Authorities Cannot Withhold Funds for Undisputed Development Works Due to Pending Vertification of Separate Disputed Projects.

The petitioners, public representatives of Janpad Panchayat Sarangarh, sought a direction for the release of developmental funds sanctioned for the financial year 2023–2024

The funds, amounting to approximately ₹6.14 crores, were allocated from mining royalties and approved by the General Body on 21.06.2024, subsequently receiving the Collector's approval on 26.09.2024

Out of 99 proposed works, the respondent authorities stalled the entire fund release, raising objections only against 28 works on the grounds that the sites were recorded as "Chhote Jhad Ka Jungle" (forest land)

The petitioners moved the High Court seeking the release of funds for the remaining 71 undisputed works

1. Whether the respondent authorities are justified in withholding funds for undisputed development projects due to pending verification of a separate set of disputed projects

2. Whether a direction can be issued to the respondent authorities to release sanctioned funds in a time-bound manner

The Court applied the principles of administrative fairness and non-arbitrariness under Article 14 of the Constitution of India, emphasizing that state actions must not be arbitrary or illegal

It relied on the state’s own procedural mandates regarding the timely release of development funds and the statutory authority of the Collector to approve such proposals

Furthermore, the court looked at the evidentiary value of the respondents' own admissions in their return/reply regarding the lack of dispute over specific projects

The Court examined the material on record, specifically Paragraphs 7 and 8 of the respondents' return, which admitted that out of 99 works, 71 faced no objection while 28 required revenue verification

The Court reasoned that once the competent authority (the Collector) had approved the proposal and the respondents themselves conceded that 71 works were clear of impediments, there was no legal or administrative justification for withholding the entire corpus of funds

The Court found the blanket suspension of funds to be an impediment to developmental activities and directed that the undisputed portion must be processed independently of the 28 projects pending forest land verification

The Court held that withholding the entire amount was unjustified and ordered the authorities to complete the exercise strictly in accordance with the law within 90 days from the date of receipt of the order