Puducherry Chief Minister V Narayanasamy today alleged that Lt Governor Kiran Bedi "violated" rules in mobilisation of Corporate Social Responsibility (CSR) funds.
However, former IPS officer Kiran Bedi has termed the charges "wild allegations".
Mr Narayanasamy has demanded a judicial probe into the modalities adopted by the Lt Governor in getting the financial assistance.
The chief minister alleged that Ms Bedi was skipping the committee formed for raising funds under the CSR scheme from private companies.
"There is a Himalayan corruption which should be probed by the Centre," Mr Narayanasamy said.
The chief minister questioned the authority of Ms Bedi over assigning desilting work under nomination pattern to fix contractors, which he claimed was against the guidelines of Central Vigilance Commission.
"Everything would become clear if the home ministry conducted a judicial probe into the modalities the Lt Governor is adopting in raising funds and utilising them," he said.
Later at a press meet, the Lt Governor said, "The chief minister is making wild allegations. There is no financial transaction at all in Raj Nivas. Desilting of water channels is being done by donors with the help of machinery provided for 86 km of 23 channels which could have cost the governor more than Rs 10 crore."
"It is done by community without any cost to the government. The chief minister does not believe that people could be served by government officers without any financial transaction," she said, adding that Mr Narayanasamy has not "experienced such abundant community support for government work."