State Cannot Divest Administrators of Financial Powers Via Administrative Order: Rajasthan HC

The Rajasthan High Court has clarified that the State Government cannot bypass statutory frameworks to centralize financial authority through executive orders, emphasizing that 'giving an opportunity' for hearing under Article 226(3) of the Constitution of India is not dependent on a party's choice to actually avail it.

Justice Sanjeet Purohit, while hearing an application to vacate an interim stay, dealt with the interplay between executive delegation and the statutory checks and balances governing municipal bodies. The court dismissed the State's challenge to the maintainability of the petition and upheld the stay on an administrative order that sought to delegate exclusive financial powers to Executive Officers.

Interpretation of Article 226(3): Giving Opportunity vs. Availing Opportunity

The Court first addressed a critical procedural question regarding whether an application for vacation of stay under Article 226(3) is maintainable when a party chooses not to appear despite notice.

The Court, in its reasoning, observed: "The expression 'without giving such party an opportunity of being heard' cannot be equated or construed as 'actual availing of such opportunity or participation in hearing'. The intent behind the said Article is to ensure grant of an effective opportunity to be heard and the same cannot be made dependent upon availing of such opportunity by the concerned party at his convenience or sweet will. Once such opportunity is duly given by the Court, the constitutional requirement stands satisfied, and a party cannot, by its own absence or default, render the interim order amenable / vulnerable under Article 226(3)."

Citing the precedent in Vinayakrao S. Desai Versus Interlink Petroleum Ltd. & Ors, the Court held that if copies of the petition are furnished and opportunity is granted, the order is deemed to be passed after a bi-parte hearing, even if the respondent stays absent.

Court Directions

The Court has the following directions:

"In view of discussion made herein above, this Court is of the considered opinion that looking to facts of present case, the instant application filed by the respondents under Article 226(3) for vacation of interim order is not maintainable... This Court finds no ground to interfere with the interim order dated 29.04.2026. The stay petition deserves to be and is hereby allowed. Interim order dated 29.04.2026 is made absolute till final disposal of the writ petition. Admit... the matter is directed to be listed for 'final disposal' in first week of August, 2026."

Background: Dispute Over Delegation of Municipal Financial Powers

Statutory Framework and Administrative Overreach

The dispute arose when the State Government issued an administrative order on 07.02.2026. This order, purportedly acting under Section 326 of the Municipalities Act, 2009, delegated financial powers under Rule 7 of the Rajasthan Municipalities (Budget and Accounts) Rules, 1963 and Rule 14 of the Rajasthan Municipalities (Purchase of Materials and Contracts) Rules, 1974 exclusively to the Executive Officers (EO).

The petitioner, a former councillor, argued that Rule 7 of the Rajasthan Municipalities (Budget and Accounts) Rules, 1963 requires cheques to be signed jointly by the Chairman/Administrator and the EO. He contended that centralizing this power in one authority dilutes financial checks and balances and violates the Municipalities Act, 2009, as Section 326 excludes the delegation of powers related to the dissolution of municipalities under Section 322.

The State's Justification and the Court's Rejection

The State argued that the appointment of the Administrator was under Section 320 (relating to new municipalities) and not Section 322, relying on Madhu Kanwar v. State of Rajasthan ( "S.B. Civil Writ Petition No. 2707/2025": 2023 CaseBase(RAJ) 12168). They further cited administrative convenience, noting that District Collectors acting as Administrators cannot sign every municipal cheque.

However, the Court found that since the Municipal Board was dissolved after its tenure, Section 322 of the Municipalities Act, 2009 applied, making the exclusion in Section 326 relevant. The Court noted that administrative convenience cannot override the Constitution of India vision of democratic local governance. It held that the State failed to show any statutory provision allowing the divesting of the Administrator's joint financial authority.

Case Details:
Case No.: S.B. Civil Writ Petition No. 3848/2026
NeutralCitation: [2026:RJ-JD:26988]
Case Title: Bharat Kumar Choudhary Vs. State of Rajasthan & Others
Appearances:
For the Petitioner(s): Mr. Divik Mathur
For the Respondent(s): Mr. Rajesh Panwar, AAG & Sr. Adv. Assisted by Mr. Monal Chugh

Source: 2026 CaseBase(RAJ) 56