A bench of Chief Justice R Subhash Reddy and Justice V M Pancholi asked the government to file its reply by the next hearing on Wednesday of the plea by Congress MLA from Anklav constituency in Anand district, Amit Chavda and four others.
The plea by the Congress MLA has also listed Union Textiles and Information and Broadcasting Minister Irani, the Union and the state governments, Anand district collector and district development officer among the respondents.
On the basis of an audit report of the Comptroller and Auditor General, the petitioner alleged that Irani was involved in "corruption and misuse of funds in collusion with other state and non-state actors."
It said that the implementing agency for her MP Local Area Development Scheme (MPLADS), Gujarat State Rural Development Corporation (GSRDCL), continued to receive funds even after it was closed down by the government in August 2015.
An MP receives Rs 5 crore annually as MPLAD which is released directly to the district authority of the nodal district of the MP.
The MPLADS guidelines prohibit MP to select implementing agency and the task is given to the district authority, it said, but the District Planning Officer had replied to the audit officer that works were awarded to SSMKSM "as per instruction received from Irani's PA over phone."
GSRDCL received Rs 23.5 lakh to construct 'Panchayat Bhavan' even after being declared defunct, it said.
"MPLADS guidelines prohibit such an activity, as MPLADS are meant for creating durable assets and for utilities meant for direct public use," it said.
Anand district collector had written a letter dated June 20, 2017 to deputy secretary of GAD pointing out irregularities and fraud being committed under the grants received under MPLAD fund, it said.
It sought court's direction for "high level committee to investigate into the subject matter and to the DGP to file FIR and recover misappropriated money.
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