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Scope of Article 282 of the Constitution

30) Let us consider Article 282 which comes under the heading of `Miscellaneous Financial Provisions". Heavy reliance was placed on this provision by Mr. G.E. Vahanvati, learned amicus curiae and Mr. Mohan Parasaran, learned Additional Solicitor General. We have extracted Article 282 in the earlier part of the judgment. According to Mr. K.K. Venugopal learned senior counsel, appearing for the petitioner, Article 282 contemplates that the identification of a public purpose should precede the making of a grant because without such exercise being undertaken, no decision on the extent of the grant to be made can be taken. Under the MPLAD scheme, it was contended that the grant precedes the identification of the particular public purpose, and this is contrary to Article

282. It is also submitted that in the present case, the MPLAD scheme is a permanent Scheme for transfer of funds each year which can be done only under Article 275 of the Constitution while Article 282 is intended to meet an emergency or an unforeseen situation and it does not envisage a transfer of funds without any limit of time.

31) Mr. Prashant Bhushan, learned counsel appearing for the petitioners, submitted that a clear interpretation of the General Financial Provisions of the Constitution especially Articles 280 and 275 is that the Finance Commission, an independent body, has the mandate to recommend the division of taxes between the Centre and the States and the assignment of Grants in Aid to the revenues of certain States. It is also argued that though the Constitution empowers the Finance Commission to distribute money between the Centre and the States, the power has been shifted to the Planning Commission, which was set up by a resolution of the Government of India in March 1950. According to him, the Planning Commission has never received any parliamentary sanction and has still become an alternative authority to make regular grants given to the States, at the discretion of the Centre. It is pointed out that there is no provision in the Constitution for a body like the Planning Commission and it may be described as a quasi-political body, when compared to the statutory body like the Finance Commission, which is quite independent of the Government. It is further contended that the money being given through the impugned scheme is in clear violation of the specific scheme devised in the Constitution regarding the transfer of funds from the Centre to the States. Article 282, a "Miscellaneous Financial Provision" was added to be used only as an emergency provision. It is their claim that although the language of Article 282 appears to be wide enough to cover all grants, so long as they are for a public purpose, it obviously cannot be construed to mean that the Centre can give grants to States on a regular basis. It was submitted that the regular grants from the Centre to the States can be given only under Article 275 and only in accordance with the Finance Commission's recommendations; that the power under Article 282 is interpreted as providing an alternative channel of regular transfers from the Centre to the States, it would disrupt the delicate fiscal equilibrium which the Finance Commission is expected to bring about through the regular channel under Article 275; that the Constitution makers could not have intended to bring about such a disruption; that if Article 282 was intended to be a second channel for regular transfers from the Centre to the States then it should have found a place along with Articles 268 to 281 under the heading "Distribution of Revenues between the Union and States"; that the fact that Article 282 is separated from those Articles and put under a separate heading, "Miscellaneous Financial Provisions" shows that it is not intended to be used as a second channel of transfers from the Centre to the States. Moreover, a reference was also made to the marginal note on Article 282 "Expenditure defrayable by the Union or a State out of its revenues" to argue that it indicates that the expenditure to be met by the Union or a State to meet a particular situation provided that it is for a public purpose. It is pointed out that any expansion of the scope of Article 282 would necessarily result in the corresponding abridgement of the scope of Article 275, which could not have been intended by the Constitution makers; and Article 282 permits the Centre and the States to incur expenditure even on subjects which are not within the legislative competence of the Centre or the States, as the case may be.

32) Under Article 73, the executive power of the Union to give grants extends to the matters with respect to which the Parliament has the power to make laws. This is an embargo on the Centre's power to give discretionary grants to the States and this embargo is lifted by the non- obstante clause in Article 282 whereby the Centre can give discretionary grants to the States even when it has no legislative power on the subject. It was argued that the lifting of the embargo clearly suggests that the power to give grants under Article 282 is an emergency power to be used in exceptional circumstances. In any case, according to the petitioners, Article 282 only allows money to be defrayed by the Central Government for a particular public purpose though they may fall under State subjects. It, however, does not authorize the Central Government to exercise its executive power on State subjects within the States which is only allowed during an emergency under Article 353 of the Constitution. Therefore, it is contended that Article 282 can be used to transfer money/provide grants to States for use of particular public purposes which may be in the State list but cannot apply to a scheme like the MPLAD Scheme in which a Member of Parliament exercises executive power within the States on matters in the State list.

3) Both Articles 275 and 282 are sources of spending funds/monies under the Constitution. Article 282 is normally meant for special, temporary or ad hoc schemes.

However, the matter of expenditure for a "public purpose", is subject to fulfillment of the constitutional requirements. The power under Article 282 to sanction grant is not restricted.

4) "Laws" mentioned in Article 282 would also include Appropriation Acts. A specific or special law need not be enacted by the Parliament to resort to the provision. Thus, the MPLAD Scheme is valid as Appropriation Acts have been duly passed year after year.