In a significant ruling on transparency in public spending, the Supreme Court examined allegations of irregularities in awarding public works contracts in Arunachal Pradesh. The case raised concerns about fairness, accountability, and possible favouritism in government decisions.
Background of the Case
The petition was filed by Save Mon Region Federation and its representative, alleging widespread irregularities in the State’s public procurement system between 2015 and 2025.
The petitioners claimed that several contracts were awarded without open tender processes and were instead given to a select group of contractors, including individuals allegedly linked to high-ranking officials. They sought an independent investigation by a Special Investigation Team (SIT) or the Central Bureau of Investigation (CBI).
The matter was also linked to earlier proceedings where the Supreme Court had directed the Comptroller and Auditor General (CAG) to examine similar allegations. The CAG’s report, submitted in July 2025, became a key document in the case.
Court’s Observations
The Bench led by Justice Vikram Nath emphasised that public contracts must adhere to constitutional principles of fairness and transparency.
“The State does not hold public resources as a private proprietor, but as a trustee on behalf of the people,” the Court observed, underlining the importance of accountability in public expenditure.
The Court noted several concerning patterns emerging from the record:
- Repeated use of work orders instead of competitive tenders
- Absence of key documents like vouchers and bid records
- Lack of recorded reasons for bypassing standard procedures
It clarified that even if a project is physically completed, that alone does not validate the legality of the procurement process.
“The constitutional requirement is not satisfied merely because a work exists on the ground,” the Bench remarked.
The Court further stressed that missing records and unexplained deviations from tendering norms raise serious questions about transparency and fairness.
The State government argued that the work order system was necessary due to local conditions and was permitted under existing laws. It also pointed out that the percentage of contracts allegedly awarded to related parties was minimal.
Additionally, the State relied on the CAG report, stating that many works were verified on the ground and payments were supported by measurement records.
Court’s Analysis
The Court, however, was not convinced by broad justifications. It held that:
- Legislative scrutiny of the CAG report does not bar judicial review
- Even limited deviations from fair procedures must be properly justified
- Missing documentation cannot be treated as a minor lapse
“The absence of core records directly affects the traceability of public expenditure,” the Bench noted.
It also clarified that statistical arguments about low percentages do not address specific instances where irregularities are evident.
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After examining the material, the Supreme Court concluded that the allegations raised serious issues regarding the integrity of public procurement.
The Court held that the available record disclosed a prima facie case requiring deeper scrutiny. It found that repeated procedural lapses, missing documentation, and questions around fairness justified an independent investigation.
Accordingly, the Court directed that the matter be examined through an independent investigative process to ensure accountability and uphold public confidence in governance.
Case Details
Case Title:Save Mon Region Federation & Anr. vs State of Arunachal Pradesh & Ors.
Case Number: Writ Petition (Civil) No. 54 of 2024
Judge: Justice Vikram Nath
Court: Supreme Court of India Decision Date: 2026 (reported as 2026 INSC 320)
