Union Home And Finance Ministries Must Come Out Clean: Supreme Court Seeks Affidavits On Arunachal Pradesh Allegedly Awarding Contracts To Its CM’s Family

During the hearing, a Bench of Chief Justice Sanjiv Khanna, Justice Sanjay Kumar, and Justice K V Vishwanathan said, “We must have a clear-cut answer. Who are the parties to whom the contract has been awarded to? What is the process?”

The Court added, “We would like a detailed affidavit from the State of Arunachal Pradesh which should give details of parties to whom contracts were awarded”.

The Petitioner was represented by Advocate Prashant Bhushan.

Bhushan submitted before the Court that there were hundreds of contracts worth several hundred crores, out of which at least 70 contracts had been awarded to the Chief Minister’s wife’s company, Brand Eagle. He stated, “The state is being run like a private limited company of the chief minister. Almost all the contracts under his ministry are going to his wife’s company, to his brother’s to his cousins' company and so on."

On the contrary, the Senior Advocate appearing for the State of Arunachal Pradesh argued that the present PIL was an absolute abuse of power and that the present petition had been filed by a bunch of small unregistered organizations, who keep doing this. He added that they do not want any development in the State.

The Court asked Senior Advocate Rajiv Dutta appearing for the State, “Have you denied that these contracts were awarded to these companies?"

Adverting to the counter affidavit filed by the State, Bhushan submitted, “Justification that they give in their counter affidavit is that land for any activity in the village are provided by the villagers free of cost in lieu of employment and income reservation through the contract work for the project".

Bhushan then started reading from the counter affidavit of the State, "The normal practice adopted here is that the govt contract is initially allotted to a contractor who is accustomed and used to the concerned village and is eligible, available and willing to undertake the contract work. The villagers normally prefer the contract firm provided by their elected representatives as they have maximum trust and flexibility to carry out the work under such contract firms. The work is performed by a group of villagers or the village community depending on nature and site of the work and profit and gains are shared by all the villagers. This procedure brings an immediate economic among villagers through employment generation and also profit from that".

Bhushan continued reading, "The process is of immense benefit to villagers who otherwise do not have regular income and were dependant on traditional tribal economy which has already broken down. The contractor to whom the work is awarded functions as a facilitator between the govt and the villagers in the system. By drawing payments from the department and settling the mandatory tax royalty and cess for which the villagers are unable to do as the village communities do not have registered eligible etc.”

The Senior Advocate Rajiv Dutta retorted by stating, “Your Lordship may just keep in mind- we have 28 districts, and this is 1 district alone where he is making these allegations.”

He submitted that the Comptroller and Auditor General has already submitted a report pursuant to a direction by the Supreme Court in that regard in a previous litigation.

The Court then read parts of the CAG's report and remarked that in the context of the CAG's report, clarification is required from the Union Government.

The Court told the Attorney General for India, R Venkatramani that the Ministry of Finance and the Ministry of Home Affairs needed to file their affidavits in the matter. The Court added, “The Ministry of Home Affairs and Ministry of Finance must come out clean with this.”

The Court also directed the State of Arunachal Pradesh to file an affidavit with details of the contract provided to the family of the Chief Minister, who are Respondents in the matter.

The Court then adjourned the matter to July 21, 2025, before which date, parties have been directed to complete their pleadings.

Cause Title: Save Mon Region Federation Vs The State Of Arunachal Pradesh (W.P.(C) No. 54/2024 Diary No. 2279 / 2024)