Saubhagya Scheme Irregularities: J&K&L High Court Quashes Further Probe Against Officials After No Criminal Misconduct Found

The Court has accordingly restored the ACB's closure report in respect of the petitioners while observing,

“However, this order shall not be construed as granting of any permission for release of any amounts in relation to the execution of the scheme. Any such release, shall be regulated by the law governing the field”

The Court was hearing petitions under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, challenging the order passed by the Special Judge, Anti-Corruption, Jammu, who had rejected the ACB's final closure report in an FIR and directed further investigation.

The FIR concerned alleged irregularities in the implementation of the SAUBHAGYA Scheme in District Doda, with the investigation subsequently extended to other districts.

A Single Bench of Justice Mohd. Yousuf Wani observed,

“The investigation conducted by the ACB Jammu, culminating in the filing of the closure report… followed by the RDA conducted by the Government, Power Development Department, and the simultaneous third-party inspection/audit of the works executed under the Saubhagya Scheme… exonerates the petitioners from the accusation of commission of criminal misconduct or any conspiracy.”

The SAUBHAGYA Scheme was launched to provide electricity connections to every un-electrified household in rural and urban areas of Jammu & Kashmir. Rural Electrification Corporation Limited was nominated as the nodal agency, with beneficiaries identified through the 2011 Socio Economic Caste Census. The scheme was completed in March 2019.

Following a preliminary enquiry into alleged irregularities, the ACB registered one FIR concerning Ganderbal and another FIR concerning Doda. The investigation was subsequently extended to other districts. Both ACB units eventually filed closure reports before the respective Special Courts.

In the Doda case, the investigating officer concluded that the allegations were “Not Proved” against the petitioners. However, the investigation found that certain officers had committed procedural lapses by not following the SAUBHAGYA guidelines and recommended Regular Departmental Action against them.

The investigation also recorded different findings in other districts. In Ganderbal, deficient specifications and poor workmanship were found during physical inspection, resulting in a loss of Rs. 1.40 lakh in four subdivisions. In Anantnag, diversion of SAUBHAGYA material to other schemes was found to have been contrary to the applicable guidelines, though the diversion had subsequently been regularised by the State Level Standing Committee.

The ACB thereafter recommended departmental action in certain cases, including against officers who had failed to execute works strictly according to the SAUBHAGYA guidelines and against a consultancy agency in relation to poor workmanship and contractual deficiencies.

The Government subsequently conducted Regular Departmental Action, while third-party inspections of the works were also carried out. A Government recorded that there was no material evidence of wilful wrongdoing by the officials, that the omissions and commissions pointed out by the ACB had been explained after verification, and that third-party inspection showed no deficiency in execution of the works. The Government accordingly closed the departmental proceedings against the officials.

Court's Observation

The Court noted that the two FIR's were split cases concerning the same set of allegations. While the ACB Srinagar's closure report was accepted by the Special Court at Srinagar, the Special Court at Jammu rejected the closure report and directed further investigation.

The Court found that the ACB investigation had concluded that the petitioners were not criminally liable, although certain procedural violations of the scheme's guidelines had been noticed. The ACB had consequently recommended departmental action rather than criminal prosecution against them.

The Court further took note of the subsequent departmental proceedings and Government-ordered third-party inspections. It found that these proceedings, along with the ACB investigation, had exonerated the petitioners from allegations of criminal misconduct and conspiracy, while the procedural violations identified by the ACB had been dealt with through the departmental process.

The Court also noted that the Government had recorded that third-party inspections conducted by the Government of India showed no deficiency in execution of the works and that the closure statements had been audited and accepted by the Government of India.

“That the Government of India has conducted third-party inspections of the works executed under the Saubhagya Scheme, along with other Central Sector Schemes, in each district which stand uploaded on the Sakshya Portal and is in the public domain, showing no deficiency in the execution of the works, which, in substance, were executed satisfactorily as per the DPRs”, the court remarked.

Examining the order of the Special Court, the High Court found that it had “the apparent trappings of a reinvestigation order”. The Special Court, while directing further investigation, had referred to the agencies involved as being criminally liable for alleged misappropriation of public money, use of false evidence and criminal conspiracy.

The Court observed that the petitioners had already undergone the preliminary inquiry, criminal investigation, departmental proceedings and Central Government-ordered inspections and audits. It therefore found the case fit for exercise of its inherent jurisdiction under Section 528 BNSS.

“…The present petitioners have already suffered the brunt of the investigation, which commenced in Case FIR w.e.f. 05.03.2020…Even after the conclusion of the investigation, which culminated in a finding of 'Not proved', they were again associated with proceedings during the departmental action as well as the Central Government-ordered inspections and audits”, opined Justice Wani.

The Court also noted that the Special Court's concerns regarding allegations of “double drawals” had, on examination of the ACB closure report, already been addressed during the investigation. It further took note of the Special Court at Srinagar's finding that allegations concerning double drawal, loss to the State exchequer and exorbitant rates had not been established in the corresponding case.

Accordingly, the Court allowed the petitions and set aside the Special Judge, Anti-Corruption, Jammu's order directing further investigation

Case Title: Manhar Gupta and Others v. Union Territory of Jammu & Kashmir and Others

Citation: 2026 LiveLaw (JKL) 449

Appearances:

For Petitioner: Radha Sharma, Advocate
 Sunil Sethi, Senior Advocate
 Paras Sharma

For Respondents: Advocate 
Raman Sharma, Additional Advocate General
 Saliqa Sheikh, Advocate

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