Shimla, Jul 10 The Himachal Pradesh High Court has granted interim stay on two notifications issued by the state government pertaining to diversion of a portion of Local Area Development Fund (LADF) for providing financial assistance to orphans.
The stay was granted on Thursday and the orders were made available on Friday.
A division bench of Chief Justice GS Sandhawalia and Justice Bipin Chander Negi granted the stay on Thursday on a petition filed by BJP MLA from Bharmour constituency Janak Raj.
The plea maintained diverting the funds violated the Swaran Jayanti Energy Policy, 2021, under which the LADF has been created exclusively to address the developmental needs of communities affected by hydroelectric projects and to promote a sense of ownership among local residents.
Prima facie accepting the contention of the petitioner, the bench observed that the twin notifications did not indicate that the diverted funds would be utilised for the welfare of orphans belonging to the hydro project-affected areas concerned.
The notifications issued on September 23, 2025, and March 18, 2026, earmarked diversion of 10 per cent and subsequently 40 per cent of the total LADF collected respectively to the Social Justice and Empowerment Department for providing assistance to orphans.
Under the policy, it was mandatory for the hydro project developers to contribute 1.5 per cent of the final project cost of projects with a capacity exceeding 5 MW and one per cent for projects of up to 5 MW towards the LADF.
The policy unambiguously stated that the LADF would be utilised for specific purposes including local infrastructure development at the panchayat, block and district levels and included construction of internal village roads, drinking water schemes, street lighting, sanitation facilities, schools, health centres, hospitals, colleges and other public infrastructure in the project-affected areas.
The petitioner also contended that the state government had no authority to divert funds earmarked for specific local development purposes to a separate welfare scheme unrelated to the objectives of the policy.
Keeping in view the argument raised and the fact that the said notifications don't show that the amount is to be utilised for the orphan in the area concerned, we are constrained to stay both the notifications, the bench said while granting the interim stay.
