Summary
A sewer contractor sought release of Central funding after undertaking work awarded by a municipality. The Court held that interdepartmental correspondence seeking Finance Ministry concurrence did not establish approval or an enforceable claim to those funds. It nevertheless directed the State to address funding for the sewer scheme, recognising the urban need and prior project approvals.
Issues
- Whether project approval and an interdepartmental request for funds entitled the contractor to compel Central disbursement.
Held
- The municipality awarded the contract without sanctioned Central funds. Approval by the State committee and the Urban Development Ministry did not replace the missing Finance Ministry approval; the contractor could not claim payment from the Union on the strength of correspondence seeking that approval. (¶¶ 7, 8)
- Allocation must account for available funds and competing local-body requirements. Given the necessity of sewer infrastructure and the earlier project approvals, the State was directed to consider the scheme under its own programme and seek Central assistance if unable to fund it under its policy. (¶ 9)
Result
The appeal was disposed of. The State was directed to take necessary action within three months for approval under its scheme and, if unable to provide funds under its policy, seek AMRUT assistance. The Court expressed the expectation that the Centre would decide appropriately within three months thereafter. It found no illegality in the High Court’s refusal to compel the original disbursement.