Article 267 of the Costitution of India with Case law
Article 267 of the Constitution of India
— Contingency Fund
📜 Text of Article 267:
(1) Parliament may by law establish a Contingency Fund of India, into which shall be paid from time to time such sums as may be determined by law, and the Fund shall be placed at the disposal of the President to make advances to meet unforeseen expenditure pending its authorization by Parliament.
(2) The Legislature of a State may by law establish a Contingency Fund of the State, into which shall be paid from time to time such sums as may be determined by law, and the fund shall be placed at the disposal of the Governor of the State to make advances to meet unforeseen expenditure pending authorization by the State Legislature.
🧾 Essence of Article 267:
| Element | Article 267(1) | Article 267(2) |
|---|---|---|
| Fund Name | Contingency Fund of India | Contingency Fund of the State |
| Established By | Parliament | State Legislature |
| At Disposal Of | President of India | Governor of the State |
| Purpose | To meet urgent unforeseen expenses | Same as Central Fund, but at State level |
| Subject To Authorization | Yes, by Parliament (post-facto) | Yes, by State Legislature |
💼 Purpose of Contingency Fund:
Used for urgent and unforeseen expenses like:
Natural disasters (floods, earthquakes)
Health emergencies (pandemics)
Sudden security concerns
Interim arrangements where expenditure cannot wait for formal legislative approval
🏦 Statutory Framework:
Central Level:
The Contingency Fund of India Act, 1950 provides the structure and operational mechanism.
Amount in Fund:
As of recent amendments, the authorized amount in the Contingency Fund of India is ₹30,000 crore (raised from ₹500 crore during COVID-19 in 2021).
State Funds:
Most states have separate Contingency Fund Acts, varying from ₹50 crore to ₹500 crore depending on the state.
⚖️ Important Case Law Related to Article 267:
🧑⚖️ 1. R. K. Garg v. Union of India (1981)
Citation: AIR 1981 SC 2138
Though not directly on Article 267, it upheld the constitutionality of emergency financial legislation, emphasizing that financial powers must align with constitutional mechanisms like Article 267 when dealing with unforeseen expenditures.
🧑⚖️ 2. M.P. Oil Extraction v. State of M.P. (1997)
Citation: (1997) 7 SCC 592
Reiterated that State financial decisions must comply with constitutional safeguards, including proper use of funds and post-facto legislative approval, as implied by Article 267(2).
🧑⚖️ 3. Centre for Public Interest Litigation v. Union of India (2021)
Context: Discussed during COVID-19 response measures and raising of the Contingency Fund.
Concern Raised: Government bypassing legislative scrutiny.
Importance: Accountability and transparency in using Article 267 funds is a constitutional obligation.
✅ Key Takeaways:
| Topic | Details |
|---|---|
| Fund Control | Central: President; State: Governor |
| Used For | Urgent, unforeseen expenses (e.g., disaster relief) |
| Requires Approval | Yes, by Parliament or State Legislature afterwards |
| Legal Limitations | Must be authorized by law; not discretionary usage |
| Constitutional Purpose | Ensures flexibility while upholding accountability |
🔍 How It Works – Step by Step (Central Example):
Urgent need arises (e.g., pandemic outbreak)
Government draws funds from the Contingency Fund of India
President authorizes advance withdrawal
Government later presents the expense to Parliament for regularization
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