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SC declares discretionary funds 'unconstitutional'

06 December, 2013

ISLAMABAD: The Supreme Court declared on Thursday that the constitution does not permit the use/allocation of funds to MNAs/MPAs/notables solely by the prime minister or a chief minister.

"If there is any practice of allocation of funds to the MNAs/MPAs/notables at the sole discretion of the prime minister/chief minister, the same is illegal and unconstitutional. The government is bound to establish procedure/criteria for governing allocation of such funds for this purpose," the court observed.

A three-member bench of the apex court, headed by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry announced a 38-page judgement in the suo motu case that said former prime minister Raja Pervez Ashraf had doled out billions of rupees in the form of development funds ten days after having completed his tenure in office.

Authoring the judgement the CJP observed that the National Assembly, while giving assent to a grant which is to be utilised by the Executive and which is to be at its discretion, has to follow the procedure provided in articles 80 to 84 of the constitution as well as the Rules of Procedure, 2007. However, such discretionary grant cannot be placed at the absolute discretion of the Executive, the court noted, adding that such discretion has to be exercised in a structured manner.

The judgement reads that there is no provision in the constitution that mandates use/allocation of funds to MNAs/MPAs or notables. "In fact, the very use of the term 'notables' is abhorrent to the Islamic ethos, both Holy Quran and Last Sermon (khutba) of the Holy Prophet Muhammad (PUBH), which envisages that all distinctions on basis of caste, race and colour stand abolished, and the only distinction which remains is that of piety."

It also observes that although funds can be provided for development schemes by way of supplementary grant but for that purpose procedure provided in articles 80 to 84 of the constitution and the rules/instructions has to be followed strictly. The court said that funds could be allocated by way of re-appropriation but the procedure provided in the constitution and the rules have to be followed in true perspective. The court also observed that no bulk grant can be made in the budget without giving detailed estimates under each grant, divided into items, and that every item has to be specified.

"The amounts as approved in the budget passed by the National Assembly have to be utilised for the purpose specified in the budget statement. Any re-appropriation of funds or their utilisation for some other purpose, though within the permissible limits of the budget, are not justified. In such circumstances, the supplementary budget statement has to be place before parliament following the procedure provided in articles 80 to 84 of the constitution."

The court noted that according to the order passed by the prime minister for release of the funds under the People's Works Programme-II during financial year 2012-13 the executing agencies were given discretion to use funds in accordance with their departmental procedure/rules by fulfilling the codal/legal formalities.

"Unfortunately, nothing has been done to follow the PPRA (Public Procurement Regulatory Authority) Rules," the court noted. It further observed that without prior feasibility study/report or following PPRA rules, fund allocated by the executive agencies has been used, essentially in a non-transparent manner, and PPRA rules were not followed in all the schemes i.e. 6963. The amounts approved in the budget passed by the National Assembly have to be utilised for the purpose specified in the budget statement.


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