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K.N Subba Reddy v. State Of Karnataka And Others

Karnataka High Court

Oct 15, 1992

Judgment

Subsequent
References

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Structured Summary of the Opinion

Factual and Procedural Background

The petition was filed under Article 226 of the Constitution of India in the form of a public interest application. The petitioner sought two primary directions: (i) to restrain respondent No. 1 from spending any amount towards a function scheduled for 17-10-1992, which was intended to mark the second anniversary of the assumption of office by respondent No. 2 as Chief Minister; and (ii) to direct respondent No. 1 to recover any funds already spent on that function. The petition also sought certain interim reliefs.

The matter proceeded on submissions by the petitioner's learned counsel and a reply by the learned Advocate-General. The court requested official files and materials to understand the nature of the proposed expenditure; the Advocate-General produced only one file and stated that not all materials could be provided due to paucity of time.

Legal Issues Presented

What is the nature and extent of the State's power to incur expenditure from the public exchequer, and what are the scope and limits of that power?
What is the ambit of judicial audit or judicial review in relation to executive expenditure (i.e., when may a court intervene in alleged improper or unauthorised governmental spending)?
Whether the specific expenditure proposed for the 17-10-1992 function is authorised by law or constitutes a proper "public purpose" so as to permit judicial relief (restraint or recovery of funds)?
Whether the court may order restraint on the proposed spending or direct recovery of funds already spent in the circumstances pleaded by the petitioner.

Arguments of the Parties

Petitioner's Arguments

The expenditure is being incurred solely to glorify respondent No. 2 (the Chief Minister) rather than for a public purpose.
The proposed expenditure lacks authority of law and is therefore impermissible.
The expenditure contravenes the austerity policy adopted by the Government, as disclosed in the budgetary speech of respondent No. 2.
The release of buses (as part of arrangements) would cause great public inconvenience.
The land proposed for the convention is the subject of litigation between the Government and private parties, and therefore the convention should not be held on such land.
The petitioner also relied on Article 267 of the Constitution, the Manual of Contingent Expenditure, and several judicial decisions to contend that State expenditure must be duly authorised and is justiciable when unauthorised.

Respondent / Advocate-General's Reply

The learned Advocate-General submitted that the Court's power to interfere with executive expenditure is seriously limited, as set forth in various decisions (which he referred to in detail).
When asked to furnish files and materials to clarify the nature of the expenditure, the Advocate‑General produced only one file and indicated that not all relevant materials could be produced due to paucity of time.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Laxman Moreshwar Mahurkar v. Balkrishna Jagannath Kinikar, AIR 1961 Bom 167	Confirmed a very wide discretion under Article 282 of the Constitution: it is for the State Government to decide what is a public purpose and the courts are not the proper forum to criticise executive spending decisions that the Government characterises as public purpose.	The Court relied on this authority to reinforce the principle that judicial interference in executive spending is limited and that policy and expenditure matters are primarily for the executive and legislature, not the courts.
Bira Kishore Mohanty v. State of Orissa, AIR 1975 Orissa 8	Reiterated that it is for the State to decide what is a public purpose and courts are not the forum to criticise government expenditure decisions which the executive characterises as public purpose.	Used to support the conclusion that disputes over the wisdom or propriety of governmental expenditure fall outside ordinary judicial review and should be addressed in the legislature or appropriation processes.
M.A. Ismail v. Alwaye Municipality, 1974 Tax LR 1659	Reaffirmed the principle that determining what constitutes a public purpose for spending is within the executive's domain and is not ordinarily justiciable.	The Court cited this decision as further reinforcement of the legal position limiting judicial intervention in executive financial decisions.

Court's Reasoning and Analysis

The court framed the dispute as a question about the nature and extent of the State's power of expenditure and the ambit of judicial audit. It proceeded by:

Identifying the reliefs sought (restraint on proposed expenditure and recovery of moneys already spent) and summarising the petitioner's submissions in five concrete aspects (glorification of the Chief Minister, lack of legal authority, contravention of austerity policy, public inconvenience, and disputed land).
Noting the petitioner's reliance on Article 267 of the Constitution, the Manual of Contingent Expenditure, and prior case law to argue that the State must be duly authorised to incur expenditure and that unauthorised spending may be challenged.
Receiving the Advocate-General's response that judicial powers to interfere with executive financial decisions are limited, and inviting the Advocate‑General to produce government files to clarify the nature of the proposed expenditure; the Advocate‑General produced only one incomplete file.
Reviewing authoritative judicial pronouncements (including Laxman Moreshwar Mahurkar, Bira Kishore Mohanty and M.A. Ismail) and a constitutional commentary (Basu) explaining Article 282: the court emphasised that the Constitution permits the executive to spend for purposes it deems to be for the general welfare, even if the subject matter falls outside the Legislature's specific legislative competence, so long as the purpose is a public purpose.
Drawing from these authorities, the court concluded that determining whether an expenditure is for a "public purpose" and whether it is wise or politically advisable falls primarily within the domain of the executive and legislature. The court emphasised that judicial interference is appropriate only when executive action is unconstitutional, not merely unwise or the subject of policy disagreement.
Applying those principles to the facts and the incomplete material before it, the court found that the petition amounted to criticism of the wisdom or propriety of Governmental expenditure rather than a claim of unconstitutionality or an absence of legal authority that the court could adjudicate on the available record.

The court repeatedly stressed the constitutional design whereby the executive is accountable to the legislature (Parliamentary/Westminster model), and therefore financial and policy decisions are to be primarily tested in those forums rather than by routine judicial review.

Holding and Implications

REJECTED

Holding (core ruling): The petition was dismissed. The court declined to entertain the petition and rejected the reliefs sought for restraint on the proposed expenditure and for recovery of any sums already spent.

Implications:

Direct effect: The petitioner’s request to restrain respondent No. 1 from spending on the 17-10-1992 function and to recover sums already expended was denied; the petition stands dismissed.
Doctrinal implication: The decision follows prior authorities in affirming a limited role for judicial intervention in ordinary executive spending decisions. The court reiterated that it will not substitute its view for the executive’s assessment of what constitutes a public purpose or whether a particular expenditure is wise; judicial intervention is reserved for instances of unconstitutionality.
Practical consequence: Challenges to the wisdom, propriety or policy choices embodied in governmental expenditure should ordinarily be addressed in the legislative and political fora (e.g., the legislature, appropriation processes or political accountability mechanisms) rather than by ordinary writ petitions in the courts.
No new precedent: The opinion applies and reiterates established principles from earlier decisions and commentary rather than laying down a novel rule of law.

Disposition

Petition rejected.

Show all summary ...

1. This petition is filed under Art. 226 of the Constitution of India to espouse a public cause. The petitioner is seeking for the following reliefs:

i. For a direction to restrain respondent No. 1 from spending any amount towards the function slated for 17-10-1992 to mark the second anniversary of assumption of office of Chief Minister by respondent No. 2; and

ii. For a direction to respondent No. 1 to take steps for recovery of whatever funds that has already been spent on the function slated for 17-10-1992 to mark the second anniversary of assumption of office of Chief Minister by respondent No. 2.

And to grant certain interim reliefs.

2. The learned counsel for the petitioner made submissions on five aspects, namely:

(1) that the money is spent only to glorify the second respondent;

(2) that the said expenditure is without the authority of law;

(3) that it runs contrary to the austerity policy adopted by the Government as disclosed in the budgetary speech made by the second respondent;

(4) that release of buses in the State will cause great public inconvenience; and

(5) that the land where the convention is sought to be held itself is involved in litigation between the Government and the private parties and the convention should not be held in such a land.

Reference was also made by the learned counsel for the petitioner to Art. 267 of the Constitution and the Manual of Contingent Expenditure. He relied upon several decisions of the Supreme Court and other High Courts to contend that the State in order to incur expenditure must be duly authorised and unless it is so authorised it cannot incur such expenditure. The principal submission made on behalf of the petitioner is that the convention in question is going to be held only for the benefit of the second respondent and not for the benefit of the public of the State. The learned counsel for the petitioner further urged that every action of the Government must be informed with reason and unless the action of the Government is one informed with reason and in public interest the same is liable to be struck off by the Court. However, such an issue is not before me. When there is a lis between the Government or any party or between any two parties where such parties have rights of State in distributing its largesse to any particular individual or lacks in fairness in treating all equally such questions may arise. Here the question is one relating to powers of the Government to spend money out of public exchequer for a set of purposes. Thus the question really is one on the nature and extent of power of expenditure, scope and limit thereof and the ambit of judicial audit.

3. The learned Advocate General in reply submitted that so far as this Court is concerned, there is a serious limit to the exercise of its power as set forth in various decisions and referred me to them in detail, to which I shall make reference a little later.

Thus the nature of the reliefs sought for in this case do not enure to the benefit of any particular individual as they are general in nature. No rights of any individual are involved. An analysis of the submissions made on behalf of the petitioner will reveal that what is attacked is the scope of the power of expenditure by the State in a matter of this nature.

4. The earliest case in this regard was the one in Laxman Moreshwar Mahurkar v. Balkrishna Jagannath Kinikar, AIR 1961 Bom 167. The Bombay High Court while dealing with this question and with specific reference to Art. 282 of the Constitution has stated as follows (at page 168):

“…..The powers of a State Government are much wider as would appear from Article 282 of the Constitution….. This provision confers a very wide discretion on a State Government. It is for the State Government to decide what is public purpose and what is not a public purpose….. If the Government purports to spend money for a purpose which it characterises as a public purpose though in point of fact it is not a public purpose, the proper place to criticise the action of the Government would be the legislature or the Appropriation Committee. The Courts are not the forum in which the Government's action could be sought to be criticised or restrained. Wide as the powers of the High Court are under Article 226 of the Constitution, they do not extend as far as the petitioner would like them to go. The business of governing the State is entrusted by the Constitution to the executive government. How to spend public monies is part of the executive functions of the Government and, it is not permissible to the High Court to interfere with the powers of the Government in this respect.”

In Bira Kishore Mohanty… v. State Of Orissa…Opposite Party., AIR 1975 Orissa 8, it was noticed that “it is for the State Government to decide what is a public purpose and what is not a public purpose. If the Government purports to spend money for a purpose which it characterises as a public purpose, though in point of fact it is not so, the proper place to criticise the action of the Government would be the Legislature or the Appropriation Committee. The Court shall not be the forum in which Government's action can be criticised or restrained…..”. Again this position was reiterated in M.A Ismail v. Alwaye Municipality, 1974 Tax LR 1659.

5. So far as the power of expenditure of the State is concerned, the scheme of the Constitution of India is that the power of the Union or a State Legislature is not limited to the legislative powers to incur expenditure only in respect of powers conferred upon it under the VII Schedule, but it can incur expenditure on any purpose not included within its legislature powers. However, that purpose must be public purpose. The position is elucidated in “Commentary on the Constitution of India” Volume I, at pages 1 & 2, by Basu in the following manner, with reference to American Constitution on a provision similar to Article 282 of Constitution of India:—

“It has been held that the above spending power is not restricted to the purposes with respect to which Congress has legislative power delegated to it by the Constitution, but extends to any public purpose, provided it provides for the general welfare. This, however, does not mean that the ‘spending power’ grants to Congress any legislative power to provide for ‘general welfare’. It only enables Congress to spend the revenue for a purpose of general welfare even though that subject matter does not come within its legislative competence. For instance, it enables Congress to make grants and subsidies to State Governments for agriculture, irrigation or reclamation of land, education, unemployment, highways etc., which are outside the legislative powers delegated to Congress.

This power has also been availed of to make federal grants or loans direct to municipal or local bodies or agencies subordinate to the State, e.g, to promote construction of municipal public works, or to create a corporation authorised to use federal funds for financing private debtors throughout the nation. The power to make grants has been held to include the power to impose terms and conditions as to expenditure of the moneys granted.

Courts have never sought to interfere with the Congressional determination of what is ‘general welfare’. The result is, that once the money is collected by legitimate means, there is no judicial review over the distribution or spending of that money and Congress is free to make any law authorising expenditure for any purpose that appears to it to be conducive to the ‘general welfare’. A taxpayer cannot question expenditure of the money raised by taxation on the ground that the expenditure will deplete the public funds and thus increase the burden of future taxation.”

Considering the nature of the problem raised before me, I called upon the learned Advocate-General to place the necessary files and materials before this Court to enable the Court to know the nature of the expenditure to be incurred by the State. The learned Advocate-General was able to produce only one file and it does not contain all the information on the questions raised by me. The learned Advocate-General was not able to produce all those files on account of paucity of time.

6. In the background of this analysis made by the various High Courts of the constitutional scheme on financial powers of the State, I do not think this Court is competent to go into the question as to whether the expenditure incurred by the Government is for a public purpose or not or whether it is wise or not. Our Constitution envisages that the executive is responsible to the legislature and every policy and action is subject to its scrutiny and that is in consonance with Westminster system of Parliamentary democracy. 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 good of the State. All such questions must be thrashed out in the legislature and not in Courts. The complaint of the petitioner is in the nature of criticism of the Governmental expenditure and the wisdom thereof. But as held by various Courts such an exercise can be done only in other forums and not before this Court. This Court cannot control the purse strings of the Government. Not that I approve of the expenditure to be incurred or the purpose for which it is incurred is in the interests of public. If such questions are allowed to be raised before Courts every expenditure of the State can be called in question both as to the nature and extent thereof in which event the functioning of the Government itself will be hampered. In that view of the matter, I decline to entertain this petition. Petition is rejected.