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7. Notice of motion in this petition was issued on 10.10.2012. The respondents filed their replies and on the next date of hearing, i.e., 01.1.2012 statement was made by Mr. Ashok Aggarwal, learned Advocate General of Punjab that a cheque of Rs.1 Crore given to the school had not been encashed and it was taken back from the school and further course of action would be taken only after the decision in the present writ petition.

8. The respondents have strongly objected to the maintainability of this writ petition and the submission is that the spending of the amount by the State cannot be the subject matter of judicial scrutiny by the Courts. Mr. Aggarwal made strong plea predicated on the doctrine of separation of powers with the submission that the matter pertains to exclusive domain of the Legislature and whether the expenditure was incurred wisely or there was irregularity could be decided only by the Legislature at the Floor of the House. His submission in this behalf was that the Constitution of India has laid down an elaborate procedure in respect of financial matters, the essential features of which are (i) that no tax can be imposed or levied without authority of law (Article 265) and (ii) no money out of the Consolidated Funds of India or the Consolidated Funds of a State shall be appropriated except in accordance with law and for the purposes and in the manner provided in the Constitution (Article 266[3]). The Legislative procedure in regard to financial matters of the States is outlined in Articles 202 to 207 of the Constitution. Article 202 of the Constitution incorporates the requirement to lay before the House of the State Legislature the statement of the estimated receipts and expenditure of the State for the year showing separately the sums required to meet expenditure charged upon the Consolidated Fund of the State and the sums required to meet other expenditure proposed to be made from the Consolidated Fund of the State. As per Article 203 (1) so much of the estimates as relates to expenditure charged upon the Consolidated Fund of the State shall not be submitted to the vote of the Legislative Assembly. As per Article 203(2) so much of the estimates as relates to other expenditure shall be submitted in the form of demands for grants to the Legislative Assembly and the Legislative Assembly shall have the power to assent, or to refuse to assent to any demand or assent to a demand with reduction. Article 204 provides that after the grants have been made by the Assembly under Article 203, a Bill shall be introduced to provide for the appropriation out of the Consolidated Fund of the State of all moneys required to meet the grants made by the Assembly and the expenditure charged on the Consolidated Fund of the State. In accordance with the above provisions, the budget proposals are introduced in the State Legislature in the beginning of the Financial Year and once these proposals are approved, the Budget becomes final. The amount indicated in the Budget can thereafter be spent as per the guidelines of the relevant scheme. If the amount authorized for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement or if any money has been spent on any service during a financial year in excess of the amount granted for that service and for that year, the needed amendments are submitted as revised estimates and subsequently got approved as supplementary, additional or excess grants (Article 205). He also referred to Article 282 of the Constitution of India, which empowers the State Government for any grant for any purpose. Article 282 reads as under:

11. The preliminary issue which needs to be determined is as to whether this Court can entertain such a plea raised in the petition having regard to the objections raised by the respondents to the exercise of judicial powers over this expenditure.

12. As per Article 282, it is permissible for the Union or the State to make any grant for any purpose, even when that is not the purpose for which the Legislature may make laws. It was argued by the learned Advocate General that the grant sanctioned in the present case to the school, as financial assistance for its various new development works/upgradation of existing infrastructure of the school, where a large number of youngsters of Punjabi origin study since independence, is lawful. It was also stressed that it has been a democratic practice to give grants to institutions and for causes or for any other public purpose or as goodwill gestures even though the institution or cause has no direct connection with the State concerned. The submission was that such an expenditure was beyond the pale of scrutiny by the Court. Learned A.G. referred to certain judgments wherein provisions of Article 282 of the Constitution have been interpreted. First judgment on which he placed reliance is that of Karnataka High Court in the case of K.N. Subba Reddy Vs. State of Karnataka and Others, AIR 1993 Karnataka 66. That was a case where the State Government had incurred expenditure on a function to mark 2nd Anniversary of Assumption of Office of the Chief Minister. Proprietary of incurring such an expenditure was assailed by filing a writ petition on the ground that this was a wasteful expenditure spent to glorify the Chief Minister and the expenditure was also without the authority of law, which was even contrary to the austerity policy adopted by the Government as disclosed in the budgetary speech made by the Chief Minister. It was also argued that the release of buses in the State for the said function would cause great public inconvenience and the land where the function was sought to be held itself was involved in litigation between the Government and the private parties. Therefore, it was not appropriate to hold a conference on such a land. Some of the other arguments, which were advanced by the petitioner are contained in the following para of the said judgment:

16. The aforesaid dicta stating the legal position enshrined in Article 282 of the Constitution is affirmed by the Constitution Bench of the Supreme Court in a recent judgment as well in the case of Bhim Singh Vs. Union of India and Ors., 2010 (5) SCALE 37. The Apex Court in that case held that considering the quasi judicial nature of the Constitution, Article 282 should be given the widest possible interpretation. On that, the Court upheld the validity of M.P.L.A.D. Scheme and the Annual Recurring Public Welfare Expenditure Scheme from Consolidated Funds as intra-vires the Constitution. It was held that the Central or State powers under Article 282 for public purpose are not restricted by Schedule VII and on the following considerations, M.P.L.A.D. Scheme was held to be justified:

            (i)       Directive Principles of State policies;

            (ii)      Public property and the insertion of Article 282 from

                      the very beginning of the Constitution;

            (iii)     Several past welfare measure/schemes under Article
282;

            (iv)      Similar provision was contained in Section 150(2)

                      under        the   heading     "Miscellaneous       Financial

Provisions" under the Government of India Act, 1935 and foreign Constitution of democratic country like USA and Australia.