of
the Scheme, durable assets of national priorities viz.
drinking water, primary education, public health,
sanitation and roads, etc. are being created.
c
2.2. Lok Sabha Members can recommend works for
their respective constituencies. Elected Members
of Rajya Sabha can recommend works for
implementation in one or more districts as they
may choose in the State of their election. D
Nominated Members of Lok Sabha and Rajya
Sabha can recommend works for implementation
in one or more districts anywhere in the country.
2.4. All works to meet the locally felt community E
/ infrastructure and development needs with
emphasis on the _creation of durable assets in the
respective constituency are permissible under
MPLADS exceptthose prohibited in Annexure II to
the Scheme. MPs may choose some. works for
F
creation of durable assets of national priorities
namely drinking water, education, public health,
sanitation, and roads under the Scheme.
2.6. Each MP will recommend works up to the annual
entitlement· during the financial year preferably G
within 90 days of the commencement of the
financial year in the format at Annexure Ill to the
Scheme to the concerned District Authority. The
District Authority will get the eligible sanctioned
works executed as per the established procedure H
270 SUPREME COURT REPORTS [2010] 6 S.C.R.
A laid down by the State Government for
implementation of such works subject to the
provision in these Guidelines.
2.10. District Authority: District Collector/District
Magistrate/Deputy Commissioner will generally be
8
the District Authority to implement MPLADS in the
oistrict. If the District Planning Committee is
empowered by the State Government, the Chief
Executive Officer of the District Planning
Committee can function as the District Authority. In
c case of Municipal Corporations, the
Commissioner/Chief Executive Officer may function
as the District Authority. In this regard if there is any
doubt, Government of India in consultation with the
State/UT Government, will decide the District
D Authority for the purpose of MPLADS
implementation.
2.11. Implementing Agency: The District Authority shall
'· ' identify the agency through which a particular work
E recommended by the MP should be executed. The
executing agency so identified by the District
Authority is the implementing agency. The
Panchayati Raj Institutions (PRls) will preferably be
the Implementing Agency in the rural areas and
F works implementation should tie done through
Chief Executive of the respective PRI. The
Implementing Agencies in the urban areas should
preferably be urban local bodies and works
implementation should be done through
Commissioners/Chief Executive Officers of
G
Municipal Corporations, Municipalities. Further, the
District Authority may choose either Government
Department unit or Government agency or reputed
Non-Governmental Organization (NGO) as capable
of implementing the works satisfactorily as
H
BHIM SINGH v. UNION OF INDIA AND ORS. 271
[P. SATHASIVAM, J.]
Implementing Agencies. For purposes of execution A
of works through Government Departments, District
Authority can engage units for example, Public
Health Engineering, Rural Housing, Housing
Boards, Electricity Boards, and Urban
Development Authorities etc, as Implementing B
Agencies.
3.1. Each MP shall recommend eligible works on MP's
letter head duly signed. A letter format from the MP
to the District Authority is at Annexure Ill to the C
Scheme. Recommendations by representative(s} of
MPs are not admissible.
3.3. The District Authority shall identify the Implementing ·
Agency capable of executing the eligible work
qualitatively, timely and satisfactorily. The District . D
Authority shall follow the established work scrutiny;
technical, work estimation, tendering and
administrative procedure of the State/UT
Government concerned in the matter of work
execution, and shall be responsible for timely and E
effective implementation of such works.
3.4. The work and the site selected for the work
execution by the MP shall not be changed, except
with the concurrence of the MP concerned.
F
3.5. Where the District Authority considers that a
recommended work cannot be executed due to
some reason, the District Authority shall inform the
reasons to the MP concerned, under intimation to
the Government of India and the State/UT G
Government within 45 days from the date of receipt
of the proposal.
3.14. Decision making powers in regard to technical,
financial and administrative sanctions to be
H
272 SUPREME COURT REPORTS [2010) 6 S.C.R.
A accorded under the Scheme, vest in the district level
functionaries. To facilitate quick implementation of
projects under this Scheme, vest in the district level
functionaries. To facilitate quick implementation of
projects under this Scheme, full powers should be
B delegated by the State/UT Governments to the
district functionaries. The District Authorities will
have full powers to get the works technically
approved and financial estimates prepared by the
competent district functionaries before according
c the final administrative sanction and approval. The
District Authority should, before sanctioning the
work, ensure that all clearances for such works
have been taken from the competent authorities
and the work conforms to the Guidelines.
D 4.1. The annual entitlement of rupees two crores will be
released in two equal instalments of rupees one
crore each by Government of India directly to the
District Authority (District Collector/ District
Magistrate/ Deputy Commissioner or the Chief
E Executive of the Municipal Corporation, or the Chief
Executive of the District Planning Committee as the
case may be), under intimation to the State/UT
Nodal Department and to the Member of
Parliament concerned.
F
5.4. The District Authority will submit for every year the
audited accounts, reports and certificates to the
State Government and the Ministry of Statistics and
Programme Implementation.
G 5.8. The District Authorities have been implementing
MPLADS since 1993-94. They are to submit
periodically works Completion Report, Utilization
Certificate, and Audit Certificates. These
Certificates are to be furnished to the Ministry of
H
I ,.
BHIM SINGH v. UNION OF INDIAAND ORS. 273
[P. SATHASIVAM, J.]
-
Statistics and Programme Implementation right A
from inception."
. . .
Clause 6.2 of the Guidelines enumerates the role of the Central
.Government and Clause 6.3 defines the role of the State/UT
Government. Clause 6.4 enumerates the role of the District
8
Authority and Clause 6.5 refers to the role of the Implementing
Agencies. Annexure-11 contains List of works which are
prohibited under MPLAD Scheme. Annexure~IVE enumerates
type of works in which the MPLAD Scheme .funds to' be
implemented. Annexure-IX refers about Audit Certifi,cate and C
the details to be furnished by the auditor.
45. From the perusai of the above clauses contained in
the guidelines of MPLAD Scheme, it is clear that th~re has been
a .close coordination between the authorities, namely, the
Central Government, State Gov~rnment and the District D
Authorities. It is also clear that every Member of Parliament (Lok
Sabha) Is authorized to only recommend such works which
would be of general public utility in his owi:i constituency that
too for a public purpose. The Member of·Rajya Sabha is to
select work as per the scheme in his State. The role of the E
Member of Parliament is very limited to the initial choice of a
selection of projects subject to the choice of project being found
eligible by the District Authority/Commissioner or Municioal
Authority, if found otherwise feasible.
F
46. The issue raised by the petitioners that under the guise
of the Scheme there is arbitrary and ma/afide use of powers
by MPs in allocating the work and using the funds does not hold
good in the light of the following information: There are three
levels of accountability which emerge fn:>m a study of the
working of the Scheme, (1) the accountability within the G
Parliament, (2) the Guidelines, and (3) the steps taken which
are recorded in the Annual Reports.
47. The Lok Sabha has ~'et-up an Ad-hoc Committee on
H
274 SUPREME COURT REPORTS [2010) 6 S.C.R.
A the working of MPLAD Scheme. The website of the House
states that:
"The Committee on Members of Parliament Local Area
Development Scheme (Lok Sabha), an ad hoc Committee
was constituted for the first time on 22 February, 1999 by
B
the Speaker as per provisions of Rule 254(1) of the Rules
of Procedure and Conduct of Business in Lok Sabha.
Initially the Committee consisted of 20 Members. Later, the
membership was raised to 24. The Chairman is appointed
c Committee."
..
by the Speaker from amongst the Members of the
Lok Sabha Ad-hoc Committee on MPLAD in furtherance of its
functions viz; to analyse the actual benefits of the scheme
realized, the deficiencies and pitfalls encountered in the
D implementation of this scheme and the corrective measures
which could be taken for the smooth implementation of the
scheme on the basis of past experience of over a decade
p·resented its Fifteenth Report by the Ministry of Statistics and
Programme Implementation on the subject 'MPLADS- A
E Review' in December 2008.
48. The Committee in order to answer the questions that
arose in the Era Sezhiyan Report and also the views expressed
against the MPLAD scheme by Shri J.M. Lyngdoh, former
F Chief Election Commissioner on behalf of India Rejuvenation
Initiative commented on i) uncontrolled management of the
bureaucracy, (ii) Lack of Monitoring System, and (iii)
Irregularities in Implementation.
49. In order to bring financial discipline at the district level
G and rP-duce the accumulation of unspent funds with the Districts,
a new condition of unspent balance for the MP being less than
rupees one crore was imposed during the financial year (2004-
05). The release procedure was further streamlined and
strengthened by prescribing for the original (not photo-copy) of
H the Monthly Progress Report, duly signed by DC/DM under his
BHIM SINGH v. UNION OF INDIA AND ORS. 275
[P. SATHASIVAM, J.]
seal. This resulted in bringing down the unspent balance. To A
reduce the accumulated funds further and to improve
accountability, some more conditions have been laid down for
release of MPLADS funds in a new MPLADS funds release
and management procedure which was adopted with effect
from 1st June 2005. Now the District Authorities have to submit B
Utilization Certificates and Audit Certificates also for the earlier
releases in addition to fulfilling the aforesaid two conditions
before second installment in any given year is considered for
release to any MP.
50. Software has been developed and launched on 30th C
November 2004 by the Ministry of Statistics and Programme
Implementation. l;he same had been adopted by majority of the
districts and the reports of completed and ongoing projects in
respect of 361 districts out of 428 Nodal districts have already
come on the website of the Ministry. The Ministry had D
nominated 78 officers of JAG and SAG level working in the
Ministry, as Nodal Officers for the districts for entering the data
in 'respect of the ongoing and completed works. This had
1
facilitated substantial improvement in the data entry in the
software. So far, data in respect of 1,006 MPs has been E
uploaded. Result 9riented reviews of the Scheme have been
taken up by the Secretary and Additional Secretary of the
Ministry at All-lndia level.
51. As discussed earlier, under the MPLAD SGheme, the
F
MP. concerned recommends works. The District Authority
verifies the eligibility and technical feasibi.lity of each
recommended work. Decision making power ln regard to
technical, financial, administrative sanctions accorded under the
scheme, vests in the district level functionaries. The sanctioning G
of eligible works and their execution is done by the District
Authorities and State Governments monitor the MPLAD works
implementation. Beside this, the nodal District Authority has to
coordinate with other districts falling in the same constituency
(in case of Lok Sabha constituencies) and with all the districts
H
276 SUPREME COURT REPORTS [2010] 6 S.C.R.
A in which the MP has recommended work (in case of Rajya
Sabha MPs). Thus the nature of the Scheme is such that it
requires considerable technical, administrative and accounting
expertise, highly efficient coordination with various agencies
and organizations and a high degree of logistic and managerial
8 support for its successful implementation. Only the District
Authorities possess all the above mentioned requisite
competence and can effectively implement the scheme at the
District level. Barring few irregularities, which are taken care
of by the State Audit Authorities, the funds allocated under the
C MPLAD Scheme are being properly monitored for better
.utilization to achieve the objectives of the Scheme.
52. The information furnished shows that the Scheme has
benefited the local community by meeting their various
developmental needs such as drinking water facility, education,
D electricity. health and family welfare, irrigation, non-conventional
energy, community centres, public libraries, bus stands, rbads,
pathways, bridges, sports infrastructure etp. Mere allegation of
misuse of the funds under the Scheme by some MPs by itself
may not be a ground for scrapping of the Scheme as checks
E and safeguards have been provided. Parliament has the power
to enquire and take appropriate action against the erring
members. Both Lok Sabha & Rajya Sabha have set up
Standing Committee to monitor the work's under the Scheme.
F 53. The second level of accountability is provided by the
Guidelines themselves. As noted above, these guidelines have
been continuously revised, the latest being the fourth time
resulting in the Guidelines of 2005. As we have already
adverted to, the Guidelines make it clear that the MPLAD
Scheme is for the recommendation of works of developmental
G nature, especially for the creation of durable community assets
based on local needs. According to the Guidelines, these
include durable assets of national priorities like drinking water,
primary education, public health, sanitation and roads. Clearly,
H
SHIM SINGH v. UNION OF INDIA AND ORS. . 277
[P. SATHASIVAM, J.)
the Scheme does not give a carte blanche to the MPs with A
respect to the kind of works they can recommend.
· 54. Furthermore, under the Guidelines, once-the:.cMP
.. · recommends any work, District Authority in\.Vhose jurisdiction,
the proposed works are to be executed, wlll maintain proper . 8
· accounts, follow proper procedure for sanction and
. implementation for timely completion of works. [vide Clause 3.2)
Annex II provides those works which are prohibited under the
Scheme:
c
LIST OF WORKS PROHIBl.TED UNDER MPLADS
1. OffiC:e anti ·residential buildings belonging to Central,
. ·and. State Governments, their Departments, Government
f\gencies/ Org~nizations and Public Sector Undertakings: D
.2. Office and residential ·buildings, and other works
belonging to private, cooperative and commercial
organizations.
3. All works involving commercial establishments/units. E
4. All maintenance works of any type.
5. All renovation, and repair works except heritage and
archeological monuments and buildings with specific
permission available from the Archeological Survey of F
India.
6. Grants and loans, contribution to any Central and State/
UT Relief Funds.
7. Assets to be named after any person. G
8. Purchase of all movable items except vehicles, earth
movers, and equipments meant for hospital, educational,
sports, drinking water and sanitation purposes belonging
to Central, State, UT and Local Self Governments. (This f-1
278 SUPREME COURT REPORTS [2010] 6 S.C.R.
A will be subject to 10% of the Capital Cost of the work for
which such items are proposed)
9. Acquisition of land or any compensation for land
acquired.
B 10. Reimbursement of any type of completed or partly
completed works or items.
11. Assets for individual/family benefits.
12. All revenue and recurring expenditure.
c
13. Works within the places of religious worship and on
land belonging to or owned by religious faith/group. ,
Further accounting and monitoring procedure is provided by the
o Guidelines themselves under Clause 5 a111d 6 of the Guidelines,
2005.
55. We have perused through the Annual Reports of the
Scheme which provide for transparency and accountability in
the working of the Scheme. Measures that have been
E introduced in this regard are highlighted below:
1. Software for monitoring MPLADs Works was
launched in November 2004. The software enables
online monitoring of details of works and the
F analysis of this data is used to bring out various
reports, once the data entry and uploading in
respect of a constituency is completed.
2. As per the Right to Information Act, 2005 and the
rules framed there under, all citizens have the right
G
to information on any aspect of the MPLAD
Scheme including works recommended/
sanctioned/executed under it, costs of work
sanctioned, implementing agencies, quality of
works completed, user agencies etc.
H
SHIM SINGH v. UNION OF INDIA AND ORS. 279
[P. SATHASIVAM, J.]
3. It has been stipulated under the guidelines that for A
greater public awareness, for all works executed
under MPLAD Scheme, a plaque (stone/metal)
indicating the cost involved, the commencement,
·completion and inauguration date and the name of
·the MP sponsoring the project should be B
permanently erected."
56. All these information which are available through their
website clearly show that the Scheme provides various levels
of accountability. The argument of the petitioners that MPLADS C
is inherently arbitrary seems unfounded. No doubt there may
be improvements to be made. But this court does not sit in
judgment of the veracity of a scheme, but only its legality. When · ·
there is evidence that an accountability mechanism is available,
there is no reason for us to interfere in the Scheme.
D
. 57. 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 E
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. Various guidelines make it clear that the Scheme has to
be implemented with the co-ordination of various authorities F
and subject to the supervision and control of the nodal Ministry
i.e. Ministry of Statistics and Programme Implementation. The
respondents have highlighted that the collective responsibility
ensures in implementing the Scheme and over the years,
various checks are also put in place, including the measures G
to make the scheme more transparent in all respects. We are
satisfied that the Government of India is not delegating its power
to the Members of Parliament to spend the money contrary to
the mandate of the constitutional provisions.
H
280 SUPREME COURT REPORTS [2010] 6 S.C.R.
A Separation of Powers
58. Another contention raised by the petitioners is that the
Scheme violates the principle of Separation of Powers under
the Constitution. The concept of Separation of Powers, even
though not found in any particular constitutional provision, is
8
inherent in the polity the Constitution has adopted. The aim of
Separation of Powers is to achieve the maximum extent of
accountability of each branch of the Government.
59. While understanding this concept, two aspects must
C be borne in mind. One, that Separation of Powers is an
essential feature of the Constitution. Two, that in modern
governance, a strict separation is neither possible, nor
desirable. Nevertheless, till this principle of accountability is
preserved, there is no violation of separation of powers. We
D arrive at the same conclusion when we assess the position
within the Constitutional text. The Constitution does not prohibit
overlap of functions, but in fact provides for some overlap as a
Parliamentary democracy. But what it prohibits is such exercise
of function of the other branch which results in wrestling away
E of the regime of constitutional accountability.
60. In Rai Sahib Ram Jawaya Kapur and Ors. v. The State
of Punjab, AIR 1955 SC 549, this Court held that:
"The Indian Constitution has not indeed recognised the
F doctrine of separation of powers in its absolute rigidity but
the functions of the different parts or branches of the
Government have been sufficiently differentiated and
consequently it can very well be said that our Constitution
does not contemplate assumption, by one organ or part
G of the State, of functions that essentially belong to another.
The executive indeed can exercise the powers of
departmental or subordinate legislation when such powers
are delegated to it by the legislature. It can also, when so
empowered, exercise judicial functions in a limited way.
H
BHIM SINGH v. UNION OF INDIAAND ORS. 281
[P. SATHASIVAM, J.]
The executive Government, however, can never go against A
the provisions of the Constitution or of any law."
61. In Kesavananda Bharati vs. State of Kera/a &
Another, (1973) 4 SCC 225 and later in Indira Gandhi vs. Raj
Narain, AIR 1977 SC 69, this Court declared Separation of 8
Powers to be a part of the Basic Structure of the Constitution.
In Kesavananda Bharati's case, (supra) Shelat & Grover, JJs.
in para 577 observed the precise nature of the concept as .
follows:
"There is ample evidence in the Constitution itself to C
indicate that it creates a system of checks and balances
by reason of which powers are so distributed thatrnone of
the three organs it sets up can become so pre-dominant
as to disable the others from exercising and discharging
powers and functions entrusted to them. Though the D
Constitution does not lay down the principle of separation
of powers in all ifs rigidity as is the case in the United
States Constitution but it envisages such a separation to
a degree as was found in Ranasinghe's case . The judicial
review provided expressly in our Constitution by means of E
Articles 226 and 32 is one of the features upon which
hinges the system of checks and balances."
62) The specific nature of this concept in our polity has also
been reiterated time and again.
F
In Special Reference No.1 of 1964 (1965) 1 SCR 413,
this court held: ·
" ...Whether or not there is distinct and rigid separation of
powers under the Indian Constitution, there is no doubt that G
the constitution has entrusted to the Judicature in this
country the task of construing the provisions of the
Constitution and of safeguarding the fundamental rights of
the citizens. When a statute is challenged on the ground
.that it has been passed by a Legislature without authority, H
282 SUPREME COURT REPORTS [2010] 6 S.C.R.
A or has otherwise unconstitutionally trespassed on
fundamental rights, it is for the courts to determine the
dispute and decide whether the law passed by the
legislature is valid or not. Just as the legislatures are
conferred legislative authority and there functions are
B normally confined to legislative functions, and the function
I and authority of the executive lie within the domain of
executive authority, so the jurisdiction and authority of the
Judicature in this country lie within the domain of
adjudication. If the validity of eny law is challenged before
c the courts, it is never suggested that the material qqestion
as to whether legislative authority has been exceeded or
fundamental rights have been contravened, can be
decided by the legislatures themselves. Adjudication of
such a dispute is entrusted solely and exclusively to the
Judicature of this country. (Emphasis supplied]
D
63. In Indira Nehru Gandhi v. Raj Narain (1975) Supp
SCC 1, Ray, J. noted that:
"The doctrine of separation of powers is carried into effect
E in countries like America and Australia. In our Constitution
there is separation of powers in a broad sense ... the
doctrine of separation of powers as recognized in
America is not applicable to our country."
64. The learned Chief Justice noted (in para 47) that the
F rigid separation of powers as under American Constitution or
Australian Constitution does not apply to our country. He further
noted that:
"The American Constitution provides for a rigid separation
G of governmental powers into three basic divisions the
executive, legislative and judicial. It is an essential
principle of that Constitution that powers entrusted to one
department should not be exercised by any other
department. The Australian Constitution follows the same
H pattern of distribution of powers. Unlike these
l
BHIM SINGH v. UNION OF INDIA AND ORS. 283
[P. SATHASIVAM, J.]
Constitutions, the Indian Constitution does not expressly A
vest the three kinds of power in three different organs of
the State. But the principle of separation of powers is not
a magic formula for keeping the three organs of the State
within the strict confines of their functions. As observed
by Cardozo, J., in his dissenting opinion in Panama B
Refining Company v. Ryan (1934) 293 US 388, 440 the
principle of separation of powers "is not a doctrinaire
concept to be made use of with pedantic rigour. There
must be sensible approximation, there must be elasticity
of adjustment in response to the practical necessities of c
Govt. which cannot foresee today the developments of
tomorrow in their nearly infinite variety". Thus, even in
America, despite the theory that the legislature cannot
delegate its power to the executive. a host of rules and
regulations are passed by non-legislative bodies, which
0
have been judicially recognised as valid." [Emphasis
supplied]
65. In State of Rajasthan v. Union of India (1978) 1 SCR
1, this Court observed:
E
"This Court has never abandoned its constitutional function
as the final Judge of constitutionality of all acts purported
to be done under the authority of the Constitution. It has not
refused to determine questions either of fact or of law so
long as it has found itself possessed of power to do it and F
the cause of justice to be capable of being vindicated by
its actions. But, it cannot assume unto itself powers the
Constitution lodges elsewhere or undertake tasks
entrusted by the Constitution to other departments of State
which may be better equipped to perform them. The G
scrupulously discharged duties of all guardians of the
Constitution include the duty not to transgress the
limitations of their own constitutionally circumscribed
powers by trespassing into what is properly the domain of
other constitutional organs. Questions of political wisdom H
284 SUPREME COURT REPORTS [2010] 6 S.C.R.
A or executive policy only could not be subjected to judicial
control. No doubt executive policy must also be
subordinated to constitutionally sanctioned purposes. It has
its sphere and limitations. But, so long as it operates within
that sphere, its operations are immune from judicial
B interference. This is also a part of the doctrine of a
rough separation of powers under the Supremacy of the
Constitution repeatedly propounded by this Court and to
which the Court unsweivingly adheres even when its views
differ or change on the correct interpretation of a particular
c constitutional provision."
(para. 40)
66. In Minerva Mills Ltd. and Ors. v. Union of India (UOI)
and Ors. ( 1980) 3 SCC 625 it was obseived:
D
"93. It is a fundamental principle of our constitutional
scheme, and I have pointed this out in the preceding
paragraph, that every organ of the State, every authority
under the Constitution, derives its power from the
Constitution and has to act within the limits of such
E
power .... Under our Constitution we nave no rigid
separation of powers as in the United States of America,
but there is a broad demarcation, though, having regard
to the complex nature of governmental functions, certain
degree of overlapping is inevitable. The reason for this
F broad separation of powers is that "the concentration of
powers in any one organ may" to quote the words of
Chandrachud, J. (as he then was) in Smt. Indira Gandhi's
case (supra) "by upsetting that fine balance between the
three organs, destroy the fundamental premises of a
G democratic Government to which we are pledged."
[Emphasis supplied]
67. Again, in the Constitution Bench judgment in A.K. Roy
H v. Union of India AIR 1982 SC 710, Chandrachud, C.J.
SHIM SINGH v. UNION OF INDIA AND ORS. 285
[P. SATHASIVAM, J.]
speaking for the majority held at para 23 pg. 723 that "our A
constitution does not follow the American pattern of
strict separation of powers".
68. This court has previously held that the taking away of
the judicial function through legislation would be violative of 8
separation of powers. As Chandrachud, J. noted in Indira
Nehru Gandhi case (supra), "the exercise by the legislature of
what is purely and indubitably a judicial function is impossible
to sustain in the context even of our co-
operative federalism which contains no rigid distribution of C
powers but which provides a system of salutary checks and
balances." [para. 689] This is because such legislation upsets
the balance between the various organs of the State thus
harming the system of accountability in the Constitution. Thus,
the test for the violation of separation of powers must be
precisely this. A law would be violative of separation of powers D
not if it results in some overlap of functions of different branches
of the State, but if it takes over an essential function of the other
branch leading to lapse in constitutional accountability. It is
through this test that we must analyze the present Scheme.
E
69. In the present case, we are satisfied that there is no
violation of concept of separation of powers. As we have noted
above, there is no rigid separation of powers under the
Constitution and each one of the arms at times perform other
functions as well. The Member of Parliament is ultimately F
responsible to Parliament for his action as an MP even under
the Scheme. All Members of Parliament be it a Member of Lok
Sabha or Rajya Sabha or a nominated Member of Parliament
are only seeking to advance public interest and public puepose
and it is quite logical for the Member of Parliament to carry out G
developmental activities to the constituencies they represent.
There is no reason to believe that the MPLAD Scheme would
not be effectively controlled and implemented by the District
Authority in the case of Panchayats and Commissioners/Chief
H
286 SUPREME COURT REPORTS [2010) 6 S.C.R.
A Executive Officers, in the case of Municipalities and
Corporations with adequate safeguards under the guidelines.
70. Furthermore, Chapter 3 of the Guidelines provide the
procedure to be followed for the implementation of the Scheme.
As per the guidelines, the MP's function is merely to
8
"recommend a work" [vide Chapter 3.1). The District Authority
and Chief Executive Officer have been entrusted with the
absolute authority to discharge upon the feasibility of works
recommended, assess the funds required for execution of the
work, implementation of works by engaging an implementing
C agency, supervision of work and ensure financial transparency
by providing audit certificates and utilization certificate. As such
it is clear that the District Authority and Municipal Authority play
a pivotal role in implementation and execution of MPLAD
Scheme. Major role is played by Panchayats, Municipalities and
D Corporations under MPLAD Scheme in execution and
implementation of works. As rightly pointed out by the learned
amicus curiae and Additional Solicitor General, the Scheme
concentrates on community development and creation of
assets at the grass-root level and in such circumstances, the
E same cannot be interfered with by the courts without reasonable
grounds. As mentioned earlier, the role of an MP in MPLAD
Scheme is merely recommendatory in nature and the entire
execution has been entrusted to the District/Municipal Authority
which belongs to the executive organ. It is their responsibility
F to furnish completion certificate, audit certificate and utilization
certificate for each work and if this is not done further funds can
not be released.
71. It is also the grievance of the petitioners that with the
passing of 73rd and 74th Amendments to the Constitution
G introducing Part-IX in relation to the Panchayat and Part IX-A
in relation to Municipalities, the entire area of local self-
government has been entrusted to Panchayats under Article
243G read with Schedule 11 and to the Municipalities under
Articles 243W, 243ZD and 243ZE read with Schedule 12 of
H
BHIM SINGH v. UNION OF INDIA AND ORS. 287
[P. SATHASIVAM, J.]
the Constitution. According to them the MPLAD Scheme is A
inconsistent with Part-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 Member of Parliament B
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 Part-IX and IX-A of the Constitution. It was
argued that the Scheme introduces a foreign element which c
takes over part of the functions of the Panchayats and
Municipalities. It was further contended that the implementing
agency need not be the Panchayat or Municipality. Hence, the
discretion, power and jurisdiction of the Panchayat and
Municipality to decide on what project is to be located in which
0
site is to be implemented through which agency is taken away.
In other words, according to the learned counsel for the
petitioners, this power being denuded by the Scheme, the
Scheme is rendered wholly unconstitutional and bad.
72. We are not inclined to accept this contention raised E
by the petitioners. The extracts qf 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 (PRls) will be the preferred F
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. G
Whether MPLADS leads to unfair advantage of sitting
MPs as against their rivals
73. Finally, an argument was made by the petitioners that
the scheme violates the democratic principle of free and fair H
288 SUPREME COURT REPORTS [2010] 6 S.C.R.
A elections. It was argued that sitting MPs had a clear edge over
their opponents as they had MPLAD Scheme at their disposal
which they could spend or promise to spend. It was argued that
there is a possibility of misusing the money available under the
Scheme and it gives unfair advantage to sitting MPs.
B
74. This argument is liable to be rejected as it is not based
on any scientific analysis or empirical data. We also find this
argument a half-hearted attempt to contest the constitutionality
of the Scheme. MPLADS makes funds available to sitting MPs
for developmental work. If the MP utilizes the funds properly, it
C would result in his better performance. If that leads to people
voting for the incumbent candidate, it certainly does not violate
any principle of free and fair elections.
75. As we have already noted, MPs are permitted to
D recommend specific kinds of works for the welfare of the
people, i.e. which relate to development and building of durable
community assets (as provided by Chapter 1.3 of the
Guidelines). These works are to be conducted after approval
of relevant authorities. In such circumstances, it cannot be
E claimed that these works amount to an unfair advantage or
corrupt practices within the meaning of the Representation of
the Peoples Act, 1951. Of course such spending is subject to
the above Act and the regulations of the Election Commission.
Conclusions
F
76. In the light of the above discussion, we summanL.
conclusions as follows:
(1) Owing to the quasi-federal nature of the Constitution
and the specific wording of Article 282, both the
G
Union and the State have the power to make grants
for a purpose irrespective of whether the subject
matter of the purpose falls in the Seventh Schedule
provided that the purpose is "public purpose" within
the meaning of the Constitution.
H
SHIM SINGH v. UNION OF INDIA AND ORS. 289
[P. SATHASIVAM, J.]
(2) The Scheme falls within the meaning of "public A
purpose" aiming for the fulfillment of the
development and welfare of the State as reflected
in the Directive Principles of State Policy.
(3) Both Articles 275 and 282 are sources of spending B
funds/monies under the Constitution. Article 282 is
narmally meant for special, temporary or ad hoc
schemes. However, the matter of expenditure for a
"public purpose", is subject to fulfillment of the
constitutional requirements. The power under Article
282 to sanction grant is not restricted.
c
(4) "Laws" mentioned in Article 282 would also include
Appropriation Acts. A specific or special law need
not be enacted by the Parliament to resort to the
provision. Thus, the MPLAD Scheme is valid as D
Appropriation Acts have been duly passed year
after year.
(5) Indian Constitution does not recognize stric't
separation of powers. The constitutional principle E
of separation of powers will only be violated if an ·
essential function of one branch is taken over by
another branch, leading to a removal of checks and
balances.
(6) Even though MPs have been given a seemingly F
executive function, their role is limited to
'recommending' works and actual implementation
is done by the local authorities. There is no removal
of checks and balances since these are duly
provided and have to be strictly adhered to by the G
guidelines of the Scheme and the Parliament.
Therefore, the Scheme does not violate separation
of powers.
(7) Panchayat Raj Institutions, Municipal as well as H
290 SUPREME COURT REPORTS (2010] 6 S.C.R.
A local bodies have also not been denuded of their
role or jurisdiction by the Scheme as due place has
been accorded to them by the guidelines, in the
implementation of the Scheme.
(8) The court can strike down a law or scheme only on
B
the basis of its vires or unconstitutionality but not
on the basis of its viability. When a regime of
accountability is available within the Scheme, it is
not proper for the Court to strike it down, unless it
violates any constitutional principle.
c
(9) In the present Scheme, an accountability regime
has been provided. Efforts must be made to make
the regime more robust, but in its current form,
cannot be struck down as unconstitutional.
D
(10) The Scheme does not result in an unfair advantage
to the sitting Members of Parliament and does not
amount to a corrupt practice.
77. Accordingly, we hold that the impugned MPLAD
E Scheme is valid and intra vires of the Constitution and all the
writ petitions transfer petition as well as the transferred cases
are liable to be dismissed as devoid of any merit, consequently,
the same are dismissed. No order as to costs.
F D.G. Writ Petitions and transferred cases dismissed.
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