'Need Clear Answers, To Whom Contracts Were Awarded' : Supreme Court To Arunachal Pradesh Govt & Union On Allegations Against Arunachal CM

The bench of CJI Sanjiv Khanna and Justices Sanjay Kumar and KV Viswanathan was hearing a PIL seeking directions for SIT probe into the alleged irregular allotment of public contracts to the companies owned by relatives of the incumbent Chief Minister of Arunachal Pradesh, Mr Pema Khandu.

During the hearing when CJI inquired as to how many contracts were awarded, Advocate Prashant Bhushan appearing for the petitioners replied “ Several hundred crores worth of contracts! Just for his wife's company which is called Brand Eagle, about 70 contracts were given just to his wife's company”

“State is just being rioted, looted,"  he added

He pointed out that in the affidavit filed by the State, the stand taken is that the norm in the State is that the contract is given to the person willing to undertake the development work of the village and the villagers mutually select the awardee.

The Counsel for the State of Arunachal Pradesh argued that the petitioners filed the present plea with political motives. 

“This a politically motivated (plea) and mylord let me also inform you , who is the petitioner mylords? A bunch of people which is unregistered - they just keep doing this because they don't want any development in that state”

The Court also referred to the report of the CAG which was earlier directed by the Court to assist in the issue. The CJI noted that the report cited the Code of Conduct laid down by the Ministry of Home Affairs for Ministers of both Union and States which should be followed on entering the office. As per the said code, no minister can give undue advantage to his or her relatives.

Provision 2(d) of the Code states: After taking office, and so long as he remains in office, the Minister shall: -

(d) ensure that the members of his family do not start, or participate in, business concerns, engaged in supplying goods or services to that Government (excepting in the usual course of trade or business and at standard or market rates) or dependent primarily on grant of licenses, permits, quotas, leases, etc., from that Government;

Considering the same, the CJI enquired :

“We must have a clear-cut answer (1) Who are the parties to whom the contract is awarded and (2) what is the process? Whether the tenders were not called for? Without NIT? The MHA and Ministry of Finance must come out with this”

The bench noted that as per the CAG's response, the appropriate authority to answer queries relating to Ministers' Code of Conduct would be the Ministry of Home Affairs (MHA) and the Finance Ministry.

The Court has now directed detailed responses from the State of Arunachal Pradesh as well as MHA and Finance Ministry on the details of the tenders awarded and if any firms or individuals in the process were related to Respondent no.4-6 namely, CM Khandu and his family members.

The relevant part of the order reads :

“We would like a detailed affidavit from the state of Arunachal Pradesh to give details of the parties to whom contracts were awarded with reference to the contracts mentioned in the WP and additional affidavits. In addition, the State of Arunachal Pradesh will also furnish details of the contracts awarded to firms and individuals who trusted in respondent no. 4-6”

“The Union of India, that is, the Ministry of Home Affairs as well as Ministry of Finance will also file a detailed affidavit. We also require the CAG to submit their final report with regard to directions given in the order dated 20 th March 2024. “

The reports and affidavits are to be filed in a period of 5 weeks. Attorney General of India R Venkataramani represented the Union. 

The matter will now be heard in July.

What Is The Petition About?

As per the petition, there was alleged partiality in giving away key tenders to the close associates of Mr Pema Khandu including the construction company 'M/s brand Eagles' belonging to Khandu's spouse. Additionally, Pema's nephew Mr. Tsering Tashi, an MLA from Tawang District owning M/s Alliance Trading Co. has been awarded work contracts without following due procedure.

The petition prays for an investigation into the matter either by the Central Bureau of Investigation (CBI) or a Special Investigation Team (SIT).

Taking note of the same the bench issued notice in January 2024 in the writ petition with liberty to serve the standing counsel of State of Arunachal Pradesh.

Case Details : Save Mon Region Federation And Anr v The State Of Arunachal Pradesh And Ors. W.P.(C) No. 54/2024 PIL-W