LOK PRAHARI THR.ITS GNRL.SECY,S.N.SHUKLA Vs STATE OF U.P..
Bench: T.S. THAKUR,A.M. KHANWILKAR,D.Y. CHANDRACHUD
Case number: C.A. No.-011004-011004 / 2016
Diary number: 30096 / 2013
Advocates: PETITIONER-IN-PERSON Vs
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REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No 11004 OF 2016 [Arising out of SLP (C) No. 33119 of 2013]
LOK PRAHARI THR. ITS GNRL. SECY, S N SHUKLA .....APPELLANT
Versus
STATE OF U P AND ORS .....RESPONDENTS
J U D G M E N T
Dr D Y CHANDRACHUD, J
Leave granted.
2 The appellant has failed in a challenge to the legality of the Vidhayak Nidhi
Scheme in the State of Uttar Pradesh which provides for annual budgetary grants to
Members of the Legislative Assembly and Legislative Council for facilitating
development work in their constituencies.
The Allahabad High Court by a judgment and order dated 13 May 2013 dismissed the
writ petition under Article 226 of the Constitution. This has given rise to the
institution of these proceedings.
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3 In 1993, the Prime Minister of India announced a scheme, popularly known by
the acronym MPLADS (an abbreviation for Members of Parliament Local Area
Development Scheme). The Scheme provides for annual budgetary grants by the
Union Government to enable Members of Parliament to recommend work of a
developmental nature with an emphasis on creating durable community assets based
on local necessities in their constituencies. The constitutional validity of the Scheme
was adjudicated upon and upheld in a judgment of a Constitution Bench of this Court
rendered on 6 May 2010 in Bhim Singh v. Union of India1.
4 In the State of Uttar Pradesh, a scheme known as the Vidhayak Nidhi Scheme
was introduced in the State Budget in 1998-1999 with an allocation of Rupees fifty
lakhs for every Member of the Legislative Assembly and Legislative Council. In the
Budget of 2000-2001, the allocation under the Scheme was enhanced to Rupees
seventy five lakhs. The appellant moved the High Court in its writ jurisdiction in 2004
seeking to challenge the constitutionality of the Vidhayak Nidhi Scheme and for
obtaining an order restraining the state from enhancing the budgetary outlay from
Rupees seventy five lakhs to one crore per MLA/MLC, as was proposed. The
appellant submitted that if the challenge to the validity of the Scheme is not accepted,
then in the alternative, the moneys allocated under the Scheme should be permitted to
be utilized only for meeting the expenditure on schemes which have been sanctioned
under the district plan pursuant to the provisions of Article 243ZD and the U P District
Planning Committee Act, 1999.
5 The primary submission of the appellant before the High Court (and in these
proceedings under Article 136 of the Constitution as well) is that the field of 1 (2010) 5 SCC 538
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development plans for districts is occupied by virtue of the provisions contained in
Article 243ZD and the enactment of the state legislature noted above. According to
the appellant, it is only the District Planning Committee which can identify or approve
of a development plan. Hence, it was urged that elected representatives of the state
legislature cannot be permitted to select a scheme other than what is within the
purview of an approved development plan prepared by the District Planning
Committees under the state legislation of 1999. The judgment of the Constitution
Bench of this Court in Bhim Singh (Supra) had been rendered during the pendency of
the writ petition in the High Court. The appellant sought to make a distinction
between crucial aspects of MPLADS which distinguish from the Vidhayak Nidhi
Scheme in Uttar Pradesh. Moreover, it was urged that the judgment of the Constitution
Bench would not conclude the issue since Article 243ZD and the provisions of the
state legislation of 1999 would apply to the state scheme (and not MPLADS).
6 The Division Bench of the High Court held that there is no distinction between
MPLADS and the Vidhayak Nidhi Scheme since under both the central and the state
schemes, the recommended work has to relate to one district or the other within the
country. The High Court adopted the view that the power of identifying and
recommending work of a developmental nature conferred upon the elected
representatives – be they Members of Parliament under MPLADS or MLAs/MLCs
under the state scheme is supplemental to the power vested in the District Planning
Committee constituted under the state legislation. Hence, while dismissing the writ
petition, the High Court held that the judgment of the Constitution Bench in Bhim
Singh was dispositive of the controversy.
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7 In the concluding part of its judgment and order, the High Court dwelt on the
grievance which was urged by the appellant on the lack of accountability in respect of
moneys disbursed under the scheme and certain allegations of the misuse of funds
which the appellant had addressed, primarily based on certain newspaper reports. The
High Court granted liberty to the appellant to formulate its suggestions for
consideration by the Principal Secretaries in the Department of Planning and
Development and the Legislative Department of the State Government. Dealing with
that aspect, the High Court observed as follows :
“Since the main prayer in this writ petition has already been discussed above and not found acceptable, the writ petition is dismissed but liberty is granted to the appellant to formulate its suggestion for consideration by the Principal Secretary, Planning and Development, U.P. Government as well as Principal Secretary, Legislative Department, U.P. Government. We are also of the view that suggestion should receive serious consideration of all the concerned authorities for the simple reason that public money should always be accountable and State has a duty to take all possible steps to prevent misuse of public money particularly when murmur against perceived misuse of Vidhayak Nidhi is becoming more audible. We expect the authorities to act in the matter with due sincerity and promptitude so that there is no occasion for any further public interest litigation in the matter.” (emphasis supplied)
Aggrieved by the inaction of the State Government in dealing with the representation
submitted by it, the appellant moved a contempt petition before the High Court.
Eventually, an order was passed by the Principal Secretary in the Rural Development
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Department of the State Government on 21 May 2014 and by the Principal Secretary
in the Planning Department on 17 June 2014.
8 Article 243ZD is in Part IXA of the Constitution which deals with
Municipalities. Parts IX (which deals with Panchayats) and IXA were introduced by
the seventy third and seventy fourth constitutional amendments. Article 243ZD
provides for the constitution of District Planning Committees for every district in each
state for the preparation of a draft developmental plan for the district as a whole. The
provision also enables the legislature of each state to enact legislation setting down the
composition of the District Planning Committees, the manner in which seats on the
Committees shall be filled up and the functions of the Committees, relating to district
planning among other things Article 243ZD is as follows :
“243ZD. Committee for district planning (1) There shall be constituted in every State at the district level a District Planning Committee to consolidate the plans prepared by the Panchayats and the Municipalities in the district and to prepare a draft development plan for the district as a whole; (2) The Legislature of a State may, by law, make provision, with respect to-
(a) the composition of the District Planning Committees; (b) the manner in which the seats in such Committees shall be filled: Provided that no less than four-fifths of the total number of members of such Committee shall be elected by, and from amongst, the elected members of the Panchayat at the district level and of the Municipalities in the district in proportion to the ratio between the population of the rural areas and of the urban areas in the district;
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(c) the functions relating to district planning which may be assigned to such Committees; (d) the manner in which the Chairpersons of such Committees shall be chosen.
(3) Every District Planning Committee shall, in preparing the draft development plan-
(a) have regard to-
(i) matters of common interest between the Panchayats and the Municipalities including spatial planning, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;
(ii) the extent and type of available resources whether financial and otherwise;
(b) consult such institutions and organizations as the Governor may, by order, specify.
(4) The Chairperson of every District Planning Committee shall forward the development plan, as recommended by such Committee, to the Government of the State.”
9 In preparing the draft development plans, the District Planning Committee is to
have regard to the matters of common interest between panchayats and municipalities
including spatial planning, sharing of water and other physical or natural resources
and the integrated development of infrastructure and environmental conservation.
Moreover, each committee must have due regard to the available resources, financial
and otherwise.
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10 In exercise of the power conferred by clause (2) of Article 243ZD, the state
legislature of Uttar Pradesh enacted the U P District Planning Act, 1999 to effectuate
the constitutional provisions for the setting up of District Committees and for the
preparation of development plans for the districts. The importance of the provisions of
Article 243ZD has been noticed in a judgment of a Bench of two learned Judges of
this Court in Rajendra Shankar Shukla v. State of Chhattisgarh2 :
“17. After the insertion of Part IXA in the Constitution, development plan for a district can only be drawn by the democratically elected representative body i.e. DPC, by taking into account the factors mentioned in clauses (3)(a)(i) and (ii)of Article 243ZD. As per clause (4) of Article 243ZD, the Chairman of other DPC shall forward the development plan as recommended by the Committee to the Government of the State.”
Emphasising the importance of the role of the District Planning Committee, this Court
held that it is not open to a development authority to unilaterally prepare a
development scheme resulting in a re-constitution of land without taking into
consideration the opinion and suggestions of a democratically elected body such as
the District Planning Committee.
11 Basing its submissions on the provisions of Article 243ZD and the state
legislation of 1999, the appellant contends that the entire field stands occupied by the
law made by the state legislature pursuant to the Constitution. Hence, it has been
urged that it is not open to the State Government by means of executive action, as
2
(2015) 10 SCC 400
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manifested in the formulation of the Vidhayak Nidhi Scheme to permit elected
members of the state legislature to select development work in their constituencies
which may not accord with the development plans formulated by the District Planning
Committees. To the extent that the scheme allows a departure, it has been urged that it
would be ultra-vires. Alternatively, it has been suggested that the scheme may be
confined to allowing elected members of the state legislature to recommend only such
work as is duly sanctioned under the development plans prepared by the District
Planning Committees. In this context, it has been submitted that the above issue,
which was sought to be canvassed before the High Court in the present case, was not
considered in the judgment of the Constitution Bench in Bhim Singh, since it would
not arise in relation to MPLADS which was in question in that case.
12 In the judgment of Bhim Singh, the Constitution Bench upheld the validity of
MPLADS. The conclusions in the judgment are summarised below :
(i) MPLADS is intra-vires Article 282 as it falls within the meaning of the expression “public purpose” by aiming towards the fulfilment of
developmental needs; (ii) a mere allegation of the misuse of funds would not justify invalidating
the scheme especially since the scheme provides for several layers of
accountability; (iii) there is no violation of the doctrine of separation of powers inasmuch as
MPLADS is effectively controlled and implemented by the district
authorities with adequate safeguards under the applicable guidelines;
and (iv) the role of Members of Parliament under MPLADS is limited to the
initial choice of developmental work in the area, whereas the
verification of eligibility and feasibility of the recommended work and
its sanctioning and execution is carried out by local authorities or
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administrative bodies. It is the district authorities which identify the
agency through which a particular kind of work should be executed and
Panchayati Raj Institutions and Urban Local Bodies are preferred
agencies for implementation of work under MPLAD.
In Bhim Singh, the Constitution Bench while upholding the validity of MPLADS
held that the scheme supplements the efforts of the states and local authorities.
Moreover, the scheme was held not to be an interference in the functional or financial
domain of the local planning authorities. In that context, the Constitution Bench
observed thus :
“76. Further, the Scheme only supplements the efforts of the State and other local authorities and does not seek to interfere in the functional as well as financial domain of the local planning authorities of the State. On the other hand, it only strengthens the welfare measures taken by them. The Scheme in its present form, does not override any powers vested in the State Government or the local authority. The implementing authorities can sanction a scheme subject to compliance with the local laws.”
13 The impact of the provisions of the Seventy third and Seventy fourth
amendments to the Constitution by which Parts IX and IXA were introduced also
came up for deliberation in the course of the judgment. The grievance of the
appellants was that MPLADS introduced a decision making authority which is
extraneous to Parts IX and IXA. The submission was noted in the following terms :
“91. It is also the grievance of the appellants that with the passing of the Seventy third and Seventy fourth Amendments to the Constitution introducing Part IX in relation to the panchayat and Part IXA in relation to the municipalities, the entire area of local
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self-government has been entrusted to the panchayats under Article 243-G read with Schedule 11 and the municipalities under Articles 243-W, 243-ZD and 243-ZE read with Schedule 12 of the Constitution. According to them the MPLAD Scheme is inconsistent with Parts IX and IX-A insofar as the entire decision-making process in regard to community infrastructure of works of development nature for creation of durable community assets including drinking water, primary education, public health, sanitation and roads, etc is given to the Members of Parliament even though the decision-making process in regard to these very same matters is conferred to the panchayats and municipalities. The MPLAD Scheme, according to them, is in direct conflict with Parts IX and IX-A of the Constitution. It was argued that the Scheme introduces a foreign element which takes over part of the functions of the panchayats and municipalities.”
14 However, in response to the submission, the Constitution Bench held that the
function of a Member of Parliament under the applicable guidelines is merely to
recommend a piece of work. The district authority is entrusted with the absolute
authority to decide upon the feasibility of the work recommended, assess to the funds
required for execution, engage an implementing agency, supervise the work and
ensure financial transparency by providing audit and utilization certificates. The
Constitution Bench observed that a major role is assigned under MPLADS to
panchayats, municipalities and corporations. Rejecting the argument of invalidity, this
Court observed as follows :
“93…The extracts of the Guidelines we have produced above make it clear that even though the district authority is given the power to identify the
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agency through which a particular work recommended by the MP should be executed, the Panchayati Raj institutions (PRIs) will be the preferred implementing agency in the rural areas, through the Chief Executive of the respective PRI, and the implementing agencies in the urban areas would be urban local bodies, through the Commissioners/Chief Executive Officers of Municipal Corporations, municipalities”.
The submission that the scheme violated the constitutional principle of separation of
powers was accordingly repelled.
15 In the present case, relying upon the judgment in Bhim Singh, the High Court
held that the Vidhayak Nidhi Scheme only supplements the efforts of the states and
local authorities. In the view of the High Court, the power of identifying and
recommending work of a developmental nature given to elected representatives, be
they Members of Parliament or of the Legislative Assembly or Legislative Council is
supplemental to the power conferred upon District Planning Committees and cannot
be invalidated on the ground that it cannot co-exist with the Act of 1999. The
decision of the High Court on this aspect is in consonance with the judgment of the
Constitution Bench. The Vidhayak Nidhi Scheme does not (in its true scope and
purpose) supplant or substitute the role of the District Planning Committees
constituted under the provisions of the state legislation of 1999. The guidelines which
were formulated by the State Government while announcing the scheme in 1998 are
material and have been adverted to in the order passed by the Secretary, Rural
Development on 21 May 2014. Para 1.1 of the guidelines states that the Chief
Minister had declared the constitution of a fund of Rupees two hundred and sixty
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crores to provide an outlay of Rupees fifty lakhs per year to elected representatives of
the state legislature to facilitate development work within their areas to meet local
requirements and in the interest of balanced development. Para 2.2 provides that the
construction work would be developmental in nature for the creation of local assets
and funds shall not be utilized for meeting revenue expenditure. Para 4.2 envisages
that audit of the amount to be spent from the MLA fund would be conducted by the
Rural Development Department. The technical audit of construction works carried out
every year would be made by the technical audits cell. In order to ensure transparency,
every citizen would be entitled to have information in regard to the particulars of work
being carried out through the service provider agency/Rural Development
Department. Under para 5.1, the Chief Developmental Officer is appointed as Nodal
Officer to maintain coordination between the State Government and the Rural
Development Department. There are provisions for the inspection of the development
work by the Chief Development Officer and by the officers at the sub-regional and
divisional levels. The Chief Development Officer who is appointed as a Nodal Officer
is also associated with the District Planning Monitoring Committee. Consequently, the
Chief Development Officer is entrusted with the work of ensuring that there is no
duplication of work. The examination of the work recommended by the elected
representatives is made by the Chief Development Officer. The fund is maintained
through the District Rural Development Agency which together with the technical
committee is required to inspect the work carried out under the scheme. A further
government order has been issued on 29 November 2012 for clarifying certain
ambiguities in the scheme.
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16 The aspect which merits careful attention is the grievance of the appellant that
the High Court failed to notice critical differences between MPLADS and the
Vidhayak Nidhi Scheme though these were pleaded specifically in the affidavits filed.
These differences have a bearing on the role which is assigned to the elected
representatives in the decision making process.
17 In Bhim Singh, this Court had upon a careful analysis of the guidelines framed
under MPLADS noted that the function of a Member of Parliament under clause 3.1 is
merely to “recommend a work”. On the other hand, the district authorities are
assigned with the authority to decide upon the feasibility of the work recommended,
assess the requirement of funds, engage the implementation agency, supervise the
work and to ensure financial transparency in the form of audit and utilization
certificates. Moreover, though the district authority is given the power to identify the
implementing agency which would execute the work recommended by the elected
representatives, panchayati raj institutions are the preferred implementing agencies in
the rural areas while in urban areas it would be urban local bodies who would have a
preferred position for implementation under MPLADS. It was having due regard to
these facets of the scheme that this Court in Bhim Singh rejected the submission that
the scheme had taken over the functions of panchayats and municipalities under Parts
IX and IXA of the Constitution.
18 In the present case, the State Government filed a counter affidavit through its
Special Secretary in the Rural Development Department before the High Court.
Dealing with the grievance in the writ petition, the Special Secretary set out the role
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which is assigned to the elected representatives in the context of the Vidhayak Nidhi
Scheme, thus :
“…..The role of Members of Legislative Assembly and Members of Legislative Council is to identify the priorities of developmental works for their constituencies and recommend the same to Chief Development Officer of the concerned district, who implement the work in accordance with the guidelines and Government Orders relating to the Vidhayak Nidhi.”
The appellant filed an affidavit on 10 October 2011 specifically in the context of the
judgment of this Court in Bhim Singh. The affidavit makes a grievance of the fact
that unlike MPLADS, where urban local bodies for urban areas and panchayati raj
institutions in rural areas are to be the preferred implementing agencies, in the case of
the Vidhayak Nidhi Scheme not only the implementing agency but the contractor is
also usually of the choice of the MLA/MLC. The grievance of the appellant is as
follows :
“Again, unlike the MPLAD Scheme, (Para 97(7) of the judgment) under Vidhayak Nidhi Scheme the Municipal and Panchayati Raj institutions have been denuded of their role and jurisdiction. Under Para 2.11 of the MPLAD Scheme urban local bodies in the urban area and panchayati raj institutions in the rural areas have to be the preferred implementing agency. This caveat is missing in the case of Vidhayak Nidhi. Moreover, Not only the implementing agency but also the contractor is usually the choice of the MLA/MLC leading to scope for wide spread corruption in the execution of the works under the scheme.” (emphasis supplied)
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Again, this was reiterated in the following extracts in the same affidavit :
“The checks and balances stipulated in the case of MPLAD are not available in the case of Vidhayak Nidhi. While under MPLAD Scheme the role of MP is theoretically limited to recommending a work, under para 3.1 of the Vidhayak Nidhi scheme, consent of the MLA/MLC is required not only for selection of the work but also for its sanction which includes the location and cost thereof, and the selection of implementing agency. This makes them the de facto sanctioning authority for the work. Thus, the function of sanctioning these works is performed by them as it is subject to their veto.” (emphasis supplied)
19 The grievance of the appellant is also that unlike MPLADS, the Vidhayak
Nidhi Scheme has been used to finance buildings belonging to private organizations,
which explains why there was a clamour to give money to schools controlled by the
MLA/MLC or by the members of his or her family. This, it was submitted was
resulting in a misappropriation of public funds since the construction of school
buildings can be implemented through the principal/manager. Hence, it was asserted
that the accountability mechanism which this Court found to be existing in MPLADS
is absent under the Vidhayak Nidhi Scheme.
20 The State Government has not dealt with this grievance of the appellant either
in the pleadings filed in the course of the proceedings before the High Court or in the
counter affidavit which has been filed before this Court. The grievance that unlike
MPLADS, the role of the elected representatives of the state legislature goes beyond
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merely recommending the work has remained uncontroverted. The judgment of this
Court in Bhim Singh emphasised that MPLADS merely supplements the welfare
schemes of the states and other local authorities and does not interfere in the
functional or financial domain of the local planning authorities. In that context, it was
noted on the basis of the guidelines that the role of the elected representatives is
confined merely to recommending the work which is to be carried out. Thereafter, the
decision making process commencing from the assessment of the feasibility of the
work, estimation of the funds required and selection of the implementing agency as
well as the work of supervision is entrusted to the competent authorities in the district
levels. The provisions of Parts IX and IXA of the Constitution are duly observed since
panchayati raj institutions in the rural areas and urban local bodies in the urban areas
are to be the preferred implementing agencies under MPLADS. The State Government
ought to have applied its mind to these crucial aspects which distinguish MPLADS
from the Vidhayak Nidhi Scheme. When the Division Bench of the High Court
delivered its judgment on 30 May 2013, it emphasised the need for ensuring
accountability in regard to public moneys and to the duty of the state to take all
possible steps to prevent their misuse. The Division Bench noted that the “murmur
against perceived misuse of Vidhayak Nidhi is becoming more audible”. It was in this
view, that a direction was issued to the Principal Secretaries in the Planning and
Development Department and in the Legislative Department to take heed of the
suggestions of the appellants with “sincerity and promptitude”. The State Government
in the two orders which have been passed by its Principal Secretaries on 21 May 2014
and 17 June 2014 paid only lip service to the grievance of the appellant. The
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principles which have been formulated in the judgment of the Constitution Bench in
Bhim Singh have not even been noticed nor has any attempt been made on the part of
the State Government to ensure that the guidelines which govern the Vidhayak Nidhi
Scheme are brought in consonance with the provisions of Parts IX and IXA of the
Constitution and the observations contained in the judgment of this Court in Bhim
Singh. Hence, while we are of the view that there can be no objection to the state
implementing a scheme of the nature that was upheld by the Constitution Bench in
Bhim Singh, the safeguards which form a part of the MPLAD Scheme should be duly
considered so as to ensure that the role which is ascribed to the district planning
authorities and institutions of local self-governance is not denuded. The safeguards
which must be introduced shall include the following :
(i) the role of the elected representatives would be to recommend the work
of a developmental nature in their constituencies within the budget
allotted under the Scheme; (ii) 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; (iii) panchayati raj institutions in rural areas and municipal bodies in
urban areas may be considered as preferred implementing agencies
having regard to the entrustment of responsibilities under Parts IX and
IXA of the Constitution; (iv) the plans prepared by the District Planning Committees under
Article 243ZD read with the U P District Planning Committee Act,
1999 may be made available by every district Collector to elected
representatives to enable them to decide whether any developmental
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work which has already been identified in the above plan should be
executed in pursuance of the funds made available under the Vidhayak
Nidhi Scheme; and (v) sufficient safeguards should be provided to ensure against conflicts of
interest such as the allocation of funds to institutions controlled by an
elected representative or a member of his or her family; and (vi) The scheme must include sufficient safeguards to ensure
financial transparency, such as proper supervision of work, monitoring
quality and timely completion besides procedures to ensure proper audit
and utilization of funds.
21 We are in agreement with the view of the High Court that the Vidhayak Nidhi
Scheme does not per se violate Article 243ZD or the U P Planning and Developmental
Act, 1999. Elected representatives have a vital role in democracy. They have an
intrinsic connection with their constituencies and have a legitimate role to discharge in
meeting the development needs of their constituencies. Article 243ZD does not
exclude their role. On the contrary, they perform a supplemental role by enhancing
and supporting the work of the institutions of local self-governance. However, it is in
our view necessary that the guidelines which have been formulated by the State
Government are revisited and the directions set out above are complied with so as to
ensure that the guidelines are in conformity with the spirit and underlying purpose of
Parts IX and IXA of the Constitution in terms as held by the Constitution Bench of
this Court in Bhim Singh. The revised guidelines shall apply to all projects to be
undertaken hereafter under the Vidhayak Nidhi Scheme. This exercise shall be
completed by the State Government not later than a period of two months from the
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receipt of the present judgment. The appeal shall accordingly stand disposed of in the
above terms. There shall be no order as to costs.
..................................... CJI [T S THAKUR]
.........................................J [A M KHANWILKAR]
...........................................J [Dr D Y CHANDRACHUD]
New Delhi November 21, 2016.