Supreme Court Orders CBI Preliminary Inquiry Into Allotment Of Contracts To Arunachal CM Pema Khandu's Kin
The Supreme Court today(April 6) directed the Central Bureau of Investigation (CBI) to conduct a preliminary inquiry into the alleged irregular allotment of public contracts by the Arunachal Pradesh Government to companies owned by relatives of Arunachal Pradesh Chief Minister Pema Khandu.The Court has directed the CBI to submit a report within 16 weeks as to whether an independent...
The Supreme Court today(April 6) directed the Central Bureau of Investigation (CBI) to conduct a preliminary inquiry into the alleged irregular allotment of public contracts by the Arunachal Pradesh Government to companies owned by relatives of Arunachal Pradesh Chief Minister Pema Khandu.
The Court has directed the CBI to submit a report within 16 weeks as to whether an independent investigation is warranted. The CBI is directed to examine contracts awarded from January 1, 2015, to December 31, 2025. The CBI shall, however, not be precluded from examining the work contracts beyond the above period.
"Having regard to the principles set out above and the material placed on record, we are satisfied that this is a fit case where an independent investigation is necessary. The record discloses repeated resort to non-tender methods in relation to public works, repeated absence of recorded reasons explaining why competition was dispensed with, and repeated nonproduction of vouchers and tender-related documentation in relation to projects of substantial value. Such circumstances raise legitimate concerns not merely of administrative irregularity but of possible abuse of public office, manipulation of procurement processes, and concealment or destruction of official records, matters which require investigation by an independent agency vested with statutory powers of criminal investigation."
A bench comprising Justice Vikram Nath, Justice Sandeep Mehta, and Justice NV Anjaria passed the order in a petition filed by the organisations, Save Mon Region Federation and Voluntary Arunachal Senaa. Senior Advocate Prashant Bhushan appeared for the petitioner.
The Court has also directed the State and its concerned department to cooperate with the CBI and shall make available all relevant records within four weeks. It shall ensure that no record is destroyed. Further, the Chief Secretary of the State shall designate a nodal officer within a week for coordination with the CBI.
The petitioners have alleged that contracts and tenders of the State have been awarded to firms associated with the Chief Minister, his spouse, mother, and nephew. Bhushan, for the petitioners, alleged that contracts worth Rs 1270 crores were illegally allotted to the CM's kin.
The petitioners approached the Court in 2024, alleging partiality in the giving away of key tenders to close associates of Khandu, including the construction company 'M/s Brand Eagles' (belonging to his spouse). It was further claimed that Pema's nephew, Tsering Tashi, an MLA from Tawang District owning M/s Alliance Trading Co., was awarded work contracts without following due procedure. The petition prayed for an investigation into the matter either by the Central Bureau of Investigation or an SIT.
Notice was issued to the respondents in January, 2024. In March 2025, the Court sought detailed responses from the Ministry of Home Affairs, the Ministry of Finance and the state government with respect to the parties that awarded public work tenders and the manner in which the same were awarded.
Notably, in 2024, a report was called from the Comptroller and Auditor General in another case pertaining to Khandu's father, Dorjee Khandu, who was also accused of giving important public works contracts to his family companies. While hearing the present case in March last year, then CJI Sanjiv Khanna noted that the CAG report cited the Code of Conduct laid down by MHA for both Union and States' Ministers, which should be followed on entering the office. As per the said Code, no minister can give undue advantage to his or her relatives.
Also from the judgment- Even Single Instance Of Award Of Public Work Through Tainted Process Violates Article 14 : Supreme Court
Headnote
Constitution of India – Article 14 and Article 32 – Public Procurement – Transparency and Accountability – Facts – Petitioners alleged systemic nepotism and corruption in Arunachal Pradesh, asserting that public works were awarded to firms related to the Chief Minister and other high officials without open tenders - CAG report identified missing vouchers worth crores and repeated execution of works without tenders - The State holds public resources as a trustee on behalf of the people - Award of public contracts and execution of works must be transparent, fair, and free from arbitrariness or undisclosed conflicts of interest – Extraordinary power under Article 32 to transfer investigation to the CBI must be exercised sparingly and in exceptional situations - Such transfer is justified where high officials are involved, where the investigation by State machinery lacks credibility, or to instil public confidence in the rule of law.
Administrative Law – Departure from Competitive Tendering – Requirement of Reasons – While competitive tendering is the ordinary method to secure public interest, any departure must be justified by rational and recorded reasons - Non production of core records like tender documents and vouchers by the State is a serious concern, as the State is the custodian of public records - Physical execution of work does not validate an unconstitutional or arbitrary procurement process - Held – Supreme Court directed the CBI to register a preliminary enquiry into the award of public works in Arunachal Pradesh from 01.01.2015 to 31.12.2025 - Observed that missing records and allegations against high constitutional functionaries warrant an investigation by an agency institutionally independent of the State executive. [Relied on State of W.B. v. Committee for Protection of Democratic Rights (2010) 3 SCC 571; Sachidanand Pandey v. State of W.B. (1987) 2 SCC 295; Akhil Bhartiya Upbhokta Congress v. State of M.P. (2011) 5 SCC 29; Centre for Public Interest Litigation v. Union of India (2012) 3 SCC 1; Paras 12-18, 25-30, 33-44]
Case Title: Save Mon Region Federation And Anr v. The State Of Arunachal Pradesh And Ors., W.P.(C) No. 54/2024
Citation : 2026 LiveLaw (SC) 333