Full Judgment Text
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IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (C) NO. 645 of 2007
Centre for Environment & Food Security …Petitioner
Versus
Union of India & Ors. …Respondents
ORDER
Swatanter Kumar, J.
This Public Interest Litigation has been filed by
the petitioner before this Court for issuance of appropriate
directions to the respondents to ensure proper implementation
of the Mahatma Gandhi National Rural Employment Guarantee
Act, 2005 (for short the ‘Act’) and the schemes framed
thereunder. The Act was enacted to ensure enhancement of
livelihood security of households in the rural areas of the
country by providing at least hundred days of guaranteed wage
employment in every financial year to every household whose
adult members volunteer to do unskilled manual work and for
matters connected therewith and incidental thereto. The
authorities appointed under the Act are responsible to ensure
proper utilisation of the funds released by Union of India for
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implementation of the schemes framed under the provisions of
the Act. The Central Government issued guidelines, viz ., NREGA
Operational Guidelines in 2008 for proper implementation.
Petitioner has prayed before us that proper investigation is
required to be conducted into cases of non-compliance with the
provisions of the Act, schemes framed thereunder and the
guidelines issued by the Central Government to prevent
diversion of funds specifically allocated for implementation of the
schemes framed under the Act. The petition has been pending
before this Court for considerable time and certain
orders/directions have been issued by the Court from time to
time. The Central Government as well as various State
Governments had filed certain compliance affidavits with respect
to the orders/directions issued by this Court. However, it was
felt by this Court that all was not well with the functioning of the
various State Governments as well as the Centre for achieving
the objectives of the Act. Observing discrepancies in the
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implementation of the provisions of the Act, this Court, on 16
December, 2010, passed a detailed order. In the said order, it
was noticed that it was in the interest of justice and in larger
public interest that this Court should issue appropriate
directions to ensure proper and equitable functioning of the Act
and the schemes framed thereunder. After noticing in some
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detail various acts and omissions resulting into disobedience of
the statutory mandate and patent lacuna in implementation of
the schemes, like disbursement of money to the unemployed,
proper registration and utilisation of the funds by the concerned
authorities working under the provisions of the Act, special
reference was made to the failure on the part of the State of
Orissa in implementing the scheme and various provisions of the
Act. The concerned authorities under the State Governments
and even in the Central Government have failed to discharge
their statutory duties under the provisions of the Act on one
hand and on the other they have also violated the
orders/directions of this Court. This compelled the Court to
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pass the following directions on 16 December, 2010:
“Thus, we are compelled to issue the following
directions for strict compliance by the
concerned authorities:
1. The compliance report shall be filed in the
form of affidavit which shall be sworn by the
Additional Secretary, in-charge for compliance
of the provisions of the Act in the Ministry of
Rural Development, Government of India, New
Delhi and the Chief Secretary, State of Orissa
within three weeks from today.
2. The instances and figures referred to in the
survey report submitted by the petitioner shall
be specifically dealt with in that affidavit.
3. The affidavit should be filed positively
within the stipulated time directed in this order
and further we call upon both the Union of
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India and the State Government to show cause
as to why there should not be a direction to the
CBI to investigate this matter in accordance
with law.
We also issue the direction that affidavits to
be filed by the respective authorities shall, inter
alia, but specifically answer the following
points:
(a) What is the extent of funds released by
the Union of India to the State of Orissa for
implementation of the schemes under the
provisions of the Act
for each of the year between 2006 to 2010?
(b) To what extent and for what projects, the
released funds have been utilized? Whether
state of Orissa has given to the Central
Government the requisite certificate of
utilization?
(c) Findings to be recorded whether any
amount earmarked for any of the schemes
under NREGA has been diverted to any other
Head of Account including revenue account
by State of Orissa.
(d) How many applicants, of how many
households, have been actually employed
and have been paid allowances under the
provisions of the Act?
(e) The figures in terms of the above
directions shall be provided for the period
from 2006 to 2010.
(f) Whether any social audit of the projects
under the Gram Sabha has been conducted
in terms of Section 17(2)? If yes, its detailed
findings for the above mentioned period.
(g) Whether all the
authorities/officers/officials, from the higher
levels in the Central Government or State
Governments to the grass-root levels at
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District, intermediary and Panchayats, to
ensure effective implementation of the
schemes under
the Act have been appointed? If no, reasons
therefor.
(h) Whether the Union of India or the State
Government, in consultation with the
Comptroller and Auditor General of India or
otherwise, have conducted any general audit
of accounts of the schemes at any level in
terms of Section 24 of the Act? If the answer
is in the affirmative, then details thereof,
particularly, the objections, if any, raised by
the Auditors; if the answer is in the negative,
then reasons therefor.
(i) Whether the Central Government has
issued any directions concerning utilization
of funds under NREGA while disbursing the
amounts to State of Orissa? Whether these
have been complied with by State of Orissa?
(j) Whether the Central Government has
received any complaints about working of the
schemes, utilization of funds, providing of
employment and payment of allowances
under the provisions of the Act? If so, what
action has been taken in terms of Section
27(2) of the Act? It should be stated with
complete statistics and data.
(k) Whether the Union of India or the State
of Orissa have, till date, found even a single
official/functionary guilty of contravention in
terms of Section 25 of the Act and whether
any complaint has been filed in any Court of
competent jurisdiction? If so, the result
thereof.
(l) The contents and the background of the
complaints received and referred in
`Annexure-R1' to the affidavit filed by the
Union of India should be stated precisely.
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Why the enquiry reports as referred to in
`Annexure-R1' to the Affidavit of the Union of
India of July 2008, no final reports have been
prepared and submitted before this Court till
date. Further, it shall also be stated as to
why the findings of the interim reports
referred in the said affidavit have not been
placed before this Court. A complete
summary thereof shall be annexed to the
Affidavit.”
In furtherance to the above directions, the Union of India
and the State of Orissa have filed their affidavits in those terms.
From the affidavits filed, it was clear that there was temporary
diversion of funds, no proper audit has been conducted in terms
of Section 24 of the Act and utilization of funds was improper.
Not satisfied with the replies of the Central Government as
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well as the State of Orissa, this Court on 14 March, 2011
noticed that there are particularly two aspects to be taken care
of at this stage; one is concerned with the corruption in the
implementation of NREGA Scheme and the other is concerned
with the implementation of the Operational Guidelines issued by
the Central Government under Section 27 of the Act. In the case
of State of Orissa, it was brought to the notice of the Court that
huge amount has been misappropriated and, consequently, the
beneficiaries of the NREGA Scheme are deprived of their dues.
Learned Additional Solicitor General, appearing for the
Union of India, informed this Court that the Central Government
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is considering the possibility of handing over the matter to
Central Bureau of Investigation (for short the ‘CBI’) for
investigation in cases of misappropriation and prayed for time
for seeking instructions from the concerned Government in this
behalf. This Court further directed the Government of Orissa to
implement the Guidelines issued by the Central Government
with regard to muster rolls, maintenance of job
cards/applications and transfers to the accounts of the
beneficiaries. It must be noticed at this stage that the
Comptroller and Auditor General of India (for short the ‘CAG’)
had prepared certain reports in regard to implementation of the
schemes framed under the Act. Similar report was prepared by
the National Institute for Rural Development (NIRD) after
conducting social audits in certain villages of Orissa on request
of the Government of Orissa. Both these reports have pointed
out the irregularities in implementation of the provisions of the
Act and the schemes framed thereunder. These reports have
even been accepted by the State Government and it had directed
all the Collectors and District Programme Controllers (DPCs) to
take necessary follow-up action. They had been instructed to
submit exhaustive compliance/action-taken report in relation to
the observations made by the CAG and NIRD in their respective
reports and to conduct complete verification of all the allegations
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contained therein.
In the affidavit filed on behalf of the State of Orissa, it was
admitted that certain financial and other irregularities in
implementation of the schemes have been noticed. Not only
this, it was also stated in the affidavits that certain departmental
actions were also initiated against the erring officers/officials.
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This Court in its order dated 16 December, 2010, had
specifically noticed that the interim compliance reports filed by
the Fact-Finding Committee constituted by the State
Government have not been taken to their logical ends and no
action has been taken as per law. All these facts compelled this
Court to ask the Central Government to hand-over the
investigation into all these incidences of irregularities and
discrepancies where, ex-facie , criminal offences are alleged to
have been committed.
Learned Additional Solicitor General had placed on record a
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copy of the letter dated 4 April, 2011 written by the Director,
Mahatma Gandhi NREGA to the Director CBI requiring the latter
to investigate the matter. Paragraphs 2 and 3 of the said letter
read as under:
“2. A copy of the aforesaid Writ Petition is
enclosed, in which the petitioner has mainly
emphasized on the alleged irregularities in the
implementation of MGNREGS in the State of
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Orissa. Annexure ‘A’ to the Writ petition is the
report of the petitioner titled “Rural Job Scam
Survey Report on Implementation of NREGA in
Orissa”. In the wake of directive from the
Hon’ble Supreme Court, it has been decided to
refer the Orissa case to the Central Bureau of
Investigation. A copy of the counter affidavit
along with extracts of relevant Annexures filed
by the State of Orissa before the Hon’ble
Supreme Court is enclosed.
3. you are requested to kindly have the matter
investigated and cause to initiate criminal
proceedings against the delinquent officials
under the relevant laws. This may please be
accorded priority. This is issued with the
approval of the Hon’ble Minister (Rural
Development).”
After issuance of this letter, the Panchayti Raj Department
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of Government of Orissa, issued a Notification dated 23 April,
2011 in regard to the orders of this Court. The Government of
Orissa, referring to the report of a survey conducted by the
petitioner herein on performance of NREGA in 100 villages of six
districts in Orissa during the year 2006-2007, accorded its
consent to CBI to probe into alleged large-scale irregularities and
misappropriations of funds under the NREGA scheme in the
State of Orissa in exercise of its powers conferred under Section
6 of the Delhi Special Police Establishment Act, 1946. Vide
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letter of the same date, i.e. 23 April, 2011, the Special Director,
CBI, wrote to Department of Personnel and Training of
Government of India stating that the matter proposed to be
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entrusted to them involves field investigation in a large number
of villages in remote parts of the State of Orissa and that the CBI
is severely handicapped in respect of manpower and logistic
resources. It was requested that their requirement for man-
power and logistic resources may be brought to the notice of this
Court for seeking appropriate direction in that regard.
During the course of hearing, Mr. Prashant Bhushan,
learned counsel appearing for the petitioner made some
averments that this investigation should be conducted all over
the State and reliance should not only be placed upon the
reports of CAG and NIRD but the investigating agency should
also take into consideration the survey report prepared by the
petitioner (Annexure ‘A’ to the writ petition) to make it a
comprehensive and fruitful investigation. However, Mr. Venu
Gopal, learned senior counsel appearing for the State of Orissa,
contended that the CBI should not be called upon to conduct a
fishing enquiry for the entire State in relation to implementation
of the provisions of the Act and schemes framed thereunder as it
would seriously hamper progress of the same and even
demoralize the persons working under the scheme. It was
suggested by him that such investigation should be confined to
six districts of State of Orissa mentioned in the survey-report of
the petitioner (Annexure ‘A’ to the writ petition) and should be
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limited for the purposes of examining whether there has been
commission of any criminal offence by the officers/officials
functioning under the provisions of the Act.
Learned Additional Solicitor General, appearing for the
Union of India, argued that the CBI should be permitted to
conduct a free and fair investigation all over the State and it
should examine and take into consideration all the three
documents, i.e. the survey report prepared by the petitioner
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(Annexure ‘A’ to the writ petition), report of the CAG dated 31
March, 2009 and the report submitted by the NIRD.
Wide powers of investigation are vested in the CBI under
the provisions of the Delhi Special Police Establishment Act,
1946. Another provision which has a significant bearing on the
matters before us is Section 27(2) of the Act. This provision
specifically states that the Central Government may, on receipt
of any complaint regarding the issue of improper utilization of
funds granted under this Act in respect of any scheme, if prima
facie satisfied that there is a case, cause an investigation into
the complaint by any agency designated by it. Thus, the Central
Government has full power to refer the matter to CBI for
investigation in regard to the complaints received by it. The
State Government has enquired into complaints received and
even engaged NIRD to conduct social-audits and submit its
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report to the State Government. The Central Government is
even vested with the power, in such cases, to stop release of the
funds to the scheme and institute appropriate remedial
measures for its proper implementation. Thus, it will be useful
for the concerned authorities in the Central Government to
ponder over the entire matter and propose such directions or
measures which the State Government should take in order to
prevent recurrence of the events that have taken place in
number of States and particularly in the State of Orissa.
Having heard the learned counsel appearing for the parties
at some length and keeping in view the background of this case,
particularly the factual matrix referred by us above, we consider
it appropriate to issue the following directions :
1. The CBI will conduct free and fair investigation in regard to
the implementation of provisions of the Act and the
schemes framed thereunder without any impediment;
2. This investigation shall be restricted to 100 villages in six
districts of Orissa as spelt out in the Notification issued by
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the State of Orissa dated 23 April, 2011;
3.
4. The investigating agency shall refer to and take into
consideration all the three documents, i.e. the survey report
prepared by the petitioner (Annexure ‘A’ to the writ petition),
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report of the CAG dated 31 March, 2009 and the report
submitted by NIRD to the State of Orissa.
5. The CBI shall conduct a complete and comprehensive
investigation in the matter. Whereupon, it shall file its
report in regard to commission of criminal offences in
implementation of the schemes or otherwise before the
court of competent jurisdiction for appropriate action. The
CBI shall also place a copy thereof on the record of this
Court.
6. Other irregularities or illegalities, apart from the
commission of criminal offences, which come to the notice
of the CBI during the course of this investigation, shall be
submitted to the Chief Secretary, State of Orissa in the form
of separate report for appropriate action in accordance with
law.
7. The investigation should be concluded as expeditiously as
possible. However, we would expect the CBI to file its first
8. report within a period of six months from the date of
pronouncement of this order.
9. The State Government of Orissa, all the State Departments
and concerned authorities of the Central and State
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Governments are hereby directed to fully cooperate with the
CBI so as to facilitate the expeditious completion of the
investigation. The Ministry of Rural Development,
Government of India is also directed to provide technical
assistance to CBI during the course of investigation in
regard to all the matters falling within the scope of that
investigation. Union of India shall also furnish the
guidelines, directions and measures which are required to
be taken by the State of Orissa.
10. Besides issuing the above directions, we hereby also direct
that notice to be issued to the States of Uttar Pradesh and
Madhya Pradesh to respond to the reports filed by the
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petitioner along with its rejoinder affidavit dated 21
February, 2011 in regard to implementation of
provisions/schemes under the Act in those States.
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12.Keeping in view the fact that there has been persistent
default on the part of a number of States in fully
implementing the provisions of the Act, we hereby direct all
the State Governments to file affidavits stating whether they
have accepted and are duly implementing the Operational
Guidelines issued by the Government of India, within six
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weeks from today. In the event, these Guidelines have not
been accepted or are not being implemented, the affidavit
shall specifically state reasons for such non-acceptance
and/or non-implementation of the afore-stated
directions/guidelines.
13.We also direct the Central Government to consider the
entire matter objectively within the framework of the
provisions of the statute and place on record of this Court,
before the next date of hearing, the directions or measures
which it proposes to issue to all the States to prevent
recurrence of what has happened in the State of Orissa.
With the above orders, we direct that all concerned shall
strictly adhere to and comply with the directions contained in this
order. We make it clear that in the event of default this Court would
be compelled to take appropriate action against the defaulting
officers/officials/authorities.
Stand over for eight weeks.
..……........................................CJI
[S.H. Kapadia]
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.………........................................J.
[K.S. Panicker Radhakrishnan]
..…
…...........................................J.
[Swatanter Kumar]
New Delhi
May 12, 2011