Supreme Court upholds constitutional validity of MPLAD scheme

A five-judge bench of the Supreme Court on Thursday unanimously upheld the constitutional validity of the MPLAD scheme under which MPs are allocated Rs two crore annually for development of their constituencies, saying Parliament validly holds powers to disburse funds under it.

"We hold that the MPLAD (MP Local Area Development) scheme is valid," the Constitution Bench headed by Chief Justice K G Balakrishnan said in the unanimous verdict.

Interpreting Articles 282 of the Constitution, the bench said that Parliament validly holds powers to disburse funds for the scheme.

The court said it was satisfied that under the scheme, there is no violation of the separation of powers.

"There is no reason for us to interfere in the scheme," the bench also comprising Justices R V Raveendran, D K Jain, P Sathasivam and J M Panchal said.

The bench, however, said improvement can be made in the working of the scheme.
The opponents of the scheme had alleged it was violative of Article 14 of the Constitution (Right to Equality) as it gave arbitrary powers to an MP without there being proper checks and balances, monitoring and accountability regarding the money being spent under it.

The bench said the mere allegations that the funds are prone to be misused cannot be a ground for scrapping the scheme.

It said that both Lok Sabha and Rajya Sabha have standing committees to monitor the scheme and there are various levels of accountability for its implementation.

The apex court said that the scheme has benefited the local area development by way of providing water, electricity, infrastructure, library and sports facilities.

It rejected the contention of the opponents of the scheme that it gives an unfair advantage to the sitting MPs against their political rivals.

The bench said there is no reason to believe that the MPLADS cannot be implemented and monitored by the district authorities. The scheme is for the public interest and public purpose, it said.

The scheme had come under judicial scrutiny after a sting operation in 2005 showed some MPs allegedly demanding money from contractors to award work for projects under it. The expose had led to the expulsion of members from both Houses of Parliament.

The scheme was first challenged in 1999 by Jammu and Kashmir National Panthers Party chief Bhim Singh and an NGO, Common Cause, alleging that in the absence of any guidelines, the funds allocated under it were misused by MPs.

Later, petitions were also filed in various high courts and on the Centre's intervention, all the petitions were transferred to the apex court.

A three-judge bench had on July 12, 2006 referred the matter to a five-judge Constitution Bench observing that important questions of law needed to be settled.

Attorney General G E Vahanvati, who was then Solicitor General, had submitted that the MPLAD scheme is also a welfare measure implemented with the assistance of the local authorities like other schemes--Jawahar Rozgar Yojna, Indira Gandhi Old Age Pension Scheme and Integrated Child Development Scheme.

The funds under MPLADS were directly released by the Centre to the district authorities and it did not go directly in the hands of the MP, he had submitted.

The Centre had defended the scheme, saying that it had the authority of the law to release money under it as funds were withdrawn from the Consolidated Fund of India by passing the Appropriation Bill.