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Supreme Court Cracks Down: CBI to Probe Arunachal's Shadowy Contract Awards to CM's Kin
In a landmark ruling emphasizing transparency in public spending, the on , directed the to launch a preliminary inquiry into allegations of favoritism and irregularities in public works contracts in Arunachal Pradesh. The bench, led by Justice Vikram Nath (authoring the judgment), alongside Justices Sandeep Mehta and N.V. Anjaria , sided with petitioners Save Mon Region Federation and Joddik Tali , ordering a time-bound probe into awards allegedly favoring relatives of Chief Minister Pema Khandu (Respondent No. 4), including firms linked to his spouse ( M/s Brand Eagles ) and nephew Tsering Tashi ( M/s Alliance Trading Co. ). Petitioners claimed contracts worth over ₹1,270 crores bypassed competitive bidding.
From Audit Red Flags to Courtroom Battle
The saga began with a public interest writ petition under , spotlighting systemic issues in Arunachal's public procurement from . Petitioners highlighted a pattern of non-tender work orders, missing vouchers, and awards to entities tied to the CM, his family (Respondents 5 and 6), and associates—especially in Tawang district. This built on a related PIL (SLP (C) No. 34696/ , Voluntary Arunachal Sena v. State of Arunachal Pradesh ), where the Supreme Court earlier mandated a audit. The CAG's , report—filed in these proceedings—flagged multiple lapses: no-tender executions, absent comparative statements, and unproduced vouchers worth crores (e.g., ₹12.24 crores in one road project).
Key questions: Do repeated non-competitive awards, record gaps, and alleged nepotism warrant a CBI probe? Can states justify bypassing tenders via local laws without scrutiny? Does a "minuscule" share of tainted contracts excuse breaches?
Petitioners' Blitz: Nepotism and Opaque Deals
Represented by senior advocate
, petitioners painted a damning picture of
"arbitrariness, favouritism, and abuse of office."
They listed works across departments (Power, Rural Works, PWD) awarded sans open tenders, disproportionately to CM-linked firms. CAG findings bolstered their case: no reasons for skipping tenders, missing docs disabling audit probes, and untraced expenditures. They dismissed physical verifications as irrelevant to process flaws, arguing state machinery couldn't impartially investigate high officials.
State's Deflections: Stats, Geography, and 'Normal Practice'
Arunachal Pradesh countered that work orders for sub-₹50 lakh jobs are legal under the ( ) , suited to remote terrain. They furnished department-wise data claiming tainted awards were "minuscule" (e.g., 0.32% tenders in Power Dept., 0.07% work orders). CAG scrutiny belongs to legislature, they urged, insisting petitioners lacked "explicit proof" and most works followed tenders.
Decoding : No 'Small Breach' Exception in Public Purse
The Court invoked precedents like State of W.B. v. Committee for Protection of Democratic Rights ( ) to affirm restrained yet potent power for CBI probes in exceptional cases—high officials implicated, credibility fears, national ramifications. Sachidanand Pandey v. State of W.B. (1987) reinforced tenders as public interest safeguard; departures demand recorded reasons. Akhil Bhartiya Upbhokta Congress v. State of M.P. (2011) and Centre for Public Interest Litigation v. Union of India (2012) stressed non-arbitrary largesse distribution.
Crucially, the bench rejected percentage defenses: constitutional violations aren't "diluted by statistics." Missing records triggered against the State as custodian. CAG gaps—non-tender repeats, absent vouchers—signaled deeper issues beyond audit scope, necessitating criminal lens for money trails, ownership links.
Key Observations: Court's Blunt Warnings
"Ain public contracting is not diluted by statistics. Even a single instance, if established, undermines equality, theand public confidence in fair administration."
"The State is the custodian of public records, and it is expected to maintain them in a manner that makes public expenditure traceable and accountable. When material records that ought to exist are not produced, the Court is not required to treat that circumstance as innocuous."
"Repeated resort to non-tender methods... repeated absence of recorded reasons... and repeated non-production of vouchers... raise legitimate concerns not merely of administrative irregularity but of possible."
CBI Greenlight: Probe Ordered, State Placed on Notice
The Court mandated CBI to register a preliminary enquiry within two weeks, investigating contracts (extendable for links). Focus: procurement trails, tender waivers, records custody, fund flows, related-party ties. State must furnish all docs within four weeks, appoint nodal officers, preserve records. CBI status report due in 16 weeks.
This sets precedent: isolated tainted awards pierce ; state audits don't preempt judicial probes into high-stakes graft. For Arunachal, it promises accountability; nationally, it fortifies procurement guardrails amid rising nepotism claims ( ).
