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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.