SAVE MON REGION FEDERATION & ANR.versusTHE STATE OF ARUNACHAL PRADESH & ORS.

                   [2026] 5 S.C.R. 1 : 2026 INSC 320

               Save Mon Region Federation & Anr.
                                v.
              The State of Arunachal Pradesh & Ors.
                    (Writ Petition (Civil) No. 54 of 2024)
                                 06 April 2026
      [Vikram Nath,* Sandeep Mehta and N.V. Anjaria, JJ.]


                           Issue for Consideration
       The principal issue that arises for consideration is whether the
       allegations and the prima facie material relating to the award and
       execution of public works contracts, including the asserted pattern
       of repeated departures from open and competitive tendering,
       gaps in official documentation, and the stated award of works to
       Respondent Nos. 4 to 6 or firms and individuals related to them,
       warrant a direction by this Court for an independent investigation
       by the CBI and or the constitution of a SIT, and, if so, the scope
       of such investigation and the consequential directions required to
       secure the integrity of the process.

                                  Headnotes†
       Constitution of India – Arts.14, 21, 32 – Public procurement –
       Award of public contracts – The present Writ Petition u/Art.32
       of the Constitution of India has been filed in public interest,
       alleging that the award and execution of public works contracts
       in the State have been marked by arbitrariness, favouritism
       and serious departures from the governing financial and
       procurement norms, including allegations of preferential
       allotment of works to respondent nos. 4 to 6 and to firms or
       individuals stated to be related to them – On that basis, the
       petitioners seek, inter alia, a direction for an independent
       investigation by a Special Investigation Team (SIT) and or the
       Central Bureau of Investigation (CBI):
       Held: In a constitutional democracy governed by the rule of law,
       the exercise of public power is always subject to constitutional
       discipline – The State does not hold public resources as a private
       proprietor, but as a trustee on behalf of the people – Whenever


* Author
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     the State undertakes the allocation of public resources, the award
     of public contracts, or the execution of public works, it is bound to
     act in a manner that is transparent, fair, and consistent with the
     guarantee of equality u/Art.14 of the Constitution of India – The
     process through which such decisions are taken must therefore
     be capable of withstanding objective scrutiny and must reflect
     a decision-making framework that is free from arbitrariness,
     favouritism, or undisclosed conflicts of interest – That the petitioners’
     allegations are not confined to a mere grievance about the outcome
     of a tender – They raise issues that go to the integrity of public
     procurement and the traceability of public expenditure – The
     audit report, the petitioners’ additional affidavit, and the State’s
     replies together disclose repeated resort to non-tender methods,
     repeated absence of recorded reasons for such resort, and
     repeated non-production of vouchers and tender-related records
     in relation to high value public projects – The State’s reliance on
     aggregate percentages does not, by itself, answer the concerns
     arising from specific instances where the procurement trail is
     incomplete or absent – These are matters that require structured
     investigation into the decision making process, the custody and
     availability of records, the reasons for deviations, the identification
     of beneficiaries and related-party links, and the ascertainment
     of whether any cognizable offences or other legal breaches are
     disclosed – This is a fit case where an independent investigation is
     necessary – The nature of allegations, the institutional proximity of
     the persons against whom allegations are made, and the recurring
     deficiencies in the procurement record make it necessary to entrust
     the investigation to an agency which is institutionally independent
     of the State executive – The CBI is the appropriate agency for this
     purpose. [Paras 1, 2 ,29, 41]

     Constitution of India – Art.14 – Award of public contracts –
     Legality, Transparency, and Institutional accountability:
     Held: Public confidence in governance rests upon the assurance
     that opportunities created by the State are administered through
     institutions that respect equality, integrity, and accountability –
     Where the distribution of public resources is clouded by allegations
     of nepotism, patronage, or opaque decisionmaking, the issue is not
     merely one of administrative irregularity – It raises concerns that
     go to the heart of the constitutional promise that State action shall
[2026] 5 S.C.R.                                                                3

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

     be fair, impartial, and guided by reason – Constitutional courts,
     as guardians of that promise, are therefore required to ensure
     that the exercise of public authority remains anchored in legality,
     transparency, and institutional accountability. [Para 2]

     Constitution of India – Art.32 – Applicable standard for invoking
     Court-directed investigation:
     Held: It is well settled that, in exercise of jurisdiction u/Art. 32 of
     the Constitution, this Court possesses the constitutional authority
     to direct that an investigation be carried out by an agency other
     than the ordinary State investigating machinery, including the CBI,
     where the circumstances of the case so warrant – At the same
     time, the jurisprudence of this Court has consistently emphasised
     that such power is to be exercised with restraint – The governing
     principle is that transfer of investigation to the CBI is justified only
     in rare and exceptional cases where it is necessary to do justice
     between the parties and to instil confidence in the public mind, or
     where the investigation by the State police lacks credibility and it
     is necessary to secure a fair, honest and complete investigation –
     In determining whether the extraordinary jurisdiction to entrust
     investigation to the CBI should be exercised, the Court ordinarily
     examines whether the material placed before it discloses (i) a prima
     facie case raising serious questions of legality, (ii) circumstances
     suggesting that investigation by the ordinary State machinery
     may not inspire confidence where high public functionaries are
     implicated, and (iii) the necessity of an independent inquiry to
     preserve public confidence in the rule of law. [Paras 6, 8,9]
     Conatitution of India – Public contracts – Constitutional
     Discipline in public procurement – Discussed. [Paras 10-15]

     Constitution of India – Art. 32 – Award of Public contracts –
     Allegation that the award and execution of public works
     contracts in the State have been marked by arbitrariness,
     favouritism and serious departures from the governing
     financial and procurement norms – Directions issued:
     Held: 1) The Central Bureau of Investigation (CBI) to register
     a preliminary enquiry; 2) The preliminary enquiry and the
     consequential investigation, if any, shall cover the award and
     execution of public works contracts and work orders in the State of
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     Arunachal Pradesh for the period from 01.01.2015 to 31.12.2025,
     including the works and compilations placed on record in these
     proceedings; 3) The CBI shall not be precluded from examining
     transactions outside the above period to the limited extent
     necessary for tracing beneficial ownership, related-party links,
     fund flows, or other connected circumstances that bear upon the
     transactions within the above period; 4) The State of Arunachal
     Pradesh and all its concerned departments, authorities and
     instrumentalities directed to cooperate fully with the CBI; 5) The
     Chief Secretary, State of Arunachal Pradesh to designate a nodal
     officer for coordination with the CBI, and each of the concerned
     departments shall also designate a nodal officer within the same
     period; 6) The State of Arunachal Pradesh to ensure that no
     record, physical or electronic, relevant to the subject matter of
     the enquiry and investigation is destroyed, altered, or rendered
     inaccessible. [Para 44]

                              Case Law Cited
     State of W.B. v. Committee for Protection of Democratic Rights
     [2010] 2 SCR 979 : (2010) 3 SCC 571 – followed.
     Sachidanand Pandey v. State of W.B. [1987] 2 SCR 223 :
     (1987) 2 SCC 295; Akhil Bhartiya Upbhokta Congress v. State
     of M.P. [2011] 5 SCR 77 : (2011) 5 SCC 29; Centre for Public
     Interest Litigation v. Union of India [2012] 3 SCR 147 : (2012) 3
     SCC 1 – referred to.

                                List of Acts
     Constitution of India; Arunachal Pradesh District Based
     Entrepreneurs and Professionals (Incentives, Development and
     Promotional) Act, 2015.

                             List of Keywords
     Article 14 of Constitution; Article 32 of Constitution; Public Trust
     Doctrine; Arbitrariness & Malafide; Preliminary Enquiry; Public
     Procurement; Open Tender; Conflict of Interest; Work Orders;
     Fiduciary Duty; Systemic Irregularity; Transparency & Accountability;
     Exchequer Loss; Constitutional discipline; Objective scrutiny;
     Nepotism; Abuse of official position; Judicial review; constitution
     of an SIT; Irregularities in procurement process.
[2026] 5 S.C.R.                                                           5

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

                             Case Arising From
     CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No. 54 of 2024
     Under Article 32 of the Constitution of India

                          Appearances for Parties
     Advs. for the Petitioner(s):
     Prashant Bhushan, Ms. Neha Rathi, Ms. Kajal Giri.
     Advs. for the Respondent(s):
     Tushar Mehta, Solicitor General, K M Nataraj, A.S.G., Anil
     Shrivastav, A.A.G., Rauf Rahim, Sr. Adv., Mukesh Kumar Maroria,
     Madhav Sinhal, Vinayak Sharma, Aaditya Shankar Dixit, Santosh
     Kumar, Sarthak Karol, Himanshu Satija, Aman Mehta, Ms. Avni
     Shrivastav, Mohsin Rahim, Ali Asghar Rahim, Gurmeet Singh
     Makker, Vinayak Sharma, Anuj Udupa, Anmol Chandan, Disha
     Thakkar, Vinayak Sharma, Anuj Udupa, Anmol Chandan, Alabhya
     Dhamija, Ms. Disha Thakkar, Amrish Kumar.

                Judgment / Order of the Supreme Court

                                 Judgment

     Vikram Nath, J.

1.   In a constitutional democracy governed by the rule of law, the exercise
     of public power is always subject to constitutional discipline. The
     State does not hold public resources as a private proprietor, but as
     a trustee on behalf of the people. Whenever the State undertakes
     the allocation of public resources, the award of public contracts, or
     the execution of public works, it is bound to act in a manner that is
     transparent, fair, and consistent with the guarantee of equality under
     Article 14 of the Constitution of India. The process through which
     such decisions are taken must therefore be capable of withstanding
     objective scrutiny and must reflect a decision-making framework
     that is free from arbitrariness, favouritism, or undisclosed conflicts
     of interest.
2.   Public confidence in governance rests upon the assurance that
     opportunities created by the State are administered through
     institutions that respect equality, integrity, and accountability. Where
     the distribution of public resources is clouded by allegations of
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                         Supreme Court Reports


     nepotism, patronage, or opaque decision-making, the issue is not
     merely one of administrative irregularity. It raises concerns that go to
     the heart of the constitutional promise that State action shall be fair,
     impartial, and guided by reason. Constitutional courts, as guardians
     of that promise, are therefore required to ensure that the exercise
     of public authority remains anchored in legality, transparency, and
     institutional accountability.
3.   The present Writ Petition under Article 32 of the Constitution of India
     has been instituted by the petitioners, namely, Save Mon Region
     Federation, a civil society organisation working for the residents of
     the Mon region in the State of Arunachal Pradesh, and Mr. Joddik
     Tali, stated to be its authorised representative and a resident of the
     State. The petition has been filed in public interest, alleging that the
     award and execution of public works contracts in the State have
     been marked by arbitrariness, favouritism and serious departures
     from the governing financial and procurement norms, including
     allegations of preferential allotment of works to Respondent Nos. 4
     to 6 and to firms or individuals stated to be related to them. On that
     basis, the petitioners seek, inter alia, a direction for an independent
     investigation by a Special Investigation Team (hereinafter referred
     to as “SIT”) and or the Central Bureau of Investigation (hereinafter
     referred to as “CBI”), along with such further consequential directions
     as this Court may deem fit.
4.   The facts giving rise to the present writ petition are as follows:
     4.1. The gravamen of the petition is an allegation of systemic
          illegality and arbitrariness in public procurement and award of
          public works in the State of Arunachal Pradesh, with a particular
          emphasis on the award of works to firms and individuals stated
          to be closely connected with respondent No. 4 (the present Chief
          Minister of Arunachal Pradesh) and respondent Nos. 5 and 6,
          and to their close political associates. The petitioners assert
          that the pattern reflected in the listed works indicates nepotism,
          conflict of interest and abuse of official position, resulting in
          diversion of public contracts to a narrow set of beneficiaries.
     4.2. In support of the above, the petitioners allege, inter alia, that
          several works were awarded through work orders without
          an open and competitive tender process, including works of
          substantial value, and that the record placed by the State
[2026] 5 S.C.R.                                                            7

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

           is incomplete as it does not disclose the underlying tender
           documents, comparative statements, approvals, file notings
           and other material particulars needed to demonstrate fairness
           and transparency. The petitioners also rely upon procurement
           norms which emphasise transparency, competition, fairness,
           and avoidance of conflict of interest, and contend that even
           where general procurement rules are stated not to apply
           proprio vigore to State Governments, the State’s own sanction
           conditions often require adherence to procedural formalities
           and competitive bidding.
     4.3. As regards the period of the alleged irregularities, the petitioners
          place reliance upon a range of works spanning multiple years.
          They rely, in particular, upon earlier allegations examined through
          audit scrutiny, and also allege continuation of the pattern in
          later years. For purposes of affidavits and compilation of details
          directed by this Court, the controversy has been addressed
          with reference to the period between 2015 and 2025, and the
          petitioners contend that even within that period the material
          suggests persistent procedural departures and preferential
          treatment.
     4.4. On the aforesaid premise, the petitioners seek directions for
          an independent investigation, including constitution of a SIT or
          a Court-monitored investigation by the CBI, asserting that the
          allegations implicate public faith in governance and the integrity
          of public expenditure, and therefore warrant scrutiny beyond
          departmental or internal mechanisms.
     4.5. The present writ petition also bears a close connection with
          SLP (C) No. 34696 of 2010, titled Voluntary Arunachal Sena v.
          State of Arunachal Pradesh and Others, which arose out of an
          earlier public interest litigation before the High Court. By order
          dated 20.03.2024, this Court disposed of the said special leave
          petition and directed that the complaint or complaints on which
          the proceeding was founded be examined by the Comptroller and
          Auditor General of India (hereinafter referred to as “the CAG”).
     4.6. In the said order, this Court also took note that interlocutory
          applications seeking interference in respect of certain subsequent
          contracts were not being examined in those proceedings, as
          an independent writ petition had been filed in relation to such
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             subsequent set of contracts, which is the present writ petition.
             Pursuant to the directions issued thereafter in these proceedings,
             the CAG has filed its final report dated 21.07.2025 in relation
             to the nine allegations which formed part of the record in SLP
             (C) No. 34696 of 2010. The petitioners rely upon the report
             to contend that it reflects repeated departures from tender
             based procurement and serious gaps in official documentation.
             The State, on the other hand, relies upon the portions of the
             report which record verification of payments with reference to
             measurement books and joint physical verification of certain
             works.
5.    Having heard learned counsel for the parties and having perused the
      pleadings, affidavits and the material placed on record, the principal
      issue that arises for consideration is whether the allegations and the
      prima facie material relating to the award and execution of public
      works contracts, including the asserted pattern of repeated departures
      from open and competitive tendering, gaps in official documentation,
      and the stated award of works to Respondent Nos. 4 to 6 or firms
      and individuals related to them, warrant a direction by this Court for
      an independent investigation by the CBI and or the constitution of a
      SIT, and, if so, the scope of such investigation and the consequential
      directions required to secure the integrity of the process.

      Applicable standard for invoking Court-directed investigation
6.    The petitioners seek a direction for investigation by the CBI or, in the
      alternative, the constitution of a SIT. It is well settled that, in exercise
      of jurisdiction under Article 32 of the Constitution, this Court possesses
      the constitutional authority to direct that an investigation be carried out
      by an agency other than the ordinary State investigating machinery,
      including the CBI, where the circumstances of the case so warrant.
      At the same time, the jurisprudence of this Court has consistently
      emphasised that such power is to be exercised with restraint.
7.    In State of W.B. v. Committee for Protection of Democratic
      Rights1, the Constitutional Bench of this Court held that a direction
      by a constitutional court to the CBI to investigate a cognizable offence
      within the territory of a State is not barred merely for want of State


1    (2010) 3 SCC 571
[2026] 5 S.C.R.                                                            9

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

     consent, and such a direction does not violate the federal structure
     or the doctrine of separation of powers. The Court also underscored
     that constitutional courts, as protectors of civil liberties, have not
     only the power but also the obligation to protect fundamental rights,
     including under Article 21. However, the same decision cautions that
     the very amplitude of the power under Articles 32 and 226 of the
     Constitution of India requires great care in its exercise. It has been
     reiterated that a direction to the CBI is not to be made as a matter
     of routine or merely because allegations have been levelled against
     the local police. The extraordinary power is to be exercised sparingly
     and cautiously, and in exceptional situations where it becomes
     necessary to lend credibility and instil confidence in the investigation,
     or where the incident has wider ramifications, or where such a course
     is necessary for doing complete justice and enforcing fundamental
     rights. The relevant portion from the judgement is as follows:
           “69. In the final analysis, our answer to the question
           referred is that a direction by the High Court, in exercise
           of its jurisdiction under Article 226 of the Constitution, to
           CBI to investigate a cognizable offence alleged to have
           been committed within the territory of a State without the
           consent of that State will neither impinge upon the federal
           structure of the Constitution nor violate the doctrine of
           separation of power and shall be valid in law. Being the
           protectors of civil liberties of the citizens, this Court and
           the High Courts have not only the power and jurisdiction
           but also an obligation to protect the fundamental rights,
           guaranteed by Part III in general and under Article 21 of
           the Constitution in particular, zealously and vigilantly.
           70. Before parting with the case, we deem it necessary to
           emphasise that despite wide powers conferred by Articles
           32 and 226 of the Constitution, while passing any order, the
           Courts must bear in mind certain self-imposed limitations
           on the exercise of these constitutional powers. The very
           plenitude of the power under the said articles requires
           great caution in its exercise. Insofar as the question of
           issuing a direction to CBI to conduct investigation in a
           case is concerned, although no inflexible guidelines can
           be laid down to decide whether or not such power should
           be exercised but time and again it has been reiterated that
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                          Supreme Court Reports


           such an order is not to be passed as a matter of routine
           or merely because a party has levelled some allegations
           against the local police. This extraordinary power must be
           exercised sparingly, cautiously and in exceptional situations
           where it becomes necessary to provide credibility and instil
           confidence in investigations or where the incident may have
           national and international ramifications or where such an
           order may be necessary for doing complete justice and
           enforcing the fundamental rights. Otherwise CBI would
           be flooded with a large number of cases and with limited
           resources, may find it difficult to properly investigate even
           serious cases and in the process lose its credibility and
           purpose with unsatisfactory investigations.”
8.    The governing principle is that transfer of investigation to the CBI is
      justified only in rare and exceptional cases where it is necessary to
      do justice between the parties and to instil confidence in the public
      mind, or where the investigation by the State police lacks credibility
      and it is necessary to secure a fair, honest and complete investigation.
      Illustratively, such transfer may be warranted where high officials of
      the State are involved, where the accusation is against top officials
      of the investigating agency such that they may influence the course
      of investigation, or where the investigation is prima facie found to
      be tainted or biased.
9.    These principles also make it clear that this Court, while considering
      a request for CBI investigation or constitution of an SIT, does not
      undertake an adjudication on culpability. The Court examines whether
      the material placed discloses a prima facie case which necessitates
      entrustment of investigation to an independent agency so that the rule
      of law is upheld and the investigative process commands confidence,
      particularly where the status or authority of persons implicated
      may reasonably give rise to apprehensions about the impartiality
      of the ordinary investigative process. In determining whether the
      extraordinary jurisdiction to entrust investigation to the CBI should
      be exercised, the Court ordinarily examines whether the material
      placed before it discloses (i) a prima facie case raising serious
      questions of legality, (ii) circumstances suggesting that investigation
      by the ordinary State machinery may not inspire confidence where
      high public functionaries are implicated, and (iii) the necessity of an
      independent inquiry to preserve public confidence in the rule of law
[2026] 5 S.C.R.                                                          11

                       Save Mon Region Federation & Anr. v.
                       The State of Arunachal Pradesh & Ors.

     Constitutional discipline in public procurement
10. The award of public contracts is an exercise of public power. It involves
    the expenditure of public funds and the conferment of economic
    benefit by the State. Such decisions are not insulated as matters of
    private contract. They are subject to the discipline of Article 14 of the
    Constitution of India, because the State must act fairly, transparently,
    and in a non-arbitrary manner when it distributes public resources.
11. This Court has repeatedly recognised that State owned or public
    owned resources cannot be dealt with at the absolute discretion of
    the executive. Public interest is the paramount consideration. One
    of the ordinary and safest methods of securing that public interest is
    by inviting competition through tenders. A departure from competitive
    tendering may be permissible in a limited set of situations, but only
    when the departure is justified by rational and recorded reasons that
    do not suggest discrimination. In Sachidanand Pandey v. State of
    W.B.2, this Court emphasised that appearance of public justice is
    as important as doing justice, and nothing should be done which
    gives an appearance of bias, jobbery or nepotism. That principle has
    particular force in matters of public contracting, because secrecy,
    discretion and personal proximity are precisely the conditions in
    which abuse of power becomes difficult to detect.
12. The constitutional requirement is not satisfied merely because a work
    exists on the ground or because an authority asserts that funds were
    utilised. Public procurement has two distinct dimensions. One is the
    physical execution of work. The other is the integrity of the process
    by which public money is committed and paid out. A project may
    be visible at the site and yet the procurement decision may still be
    unconstitutional if it was arrived at through an arbitrary, opaque or
    conflicted process. It is the decision-making process which must be
    capable of scrutiny through contemporaneous records, including the
    tender trail where tender is required, and the recorded justification
    where tender is dispensed with.
13. The discipline that governs State largesse reinforces this position.
    The State and its instrumentalities cannot confer benefits according
    to the whims of any political or administrative functionary. In Akhil


2   (1987) 2 SCC 295
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       Bhartiya Upbhokta Congress v. State of M.P.3, this Court held
       that every decision to confer benefit must be founded on a sound,
       transparent and discernible policy and must be implemented by a
       non-discriminatory method, free from favouritism and nepotism. The
       same understanding informs the statement in Centre for Public
       Interest Litigation v. Union of India4, that whenever a contract
       or licence is granted the public authority must adopt a transparent
       and fair method so that eligible persons have a fair opportunity
       of competition. These decisions do not lay down tendering as a
       mechanical ritual. They treat transparency and fair opportunity as
       constitutional essentials in the disposition of public resources.
14. These principles are especially stringent where the allegation is of
    conflict of interest or related party benefit. In such situations, the
    constitutional concern is not limited to whether the State obtained
    value for money. The concern is whether public power was used,
    directly or indirectly, to confer private advantage, or whether the
    process was structured in a manner that excluded competition and
    enabled a preferred beneficiary. Once such a concern arises on the
    record, it is not answered by showing that the overall percentage of
    work awarded to related parties is numerically small. A constitutional
    violation in public contracting is not diluted by statistics. Even a
    single instance, if established, undermines equality, the rule of law
    and public confidence in fair administration.
15. At the same time, it must be emphasized that judicial review in this
    field does not convert the Court into a tender approving authority.
    The Court does not sit to choose the contractor or to re-evaluate
    technical bids. The Court examines whether the process conforms
    to constitutional standards of fairness, transparency and non-
    arbitrariness, and whether the record supports the decision. Where
    the complaint is not about comparative merits of bidders but about
    systemic opacity, repeated departures from competitive methods,
    missing records and alleged conflict of interest, the matter travels
    beyond an ordinary contractual grievance and raises questions of
    constitutional accountability.




3     (2011) 5 SCC 29
4     (2012) 3 SCC 1
[2026] 5 S.C.R.                                                         13

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

     Procurement deviations and missing records as red flags
16. A separate but closely connected aspect concerns the legal
    significance of a departure from competitive tendering and the non-
    availability of core procurement records. Competitive tendering is
    not an inflexible ritual, but it remains the ordinary method by which
    the State demonstrates fairness and secures public confidence in
    the disposition of public resources. When the State dispenses with
    an open tender, the exception must be strictly conditioned. The
    decision to depart from competition must be supported by reasons
    recorded by the competent authority, and those reasons must be
    rational and capable of objective scrutiny. In administrative law, the
    insistence on reasons is a restraint on arbitrariness and a safeguard of
    transparency, and it enables effective judicial review. The requirement
    of reasons is not satisfied by broad assertions made after the event.
    Even where the order itself does not contain a detailed narration,
    the record must disclose why the ordinary rule was departed from
    and what safeguards were adopted to ensure that the departure
    did not become a vehicle for favouritism. This Court has recognised
    that, at the least, the record should disclose reasons, even if those
    reasons are brief.
17. The non production of core records such as tender documents,
    comparative statements, evaluation material, approvals, measurement
    records and vouchers raises a distinct and serious concern. The State
    is the custodian of public records and it is expected to maintain them
    in a manner that makes public expenditure traceable and accountable.
    When material records that ought to exist are not produced, the
    Court is not required to treat that circumstance as innocuous. The
    law also permits a court to draw a presumption against a party that
    withholds evidence within its power, and that principle applies with
    greater force where the custodian is the State.
18. It must also be emphasised that a physical trace of a project, by
    itself, does not answer the constitutional question. The distinction
    between physical execution and legality of the procurement process
    assumes particular importance where the State seeks to rely on the
    mere existence of completed works as a defence. One is whether
    some work was executed. The other is whether the process by which
    public money was committed and paid out was fair, competitive
    where competition was required, and free from conflict of interest.
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      Judicial review in contract matters focuses on the decision making
      process and tests it for legality and absence of arbitrariness, bias
      and mala fides.
19. For these reasons, where the material placed before the Court
    indicates repeated resort to non-competitive methods without a
    demonstrable record of reasons, or indicates gaps in the record trail
    that prevent meaningful scrutiny, the matter travels beyond a routine
    contractual grievance. Such features become relevant indicators for
    determining whether an independent investigation is required, so
    that responsibility for deviations and missing records may be fixed
    and the integrity of public procurement is secured in accordance
    with the rule of law.

      Appreciation of the record in the present case
20. The pleadings in the writ petition proceed on the basis that the
    petitioners have placed on record a list of public works, across
    multiple departments and schemes, which according to them reveals
    a sustained pattern of award of contracts and work orders to a narrow
    set of entities claimed to be closely connected with Respondent
    Nos. 4 to 6. The petitioners allege that the works were repeatedly
    awarded without an open and competitive tender process, that the
    requirement of disclosing and addressing conflicts of interest was
    bypassed, and that the procurement record does not contain the
    contemporaneous decision trail that would ordinarily demonstrate
    fairness and transparency.
21. In particular, the petitioners identify certain firms and individuals as
    forming the core of the alleged pattern. The petitioners allege that
    contracts were awarded to firms stated to be owned or controlled
    by the close family members of Respondent No. 4, who is the
    present Chief Minister of Arunachal Pradesh, and to entities stated
    to be owned by Respondent Nos. 5 and 6 and by close political
    associates. The petitioners contend that the scale and frequency of
    such awards, when viewed together, disclose a prima facie case of
    nepotism, conflict of interest and abuse of public office.
22. The petitioners further allege that a significant number of the works
    were executed through the work order system without tender, including
    works of substantial value. The petitioners assert that the work order
    method was not employed as an exception justified by genuine urgency
[2026] 5 S.C.R.                                                       15

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

     or special circumstances, but was used in a manner that displaced
     competition and facilitated repeated awards to a preferred class of
     contractors. The petitioners also contend that even where a tender
     is stated to have been issued, the contemporaneous material that
     would ordinarily support the award, including comparative statements,
     evaluation records and file notings, has not been produced.
23. The record also includes the final report filed by the CAG on
    21.07.2025 in relation to the directions arising from SLP (C) No.
    34696 of 2010. The final audit report deals with nine allegations and
    contains findings which are material for appreciating the nature of
    the issues raised before us. For example, in relation to the award
    of carriage contract work for transportation of 24,800 MT of rice
    under Sampoorna Gramin Rozgar Yojana, the audit records that
    the Department concerned did not invite tender or quotation, though
    four firms submitted offers, and the work order was issued to the
    firm selected as the lowest bidder. The audit also records that the
    proprietor of the concerned firm was Shri Jambey Tashi as alleged
    in the special leave petition, but that there was no information on
    record regarding his family relationship with Shri Dorjee Khandu. The
    audit further notes that the Department verified claims on distances
    on the basis of notifications issued by Deputy Commissioners and
    that, on cross-verification, it did not find differences between the
    contractor’s claims and the supporting records. At the same time,
    the audit records that monthly progress reports contemplated under
    the scheme guidelines were not prepared and that details for certain
    districts were not furnished, and it also notes that joint physical
    verification was undertaken in respect of a sample of works shown
    as executed.
24. More significantly, across several other allegations, the audit
    report records repeated features that have a direct bearing on
    procurement integrity and record accountability. The audit records
    multiple instances of execution of works without call of tender, and
    it repeatedly notes that the basis for selection of contractors and
    the reasons for dispensing with tender were not on record. The
    audit report also records several instances where vouchers were
    not produced, or where crucial tender-related documentation was
    stated to be unavailable. Illustratively, the audit records that for
    the NLCPR project relating to improvement and re-alignment of
    the porter track from Jang to Sulungthi, vouchers for an amount of
16                                                         [2026] 5 S.C.R.

                         Supreme Court Reports


      Rs. 107.11 lakhs were not produced, and for the NLCPR project
      relating to construction of the porter track from Nuranang to Mago,
      vouchers for an amount of Rs. 23.20 lakhs were not produced. In
      the NLCPR project relating to construction of the road from Lhou
      Nallah to Mukto CO Headquarters via Gomkeling and Serjong,
      the audit records that vouchers for an amount of Rs. 12.24 crores
      were not produced and that documents relating to comparative bid
      statements and award of work where tender notice was issued were
      not made available, resulting in the audit being unable to probe
      the award further. These are not minor clerical omissions. They
      directly affect the traceability of public expenditure and the ability
      of the audit process to verify whether procurement decisions were
      taken in accordance with law. They go to the heart of whether the
      expenditure is traceable and whether the procurement decision is
      capable of objective scrutiny.
25. The audit report similarly records that in the project relating to
    improvement and upgradation of road network in Tawang township,
    a large part of the work was executed through multiple contractors
    without call of tender and vouchers for a part of the expenditure
    were not produced. In the project relating to providing water supply
    in Tawang township, the audit records that while certain components
    were put to tender, several other components were executed without
    call of tender, and that vouchers for an amount of Rs. 273.92 lakhs
    were not made available. In the allegation relating to the corpus fund
    of Rs. 23 crores sanctioned to the Bodhi Language and Literature
    Promotional Society, the audit records that the corpus fund remained
    as a fixed deposit, but that the accrued interest amounting to several
    crores of rupees was transferred to a savings account and the audit
    could not directly confirm its utilisation due to lack of documentation
    linking expenditures to specific end uses. The audit further records
    that as per information furnished by the Registrar of Societies, the
    Society never renewed its registration after the initial registration in
    1993. In relation to the PMGSY projects, the audit report records that
    in certain projects works were executed without inviting tender by
    engaging a large number of contractors, and in certain other projects,
    although tenders were stated to have been issued and awarded, the
    relevant comparative statements or award documentation was stated
    to be unavailable, thereby disabling scrutiny of whether competition
    was fair and how the award decision was taken.
[2026] 5 S.C.R.                                                          17

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

26. The petitioners filed an additional affidavit after the CAG report was
    on record, wherein they expressly dispute and criticise parts of the
    audit conclusions. The petitioners contend that the work order system,
    even where used for so-called petty or emergent works, does not
    dispense with statutory requirements such as fair opportunity and
    recorded justification, and that the absence of tenders and the absence
    of complete records cannot be normalised as an administrative
    practice. The petitioners also contend that the audit’s reliance on joint
    physical verification cannot be treated as a substitute for verifying
    adherence to procurement norms and technical specifications, and
    that physical existence of a work does not answer questions of conflict
    of interest, distortion of competition, record tampering, or unexplained
    expenditure. The petitioners further allege that the State’s disclosure
    in its additional affidavit is incomplete, that certain works referred to
    by the petitioners were omitted, and that the State did not furnish the
    contemporaneous procurement record, including tender committee
    material, comparative statements and file findings.
27. The State of Arunachal Pradesh, in its reply, has sought to meet the
    petitioners’ case on a broad platform. The State asserts that the CAG
    is a constitutional authority and that the audit report is now within the
    domain of constitutional and legislative scrutiny. The State further
    asserts that award of works through the work order system is not
    peculiar to the respondents alleged by the petitioners, and that the
    work order system is rooted in the geographical and socio-economic
    conditions prevailing in Arunachal Pradesh. The State explains the
    process by which administrative approval and expenditure sanction
    is granted, followed by technical sanction, and states that works
    valued below Rs. 50.00 lakhs are executed on work order basis
    in terms of the statutory framework, while works above that value
    are ordinarily executed through tenders. The State relies upon the
    Arunachal Pradesh District Based Entrepreneurs and Professionals
    (Incentives, Development and Promotional) Act, 2015, including
    Section 3A, which contemplates that works costing up to Rs. 50.00
    lakhs, for which no special technical know-how is required and
    subject to the statutory conditions, may be given through work order
    without tender. The State denies that Section 3A has been violated
    and asserts that the petitioners have not placed explicit proof of such
    violation. The State also asserts that a large proportion of the works
    referred to by the petitioners were awarded through tender and that
18                                                           [2026] 5 S.C.R.

                          Supreme Court Reports


      the petition is being projected beyond the factual foundation laid by
      the petitioners themselves.
28. The State has also placed on record a compilation which it states
    has been prepared across seven major works departments, covering
    the period 01.04.2014 to 31.12.2025, and including a summary of
    tenders and work orders, and a summary of the percentage of works
    awarded to Respondent Nos. 4 to 6 or firms related to them. The
    State asserts that the share of such awards is miniscule in terms of
    both tenders and work orders and places reliance on departmental
    percentages which include figures such as 0.32 per cent and 0.07
    per cent for the Department of Power, 0.03 per cent and 0.01 per
    cent for the Public Health Engineering and Water Supply Department,
    1.03 per cent and 0.08 per cent for the Rural Works Department,
    0.79 per cent and 0.06 per cent for the Water Resource Department,
    0.80 per cent and 0.26 per cent for the Public Works Department,
    1.20 per cent and 0.00 per cent for the Department of Hydro-Power
    Development, and 0.37 per cent and 0.36 per cent for the Department
    of Urban Development.
29. Having considered the record at this stage, we find that the
    petitioners’ allegations are not confined to a mere grievance about
    the outcome of a tender. They raise issues that go to the integrity
    of public procurement and the traceability of public expenditure.
    The audit report, the petitioners’ additional affidavit, and the State’s
    replies together disclose repeated resort to non-tender methods,
    repeated absence of recorded reasons for such resort, and repeated
    non-production of vouchers and tender-related records in relation
    to high value public projects. The State’s reliance on aggregate
    percentages does not, by itself, answer the concerns arising from
    specific instances where the procurement trail is incomplete or
    absent. These are matters that require structured investigation into
    the decision-making process, the custody and availability of records,
    the reasons for deviations, the identification of beneficiaries and
    related-party links, and the ascertainment of whether any cognizable
    offences or other legal breaches are disclosed.

      Problems with the State’s arguments
30. We are unable to accept the attempt of the State to answer allegations
    of this nature by reference to broad generalities. The first response of
    the State is that the CAG is a constitutional authority and that its report
[2026] 5 S.C.R.                                                          19

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

     now lies within the domain of the Governor and the State Legislature.
     That submission proceeds on a misconception. Legislative scrutiny
     through the Public Accounts Committee is an important mechanism
     of financial accountability, but it does not displace the constitutional
     role of this Court when allegations before it implicate arbitrariness
     in public procurement, possible conflict of interest, and prima facie
     misuse of public office. The proceedings before this Court are not
     rendered infructuous merely because an audit report is also capable
     of being examined in the legislative domain. The CAG report has
     been called for and placed on record in these proceedings pursuant
     to orders of this Court, and it forms part of the material that must
     be assessed for the limited purpose of determining whether an
     independent investigation is warranted.
31. The second response of the State is to normalise the work order
    system by attributing it to the geographical and socio-economic
    conditions of Arunachal Pradesh and to rely upon the Arunachal
    Pradesh District Based Entrepreneurs and Professionals (Incentives,
    Development and Promotional) Act, 2015. We do not doubt that the
    State may, consistent with law, design procurement modalities that
    respond to local conditions. We also accept that certain works may
    be executed through work orders within the statutory framework.
    However, what is under scrutiny in these proceedings is not the
    existence of a work order system as a concept. The concern is
    the manner of its deployment in relation to public works and the
    procurement trail that accompanies it. A statutory framework permitting
    limited dispensation with tender does not authorise unstructured
    discretion. It does not dilute the requirements of Article 14. It does
    not permit repeated departures from competition without recorded
    reasons. It does not permit the State to proceed without a decision
    trail that makes the award capable of objective scrutiny, particularly
    where allegations of related-party benefit are made.
32. The third response of the State is that the petitioners have failed to
    produce “explicit proof” of violation of Section 3A of the Act of 2015.
    That submission reverses the constitutional burden. The petitioners
    are not public record custodians. The State is. The State awards
    contracts, maintains the files, sanctions expenditure, records the
    reasons for deviations, and holds the tender and work order record.
    When serious allegations of unfairness and conflict of interest arise
    and the record itself shows gaps in essential documents, the Court
20                                                           [2026] 5 S.C.R.

                          Supreme Court Reports


      cannot place the entire onus on the petitioners to establish the
      illegality by materials they do not control. At the prima facie stage,
      what is material is whether the record discloses circumstances that
      warrant an independent investigation. Missing vouchers, missing
      comparative statements, and absence of recorded reasons are not
      neutral facts. They are indicia that the State must answer and that
      require independent verification.
33. The fourth response of the State is to rely on aggregate percentages
    and to assert that the share of works awarded to Respondent Nos.
    4 to 6 or firms related to them is “minuscule”. We are not persuaded
    that such arithmetic can answer the constitutional concern. The
    Constitution does not tolerate a breach of public trust merely because
    the breach is numerically small when measured against the total
    universe of State expenditure. Even a single instance of award of
    public work through a process tainted by conflict of interest, or by
    a deliberate bypass of competition, constitutes an affront to Article
    14. A low percentage cannot become a licence. It cannot be a
    defence to nepotism. It cannot neutralise the illegality that attaches
    to an award which is not supported by a transparent process and
    contemporaneous records.
34. Moreover, the percentage argument is inherently capable of masking
    what the Court is required to examine. A Statewide denominator can
    conceal concentration within a district, concentration within a particular
    department, concentration in high-value projects, or concentration
    within a small set of contractors. Even assuming that the share is
    small in aggregate, the constitutional question remains whether
    public power has been used to confer private benefit, whether open
    competition has been displaced without justification, and whether the
    decision trail is intact. The State’s compilation, which is presented as
    a statistical answer, does not address the absence of tender records
    and vouchers noted in the audit material. It also does not answer
    why, where tender is claimed, comparative statements and related
    records are unavailable.
35. We also find it difficult to accept the State’s posture that its compliance
    is complete because it has furnished details only with reference to
    the works listed by the petitioners. The orders of this Court required
    a detailed disclosure and a transparent response on the contracts
    in issue, including those relating to Respondent Nos. 4 to 6 or firms
[2026] 5 S.C.R.                                                          21

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

     related to them, and the subsequent order clarified that the scope
     was not confined to a single district. The State cannot choose a
     narrow construction of disclosure obligations when the controversy
     concerns the integrity of public procurement. In any event, where the
     State asserts that the petition is “Tawang-centric”, it is still obliged
     to answer, with complete procurement records, how the questioned
     awards were made, why tender was dispensed with, and why essential
     documents are missing.
36. Ultimately, what emerges from the record is that the State does not
    deny that the work order system has been used extensively. The
    audit material reflects multiple instances of non-tender execution
    and missing documentation. The petitioners allege related-party
    benefit and conflict of interest. In response, the State offers broad
    justifications, invokes percentages, and disclaims comment on
    the audit report. These answers do not meet the gravity of the
    allegations. They do not restore the confidence that a matter of this
    nature requires. They reinforce the need for an investigation by an
    independent agency that can trace the decision-making process,
    locate responsibility for missing records, and examine whether the
    pattern disclosed is an outcome of lawful administration or an abuse
    of public office.

     Necessity of an independent investigation by the CBI
37. Having regard to the principles set out above and the material placed
    on record, we are satisfied that this is a fit case where an independent
    investigation is necessary. The record discloses repeated resort to
    non-tender methods in relation to public works, repeated absence
    of recorded reasons explaining why competition was dispensed
    with, and repeated non-production of vouchers and tender-related
    documentation in relation to projects of substantial value. Such
    circumstances raise legitimate concerns not merely of administrative
    irregularity but of possible abuse of public office, manipulation of
    procurement processes, and concealment or destruction of official
    records, matters which require investigation by an independent
    agency vested with statutory powers of criminal investigation. The
    petitioners further allege that a significant cluster of such awards has
    accrued to Respondent Nos. 4 to 6 or to firms and individuals related
    to them, thereby raising a serious question of conflict of interest and
    abuse of public office. These are not matters that can be left to be
22                                                            [2026] 5 S.C.R.

                          Supreme Court Reports


      answered by broad affidavits or by statistical summaries. They require
      a structured investigation into the decision-making process, the manner
      of selection of contractors, the justification for deviations from tender-
      based procurement, and the integrity and custody of public records.
38. The final report filed by the CAG has evidentiary relevance in this
    context, though it is not determinative of criminal culpability. The
    audit identifies repeated gaps in the documentary trail, including
    non-availability of vouchers and non-availability of tender evaluation
    material, and in several instances it records that it could not probe the
    award process further for want of essential records. These features,
    when read with the petitioners’ assertions of related-party benefit
    and with the State’s inability to furnish a complete contemporaneous
    procurement trail, provide a sufficient prima facie foundation for
    entrustment of investigation to an independent agency.
39. We are also mindful that the allegations in the present proceedings
    concern public contracting under the authority of the State and are
    directed, in material part, against persons who occupy, or are stated to
    be closely connected with those who occupy, high constitutional and
    political office in the State. In such circumstances, leaving the matter
    to be investigated by agencies that function under the administrative
    control of the State would raise a serious and reasonable apprehension,
    in the public mind, about institutional independence. The credibility of
    the process is as important as its eventual outcome. Where a case
    concerns the integrity of public procurement and involves allegations
    of conflict of interest at the highest levels, an investigation must be
    not only fair but must also appear fair.
40. A CAG audit is not designed to perform the role of a criminal
    investigation. An audit may verify accounts, test compliance, and
    record deficiencies. It cannot, however, conduct searches and
    seizures, trace beneficial ownership and related-party links through
    layered entities, examine the money trail, identify the persons
    responsible for custody and disappearance of files, or determine
    whether the facts disclose the commission of cognizable offences.
    These are functions that lie within the domain of an investigating
    agency empowered by law.
41. We have considered whether constitution of an SIT under the
    supervision of the State would suffice. In the facts of the present
    case, we are of the view that the nature of allegations, the institutional
[2026] 5 S.C.R.                                                          23

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

     proximity of the persons against whom allegations are made, and the
     recurring deficiencies in the procurement record make it necessary
     to entrust the investigation to an agency which is institutionally
     independent of the State executive. The CBI is the appropriate
     agency for this purpose.
42. Accordingly, we deem it appropriate that CBI shall register a preliminary
    enquiry forthwith and shall conduct a time-bound investigation into
    the award and execution of the public works contracts and work
    orders which form the subject matter of this writ petition and the
    affidavits filed in these proceedings. The investigation shall include
    examination of the procurement process, the reasons and approvals
    for dispensing with tender, the availability and custody of records
    including vouchers, comparative statements and file notings, the
    identity of beneficial owners of the contractor entities, the fund flow
    and payments made, and any other connected matter necessary to
    ascertain whether any illegality or cognizable offence is disclosed.
43. Before issuing directions for investigation, it is also necessary to
    clarify the temporal scope of the inquiry. During the course of these
    proceedings, affidavits and compilations of records were directed
    to be furnished with reference to the period 2015 to 2025, and the
    State itself has placed materials covering substantially the same
    timeframe. The allegations in the writ petition, the audit scrutiny,
    and the record placed before this Court together indicate that the
    questioned pattern of procurement practices is alleged to have
    occurred across multiple departments during this period. In order
    to ensure that the investigation is both effective and structured,
    while at the same time avoiding an unbounded or roving inquiry
    into earlier periods for which no material has been placed before
    this Court, it is appropriate that the investigation be confined to the
    period 01.01.2015 to 31.12.2025.

     Conclusion
44. For the reasons recorded above, and in exercise of the jurisdiction
    of this Court under Article 32 of the Constitution of India, the writ
    petition is disposed of with the following directions:
     I.    The Central Bureau of Investigation (CBI) shall register a
           preliminary enquiry within two weeks from the date of this
           judgment and shall proceed in accordance with law.
24                                                              [2026] 5 S.C.R.

                            Supreme Court Reports


      II.    The preliminary enquiry and the consequential investigation,
             if any, shall cover the award and execution of public works
             contracts and work orders in the State of Arunachal Pradesh for
             the period from 01.01.2015 to 31.12.2025, including the works
             and compilations placed on record in these proceedings. The
             CBI shall, in particular, examine awards made to Respondent
             Nos. 4 to 6 and to firms or individuals related to them, and shall
             examine the procurement process, the reasons and approvals for
             dispensing with open tender, the compliance with the applicable
             statutory and statutory requirements, the availability and custody
             of records, the flow of funds and payments, and such other
             connected aspects as are necessary to ascertain whether any
             illegality or cognizable offence is disclosed.
      III.   The CBI shall not be precluded from examining transactions
             outside the above period to the limited extent necessary for
             tracing beneficial ownership, related-party links, fund flows, or
             other connected circumstances that bear upon the transactions
             within the above period.
      IV.    The State of Arunachal Pradesh and all its concerned
             departments, authorities and instrumentalities shall cooperate
             fully with the CBI. They shall, within four weeks from the date
             of this judgment, make available all relevant records, including
             sanction orders, administrative approvals, technical sanctions,
             tenders, comparative statements, tender committee records,
             work orders, agreements, measurement books, bills, vouchers,
             utilisation certificates, completion certificates, and all electronic
             data relating to e-procurement and payments.
      V.     The Chief Secretary, State of Arunachal Pradesh shall, within
             one week from the date of this judgment, designate a nodal
             officer for coordination with the CBI, and each of the concerned
             departments shall also designate a nodal officer within the
             same period. The nodal officers shall ensure timely production
             of records and shall facilitate access to offices, servers and
             record rooms as may be required.
      VI.    The State of Arunachal Pradesh shall ensure that no record,
             physical or electronic, relevant to the subject matter of the
             enquiry and investigation is destroyed, altered, or rendered
             inaccessible. The Chief Secretary shall issue necessary
[2026] 5 S.C.R.                                                          25

                    Save Mon Region Federation & Anr. v.
                    The State of Arunachal Pradesh & Ors.

             directions to all concerned departments within one week from
             the date of this judgment to secure preservation of records and
             electronic logs.
     VII. The CBI shall file a status report before this Court within sixteen
          weeks from the date of this judgment.
45. We clarify that the observations made in this judgment are for
    the purposes of deciding whether an independent investigation is
    warranted. They shall not be construed as findings on the merits
    of any allegation, and they shall not prejudice any person in any
    proceedings that may arise.
46. Pending applications, if any, stand disposed of. There shall be no
    order as to costs.

     Result of the case: Directions issued.




     †
         Headnotes prepared by: Ankit Gyan