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P. Sathasivam, J.

1) The petitioners have filed the above writ petitions challenging the Members of Parliament Local Area Development Scheme (hereinafter referred to as the "MPLAD Scheme") as ultra vires of the Constitution of India. They also prayed for direction from this Court for scrapping of the MPLAD Scheme and for impartial investigation for the misuse of the funds allocated in the Scheme.

2) Though the challenge in the writ petitions and the transferred cases is to the constitutional validity of the MPLAD Scheme, in view of substantial question of interpretation of Articles 275 and 282 of the Constitution of India are involved, particularly, transfer of funds from the Union Government to the Members of Parliament, by reference dated 12th July, 2006 a three-Judge Bench headed by Hon'ble the Chief Justice of India referred the same to a Constitution Bench. In this way, the above matters are heard by this Constitution Bench.

7. Whether the MPLAD Scheme gives an unfair advantage to the MPs in contesting elections by violating the provisions of the Constitution?

9) Thus, first we must determine the constitutional scheme regarding allocation of funds and what is the appropriate mode of such allocation, i.e. whether a special enactment is required for such allocation. Then, we must determine if the Parliament is empowered under Article 282 of the Constitution to make allocation under the MPLAD Scheme. Subsequently, we need to see whether a robust accountability mechanism is provided under the Scheme. And finally whether this Scheme violates the constitutional principle of separation of powers. Let us consider the contentions raised by both sides with reference to the constitutional provisions as well as salient features and the guidelines issued then and there for implementation of the MPLAD Scheme.

42) The above analysis shows that Article 282 can be the source of power for emergent transfer of funds, like the MPLAD Scheme. Even otherwise, the MPLAD Scheme is voted upon and sanctioned by the Parliament every year as a Scheme for community development. We have already held that the Scheme of the Constitution of India is that the power of the Union or State Legislature is not limited to the legislative powers to incur expenditure only in respect of powers conferred upon it under the Seventh Schedule, but it can incur expenditure on any purpose not included within its legislative powers. However, the said purpose must be `public purpose'. Judicial interference is permissible when the action of the government is unconstitutional and not when such action is not wise or that the extent of expenditure is not for the good of the State. We are of the view that all such questions must be debated and decided in the legislature and not in court. Accountability under MPLADS

48) The Committee in order to answer the questions that arose in the Era Sezhiyan Report and also the views expressed against the MPLAD scheme by Shri J.M. Lyngdoh, former Chief Election Commissioner on behalf of India Rejuvenation Initiative commented on i) uncontrolled management of the bureaucracy, (ii) Lack of Monitoring System, and (iii) Irregularities in Implementation.

49) In order to bring financial discipline at the district level and reduce the accumulation of unspent funds with the Districts, a new condition of unspent balance for the MP being less than rupees one crore was imposed during the financial year (2004-05). The release procedure was further streamlined and strengthened by prescribing for the original (not photo-copy) of the Monthly Progress Report, duly signed by DC/DM under his seal. This resulted in bringing down the unspent balance. To reduce the accumulated funds further and to improve accountability, some more conditions have been laid down for release of MPLADS funds in a new MPLADS funds release and management procedure which was adopted with effect from 1st June 2005. Now the District Authorities have to submit Utilization Certificates and Audit Certificates also for the earlier releases in addition to fulfilling the aforesaid two conditions before second installment in any given year is considered for release to any MP.