Systemic procurement irregularities and missing documentation involving high officials warrant independent CBI investigation to ensure constitutional accountability.

The petitioners, a civil society organization and a resident of Arunachal Pradesh, filed a Public Interest Litigation (PIL) under Article 32 of the Constitution alleging systemic arbitrariness and nepotism in the award of public works contracts

They contended that contracts were preferentially allotted to Respondent Nos. 4 (the sitting Chief Minister), 5, and 6, or their relatives and political associates, often through "work orders" without competitive tendering

A court-mandated Comptroller and Auditor General (CAG) report dated 21.07.2025 highlighted significant irregularities, including missing vouchers for crores of rupees, execution of high-value works without tenders, and the absence of recorded justifications for dispensing with competitive bidding

The State defended these actions by citing geographical constraints, the Arunachal Pradesh District Based Entrepreneurs and Professionals Act, 2015, and arguing that the percentage of contracts awarded to the implicated respondents was statistically "minuscule"

1. Whether the allegations of systemic procedural departures, missing procurement records, and conflict of interest involving high public functionaries warrant an independent investigation by the CBI or a Special Investigation Team (SIT)

2. Whether the State's reliance on the physical execution of works and aggregate statistical data can regularize departures from the constitutional mandate of transparent and competitive public procurement

The Court primarily applied Article 14 of the Constitution, which mandates that State action in distributing public resources must be fair, transparent, and non-arbitrary

It relied on State of W.B. v. Committee for Protection of Democratic Rights, establishing that while the power to direct a CBI investigation must be exercised sparingly, it is necessary in exceptional situations to instill public confidence, especially where high officials are involved

The Court further applied principles from Sachidanand Pandey v. State of W.B. and Akhil Bhartiya Upbhokta Congress v. State of M.P., which dictate that public interest is best served through competitive tenders and that the "appearance of public justice" is as vital as justice itself

Statutory consideration was given to Section 3A of the Arunachal Pradesh District Based Entrepreneurs and Professionals Act, 2015, which permits work orders for small-scale projects but does not authorize unstructured discretion

The Court reasoned that the State holds public resources as a "trustee" and is bound by constitutional discipline regardless of local statutory relaxations

It observed that the "red flags" raised by the CAG—such as missing vouchers for Rs. 12.24 crores and the non-availability of tender evaluation records—indicated a breakdown of traceability in public expenditure

The Court rejected the State’s "arithmetic defense," holding that even a single instance of nepotism or a tainted process constitutes a violation of Article 14, as constitutional breaches are not diluted by statistics

It noted that because the allegations implicated the highest political office (the Chief Minister), an investigation by State-controlled agencies would suffer from a lack of perceived impartiality

Furthermore, the Court distinguished between a CAG audit (financial scrutiny) and a criminal investigation, noting that only the latter possesses the statutory power for search, seizure, and tracing layered beneficial ownership

The CBI is directed to register a Preliminary Enquiry (PE) within two weeks regarding public works contracts awarded between 01.01.2015 and 31.12.2025

The inquiry must specifically examine awards to Respondent Nos. 4 to 6 and their associates, focusing on fund flows, beneficial ownership, and the legality of dispensing with tenders

The State of Arunachal Pradesh must designate nodal officers to provide all records (physical and electronic) to the CBI within four weeks and must ensure no records are destroyed

The CBI is directed to file a status report before the Court within sixteen weeks