SC upholds validity of UP local area dev scheme for MLAs, MLCs

Elected representatives have a legitimate role in meeting development needs of their constituencies, the Supreme Court today said while upholding with certain riders the legality of the scheme providing grants to MLAs and MLCs in Uttar Pradesh for local area development.
"Elected representatives have a vital role in democracy. They have an intrinsic connection with their constituencies and have a legitimate role to discharge in meeting development needs of their constituencies. Article 243ZD does not exclude their role.
"On the contrary, they perform a supplemental role by enhancing and supporting the work of the institutions of local self-governance," a bench headed by Chief Justice T S Thakur said.

The judgement was delivered on an appeal filed by an NGO Lok Prahari challenging the constitutional validity of Uttar Pradesh government's Vidhayak Nidhi Scheme (VNS), introduced in 1998-99 with an allocation of Rs 50 lakh to every MLA and MLC.
The scheme was also upheld by the Allahabad High Court in 2013.
The apex court bench said, "We are in agreement with the view of the Allahabad High Court that the Vidhayak Nidhi Scheme does not per se violate Article 243ZD (Committee for district planning) of the Constitution or the UP Planning and Developmental Act, 1999."

However, the apex court said that the principles which were formulated in the 2010 judgment of the Constitution Bench in Bhim Singh Case upholding the validity of Centre's MPLAD Scheme (Members of Parliament Local Area Development Scheme) were not even noticed nor there was any attempt on the part of the state to ensure that the guidelines that govern the VNS were brought in consonance with the provisions of Parts IX and IXA of the Constitution and the observations contained in Bhim Singh judgement.

The apex court directed that some safeguards be followed
while implementing VNS, including that the role of the elected representatives would be to recommend work of developmental nature in their constituencies within the budget allotted under the scheme.
"The feasibility of the work, estimate of funds, selection of the implementing agency and supervision of work must be independently determined by a nominated authority or body of the state government.
"The scheme must include sufficient safeguards to ensure financial transparency, such as proper supervision of work, monitoring quality and timely completion besides procedures to ensure proper audit and utilisation of funds," it said, adding that the revised guidelines shall apply to all projects to be undertaken hereafter under VNS and the exercise shall be completed by the state within two months.

The Allahabad HC in its judgement on May 30, 2013, had upheld the validity of the VNS but had also emphasised on the need for ensuring accountability in regard to public money and to the duty of the state to take all possible steps to prevent their misuse.
The petition was filed before the high court by the NGO's General Secretary S N Shukla in 2004 seeking to challenge constitutionality of VNS and for obtaining an order restraining the state from enhancing the budgetary outlay from Rs 75 lakh to Rs 1 crore per MLA/MLC, as was proposed.
He had submitted that if the challenge to the validity of the Scheme is not accepted, then in alternative, the money allocated under the Scheme should be permitted to be utilised only for meeting the expenditure on schemes which have been sanctioned under the district plan pursuant to the provisions of Article 243ZD and the UP District Planning Committee Act, 1999.

The NGO had sought to make a distinction between crucial aspects of MPLADS which distinguish from the Vidhayak Nidhi Scheme in Uttar Pradesh. Moreover, it was urged that the judgement of the Constitution Bench would not conclude the issue since Article 243ZD and the provisions of the state legislation of 1999 would apply to the state scheme (and not MPLADS).
The apex court bench noted that grievance of the NGO is also that unlike MPLADS, VNS has been used to finance buildings belonging to private organizations, which explains why there was a clamour to give money to schools controlled by the MLA/MLC or by the members of his or her family.

"Hence, it was asserted that the accountability mechanism which this Court found to be existing in MPLADS is absent under the Vidhayak Nidhi Scheme," the bench said.