New Delhi, April 6 The Supreme Court on Monday directed the CBI to register within two weeks a preliminary inquiry into allegations of preferential awarding of contracts for public works in Arunachal Pradesh to firms allegedly owned or related to the family members of Chief Minister Pema Khandu.
The apex court said that the State and its agencies cannot grant benefits based on the "whims" of any political or administrative official, and that an "independent investigation" is necessary in this case.
A bench headed by Justice Vikram Nath said that an investigation must be fair, and that the CBI should register a preliminary inquiry immediately. The inquiry should cover the awarding and execution of public works contracts and work orders, which are the subject of this petition and the affidavits filed in these proceedings.
During the hearing, the apex court was told that government contracts and work orders worth around Rs 1,270 crore were awarded in Arunachal Pradesh to four firms related to Khandu's family members in the last 10 years.
The bench said that the preliminary inquiry and any subsequent investigation should cover the awarding and execution of public works contracts and work orders in Arunachal Pradesh from January 1, 2015, to December 31, 2025, including the records and documents presented before the court.
The bench delivered its verdict on a petition filed by NGOs Save Mon Region Federation and Voluntary Arunachal Sena, seeking a CBI or SIT probe into the matter.
The bench said that the records show repeated use of non-tender methods, repeated absence of reasons for dispensing with competition, and repeated failure to provide vouchers and tender-related documentation for projects of significant value.
The bench said that these circumstances raise legitimate concerns not only of administrative irregularity, but also of "possible abuse of public office", manipulation of procurement processes, and concealment or destruction of official records.
The bench noted that the petitioners have alleged that a significant number of these awards have accrued to respondents numbers four to six (Pema Khandu, Rinchin Drema, and Tsering Tashi), or to firms and individuals related to them, raising serious questions about conflict of interest and abuse of public office.
The bench said that these issues require a structured investigation into the decision-making process, the selection of contractors, the justification for deviations from tender-based procurement, and the integrity and custody of public records.
Pema Khandu was made a party respondent in the PIL. His father Dorjee Khandu's second wife Rinchin Drema and his nephew Tsering Tashi were also made parties to the case.
The bench said that the credibility of the process is as important as its eventual outcome.
The investigation should include examining the procurement process, the reasons and approvals for dispensing with tender, the identity of the beneficial owners of the contractor entities, and any other related matter necessary to determine whether any illegality or cognizable offence is disclosed.
The CBI should, in particular, examine awards made to respondents number four to six and to firms or individuals related to them, and should examine the procurement process, reasons and approvals for dispensing with open tender, compliance with applicable statutory requirements, availability and custody of records, flow of funds and payments, and such other connected aspects.
"The CBI shall not be precluded from examining transactions outside the above period to the limited extent necessary for tracing beneficial ownership, related-party links, fund flows or other connected circumstances that bear upon the transactions within the above period," it said.
The bench said that Arunachal Pradesh and all its concerned departments, authorities, and instrumentalities shall fully cooperate with the CBI.
They shall, within four weeks, make available relevant records, including sanction orders, administrative approvals, technical sanctions, tenders, comparative statements, tender committee records, work orders, and all electronic data relating to e-procurement and payments.
The bench directed the chief secretary of Arunachal Pradesh to designate within a week a nodal officer for coordination with the CBI.
"The State of Arunachal Pradesh shall ensure that no record, physical or electronic, relevant to the subject matter of the enquiry and investigation is destroyed, altered or rendered inaccessible," the bench said.
It said the chief secretary shall issue necessary directions to all concerned departments within a week to secure the preservation of records and electronic logs.
The CBI was directed to file a status report within 16 weeks.
"We clarify that the observations made in this judgment are for the purposes of deciding whether an independent investigation is warranted," it said.