CENTRE FOR ENVIRONMENT AND FOOD SECURITY Vs UNION OF INDIA AND ORS.
Bench: S.H. KAPADIA,K.S. PANICKER RADHAKRISHNAN,SWATANTER KUMAR, ,
Case number: W.P.(C) No.-000645-000645 / 2007
Diary number: 33001 / 2007
Advocates: PRASHANT BHUSHAN Vs
MILIND KUMAR
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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
implementation of the provisions of the Act, this Court, on 16th
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
pass the following directions on 16th 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
well as the State of Orissa, this Court on 14th 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.
This Court in its order dated 16th 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
copy of the letter dated 4th 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
of Government of Orissa, issued a Notification dated 23rd 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
letter of the same date, i.e. 23rd 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
(Annexure ‘A’ to the writ petition), report of the CAG dated 31st
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
the State of Orissa dated 23rd 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 31st 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
petitioner along with its rejoinder affidavit dated 21st
February, 2011 in regard to implementation of
provisions/schemes under the Act in those States.
11.
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
15
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