SAVE MON REGION FEDERATION v. THE STATE OF ARUNACHAL PRADESH
Supreme Court Directs CBI Preliminary Enquiry into Arunachal Pradesh Public Works Contracts Alleging Nepotism, Conflict of Interest, and Systemic Departures from Competitive Tendering Norms.
Court: Supreme Court of India
Citation: 2026 INSC 320
Decision Date: 06-04-2026
List of Laws
Constitution of India, Article 14; Constitution of India, Article 32; Administrative Law - Public Procurement and Transparency; The Arunachal Pradesh District Based Entrepreneurs and Professionals (Incentives, Development and Promotional) Act, 2015; Judicial Review of State Largesse
- Facts: The petitioners, a civil society organization, filed a public interest litigation alleging systemic corruption, nepotism, and arbitrariness in the award of public works contracts in Arunachal Pradesh between 2015 and 2025. They specifically alleged that contracts were preferentially awarded to firms connected to the Chief Minister and other high-ranking officials (Respondent Nos. 4 to 6) without competitive bidding. A report by the Comptroller and Auditor General (CAG) corroborated several procedural lapses, including the execution of works through "work orders" instead of tenders, missing vouchers for crores of rupees, and an absence of contemporaneous records to justify dispensing with open competition. The State defended these practices by citing local socio-economic conditions and the Arunachal Pradesh Act of 2015, arguing that the share of contracts awarded to the implicated respondents was statistically miniscule.
- Procedural Posture: This matter reached the Supreme Court of India via a Writ Petition filed under Article 32 of the Constitution of India, seeking the constitution of a Special Investigation Team (SIT) or a Court-monitored investigation by the Central Bureau of Investigation (CBI).
- Issue: Whether the allegations of systemic arbitrariness, conflict of interest, and lack of transparency in public procurement, supported by prima facie evidence of missing records and audit objections, warrant an independent investigation by the CBI under the Court's extraordinary jurisdiction.
- Holding: Yes. The Court held that the recurring deficiencies in the procurement record and the high constitutional status of the persons implicated necessitated an investigation by an institutionally independent agency to preserve public confidence in the rule of law.
- Reasoning: The Court reasoned that the State acts as a trustee of public resources and must adhere to Article 14, ensuring transparency and fairness in contracts. While the power to direct a CBI probe is exercised sparingly, it is justified when "high public functionaries are implicated" and the ordinary State machinery may not inspire confidence. The Court rejected the State's "percentage argument", noting that even a single instance of nepotism is an affront to the Constitution. It further held that the State, as the custodian of records, cannot shift the burden of proof to petitioners when those very records (vouchers, tender files) are missing. A CAG audit, while helpful, cannot substitute a criminal investigation as it lacks powers of search, seizure, and tracing beneficial ownership.
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