IMPORTANT POINT
The Vidhayak Nidhi Scheme does not per se violate Article 243ZD or the Act, 1999. The Scheme lacks sufficient guidelines and provisions for accountability and financial transparency. It also lacks involvement and role of the District Planning Committees and Panchayati raj institutions.

JUDGMENT

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.

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 India, (2010) 5 SCC 538.

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 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, whi