The Madras High Court has ruled that Government and district administration has the right to keep a check on spending of public money from the panchayat funds.
Justices V Ramasubramanian and N Kirubakaran said when the office bearers were misusing the funds, the administration had a right to check them.
If the funds were misappropriated, then the argument that the panchayat's autonomy could not be belittled was by such checks was invalid, the judges said.
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The manner in which the panchayat funds were being misused raised questions as to whether any such autonomy existed at all and as to how such autonomy was used and misused, the judges said this while dismissing a PIL seeking a direction to Director of Rural Development and Panchayat Raj to deposit the seigniorage fee into the account operated by Presidents and vice presidents.
The Judges said as per the government regulations every panchayat must maintain three bank accounts of which the first could be operated by the Presidents and vice presidents, while the third required the clearance of the Block development officer.
The judges said though the act says that the government should deposit the seiniorage fee collected by the panchayat into the village panchayat fund, the fund account need not be the one operated by the president and vice president.
The Act speaks only of two types of funds for a panchayat union and only one type of fund for a village panchayat, the judges said.
They said Section 188 (2) empowered the government to create additional funds in village panchayats.
"The power under the section is not merely to constitute separate funds but also prescribes the amounts which should be credited to such funds and the manner of application of those funds," the judges said.
T.T.C. Cheran, former member of Tiruchi District Panchayat, had filed the PIL petition seeking to deposite the seiniorage fee to the first account operated by presidents and vice presidents.
