IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO.645 OF 2007

Centre for Environment & Food Security … Petitioner

Versus

Union of India & Ors. … Respondents

O R D E R  

The  framers  of  the  Constitution,  in  the  Preamble  to  the  

Constitution,  guaranteed  to  secure  its  citizens  justice,  social,  

economic and political as well as equality of status and opportunity  

but the ‘right to employment’ was not incorporated in Part III of the  

Constitution as a Fundamental Right.  By judicial pronouncements,  

the courts expanded the scope of Article 21 of  the Constitution of  

India and included various facets of life as rights protected under the  

said Article despite the fact that they had not been incorporated by  

specific  language  in  Part  III  by  the  framers  of  the  Constitution.  

Judgments  of  this  Court  in  the  cases  of  Olga  Tellis v.  Bombay  

Municipal  Corporation [(1985)  3  SCC  545]  and  Narendra  Kumar

Chandla v. State of Haryana [(1994) 4 SCC 460] expanded the scope  

of Article 21 and held that ‘right to livelihood’ is integral part of the  

‘right to life’. Taking cognizance of the stark reality that majority of the  

Indian  population  (about  76%)  is  residing  in  rural  areas  and  

unemployment was the greatest challenge before any State or the  

Central  Government,  the  Parliament  decided  to  enact  a  law  to  

provide rural employment to restricted persons as stated in such law.  

This  resulted  in  enactment  of  the  National  Rural  Employment  

Guarantee Act, 2005 (for short, ‘the Act’).  As per the preamble of the  

Act,  it  was an enactment to provide for  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.   Even the object and reasons of this enactment  

demonstrate  that  objective  of  the  legislation  is  to  enhance  the  

livelihood  security  of  the  poor  households  in  rural  areas  and  the  

Government including the State Government was required to prepare  

a  scheme  to  give  effect  to  the  guarantee  proposed  under  the  

legislation.   Another  paramount  feature  of  the  Act  was  that  if  an  

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eligible applicant is not provided work as per the provisions of this  

legislation within the prescribed time limit, it will be obligatory on the  

part of the State Government to pay unemployment allowance at the  

prescribed rate.  This Act was to extend to whole of India and was to  

come  into  force  on  such  date  as  the  Central  Government  by  

notification in the official Gazette may appoint.   This Act was later  

amended by Amending Act 46 of 2009 (w.e.f. October 2, 2009) and  

titled  as  ‘Mahatma  Gandhi  National  Rural  Employment  Guarantee  

Act, 2005’.   

A  Constitution  Bench of  this  court  in  the  case of  Secretary,   

State of Karnataka v. Uma Devi [(2006) 4 SCC 1], while dealing with  

the question that the persons appointed under the provisions of the  

Act would be entitled to regular appointment, rejected the claim of the  

Respondents  for  regularisation  and  made  certain  significant  

observations which read as under :

“51. The  argument  that  the  right  to  life  protected  by  Article  21  of  the  Constitution  would include the right to employment cannot  also be accepted at this juncture. The law is  dynamic  and  our  Constitution  is  a  living  document.  May  be  at  some  future  point  of  time,  the  right  to  employment  can  also  be  brought in under the concept of right to life or  even  included  as  a  fundamental  right.  The  new statute is perhaps a beginning. As things  now stand, the acceptance of such a plea at  

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the  instance  of  the  employees  before  us  would lead to the consequence of depriving a  large  number  of  other  aspirants  of  an  opportunity  to  compete  for  the  post  or  employment. Their right to employment, if it is  a part of right to life, would stand denuded by  the  preferring  of  those  who  have  got  in  casually or those who have come through the  backdoor.  The  obligation  cast  on  the  State  under  Article  39(a)  of  the  Constitution  is  to  ensure that all citizens equally have the right  to  adequate  means  of  livelihood.  It  will  be  more consistent with that policy if  the courts  recognise  that  an  appointment  to  a  post  in  government  service  or  in  the  service  of  its  instrumentalities,  can  only  be  by  way  of  a  proper selection in the manner recognised by  the  relevant  legislation  in  the context  of  the  relevant provisions of the Constitution. In the  name of  individualising justice,  it  is  also not  possible to shut our eyes to the constitutional  scheme  and  the  right  of  the  numerous  as  against the few who are before the court. The  directive principles of State policy have also to  be reconciled with the rights available to the  citizen under Part  III  of  the Constitution and  the obligation of the State to one and all and  not  to  a  particular  group  of  citizens.  We,  therefore,  overrule  the  argument  based  on  Article 21 of the Constitution.”

Thus,  in  the  present  petition,  this  Court  has  to  examine the  

relief claimed within the provisions of the Act and the principles of law  

stated by the Court in the referred judgments.

The  present  writ  petition  had  been  instituted  by  Centre  for  

Environment and Food Security for issuance of appropriate directions  

to the respondents (Union of India and all the States were impleaded  

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as  respondents)  for  formation  of  appropriate  schemes and  proper  

utilization of funds allocated for the said purpose and to achieve the  

object  of  the  Act.  The  petitioners  claimed  to  have  carried  out  a  

survey, copy of which is annexed as ‘Annexure-A’ to the Writ Petition  

showing that neither the schemes framed under the provisions of the  

Act nor the provisions of the Act are being properly implemented. The  

funds  allocated  are  also  not  being  properly  utilized.  In  fact,  the  

allegation is that the funds are being siphoned by corrupt officials and  

officers, thereby, denying lakhs of poor people their fundamental right  

to  livelihood.  It  was,  thus,  prayed  that  the  Court  should  issue  

appropriate directions to ensure proper and equitable functioning of  

the Act and the scheme envisaged thereunder.  Further, they prayed  

that social audit of all activities undertaken and executed under the  

auspices  of  the  Act  and  the  schemes  made  therein  should  be  

conducted  properly  and  the  information  in  this  regard  should  be  

posted  on  the  website.   The  Court  should  also  formulate  some  

guidelines for paying the workers their wages in a bid to reduce the  

exchange of cash to a minimum and to ensure that transfer of funds  

to the workers is through a safe and easily traceable route. Besides  

praying for some other reliefs, prayer is also made to order CBI probe  

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or thorough inquiry by a special commission of inquiry appointed by  

the Court in the scam brought out in the said survey, particularly, with  

reference to Orissa.   

Before,  we  proceed  to  examine  the  response  of  the  

respondents and consequential directions that the Court should pass,  

it will be necessary to examine some of the relevant provisions of the  

Act. The Act mandates that the Central Council and State Councils  

should be constituted in terms of Sections 10(1) and 12 of the Act.  

Chapters II and III deal with guarantee of employment in rural areas,  

employment  guarantee  schemes  and  unemployment  allowances.  

Section  3(1)  casts  an  obligation  upon  the  State  Government  to  

provide to every household, whose adult members volunteer to do  

unskilled manual work,  employment for not  less than one hundred  

days of such work in a financial year in accordance with the scheme  

made under the Act in such rural area in the State as may be notified  

by the Central  Government.   Section 3(4)  further requires that the  

Central Government or the State Government may within the limits of  

its economic capacity and development, make provisions for securing  

work to every adult member of a household under a Scheme for any  

period beyond the period guaranteed under sub-section (1), as may  

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be expedient.  In terms of Section 4, every State Government shall,  

within  one  year  from  the  date  of  commencement  of  this  Act,  by  

notification,  make  a  scheme  for  complying  with  the  provisions  of  

Section 3.  Proviso to this Section requires that until any scheme is  

notified  by  the  State  Government,  the  Annual  Action  Plan  or  

Perspective Plan for the Sampoorna Grameen Rozgar Yojna (SGRY)  

or the National Food for Work Programme (NFFWP) shall be deemed  

to be the action plan for the scheme.  It is obligatory on the part of the  

State to  provide in  the scheme the minimum features specified in  

Schedule I.  Section 6 carves out an exception to the provisions of  

the  Minimum Wages  Act,  1948  and  the  Central  Government  has  

been empowered to specify, by notification, the wages different than  

that  Act  which  shall  not  be  at  a  rate  less  than  Rs.60/-  per  day.  

Section 7 is another important provision of the Act which requires that  

where an applicant is not given employment within 15 days of the  

receipt of his application seeking employment, he shall be entitled to  

receive daily unemployment allowance.  This allowance shall cease  

on attainment of the conditions stated in Section 7(3).  Under Section  

8(1), obligation is placed on the Programme Officer that if he is not in  

a position to disburse the unemployment allowance, in time or at all,  

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for any reason beyond his control, he is required to report the matter  

to District Programme Coordinator and to even display the same on  

the notice boards.  The Legislature, in its wisdom, has opted not to  

leave the matter at that stage but have made a provision where the  

State  Government,  under  Section  8(3),  is  required  to  take  all  

measures to make the payment of unemployment allowance to the  

concerned  household  as  expeditiously  as  possible.   Section  9  

declares the circumstances where a person would be disentitled to  

receive unemployment  allowance in  certain cases.   They are very  

restricted  circumstances  like  where  he  does  not  accept  the  

employment provided, does not report for work within fifteen days of  

being notified by the Programme Officer and continuously remains  

absent from work without obtaining a permission from the concerned  

implementing agency for a period of more than one week or remains  

absent for a total period of more than one week in any month.  Thus,  

the  scheme of  the  Act  clearly  contemplates  a  statutory  obligation  

upon  the  State  and  the  concerned  departments  to  ensure  due  

compliance of the scheme framed and, in absence thereof, to ensure  

that the provisions of the Act are adhered to.  The object of the Act is  

clear  that  the Legislature,  in unequivocal  terms,  has expressed its  

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intent  to  ensure  employment  and  payment  of  allowances  to  the  

respective household and the exception is primarily founded on the  

unwillingness of the recipient to work.   

The functions  of  the  Central  Council  have been spelt  out  in  

Section 11 while that of the State Councils in Section 12(3).  It is a  

statutory obligation on these Councils to advice the Government on  

all matters concerning the scheme and its implementation in the State  

including promotion of widest possible dissemination of information  

about  the  scheme  made  under  this  Act,  establishment  of  central  

evaluation  and  monitoring  system etc.  In  other  words,  this  whole  

machinery  has  been  set  up  to  ensure  smooth  and  effective  

implementation  of  the  provisions  of  the  Act.   Besides  constituting  

these Councils which are expected to function at higher lever,  the  

Legislature has required constitution of bodies and functionaries at  

the grass root level, i.e. District, intermediary and  Gram Panchayat  

level.   In  terms of  Section 17,  the  Gram Sabha shall  monitor  the  

execution of the work within the Gram Panchayat and there shall be  

regular social audit of all the projects under the scheme.  In terms of  

Section  19,  the  State  Government  is  required  to  make  rules  and  

determine appropriate grievance redressal mechanisms at the Block  

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and the District levels for dealing with any complaint by any person in  

respect  of  implementation  of  the  scheme.   Chapter-V  requires  

establishment of National and State employment Guarantee Funds  

and Audit.  In other words, these funds are to be created for ensuring  

the effective implementation of the schemes.  Under Section 20(2),  

the Central Government can credit, by way of grants or loans, such  

sums of money as the Central Government may consider necessary  

to the National Fund which will be utilized in such manner and subject  

to conditions, as may be provided by that Government.  The intention  

of  the  Legislature  is  that  it  wants  the  provisions  of  the  Act  to  be  

enforced and fix responsibility on the persons causing impediments in  

its execution. Those who act contrary to the provisions of the Act are  

liable to conviction and fine under Section 25 which may extend to  

Rs.1000/-.  The Central Government is further empowered to issued  

directions under Section 27 of the Act for effective implementation of  

the provisions of the Act and has powers to examine any complaint  

regarding issue or improper utilization of funds granted under this Act  

in respect of any scheme and to take remedial measures and even to  

stop  release  of  funds  to  the  scheme  in  such  condition.   The  

provisions of this Act have been given precedence and shall prevail  

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notwithstanding anything inconsistent therewith in any other law for  

the time being in force or even in any instrument having effect  by  

virtue of such law.  

The legislative scheme of  the Act clearly  places the ‘right  to  

livelihood’  at  a  higher  pedestal  than a mere legal  right.   Conjunct  

reading of the afore referred provisions of the Act demonstrates that  

the  legislature  desired  to  provide  minimum  one  hundred  days  of  

employment to one person in the family to ensure that the members  

of the family do not  starve and are able to make their ends meet with  

reference to the bare minimum requirements for existence. The Act  

provides constitution of fora and functionaries right from the higher  

levels in the Central and State Governments to the grass-root levels  

at Block and Panchayat.  The powers of the Central Government are  

very wide.   They have to ensure that  there is proper utilisation of  

funds allocated and in the event of any misappropriation or siphoning  

of such funds the Central or the State Governments shall not only to  

examine  such  complaints  but  is  commanded  by  law  to  stop  the  

financing to such scheme and take remedial measures immediately.  

Where persons are found contravening the law they are required to  

be punished in accordance with law.  Central and State Governments  

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have been vested with wide powers only with the purpose to ensure  

that  the  schemes  under  the  Act  are  implemented  appropriately,  

effectively  and  the  money  in  the  form  of  allowances  reaches  the  

poorest strata of the society.  The ones, irrespective of their stature  

in  the  hierarchy  of  the  Government,  who  are  obstructing  the  

implementation of the law needs to be dealt with and punished as per  

the provisions of the Act.

As already noticed, in the report of the survey conducted by the  

petitioner, reference to various States has been made with respect to  

malfunctioning and improper implementation of the schemes framed  

under the provisions of the Act.  Since State of Orissa is accused of  

maximum violations and complete non-adherence to the law, for the  

present, we are dealing only with the State of Orissa as a defaulting  

State while leaving the others. The allegations relate to siphoning of  

funds,  non-framing  of  guidelines  and  improper  declaration  and  

implementation of the schemes in that State. Instead of referring to  

the allegations in greater detail it will be appropriate for us to refer to  

the relevant portions of ‘Annexure-A’ to the Writ Petition which reads  

as under:

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“You  may  have  heard  about  the  loopholes and irregularities in implementation  of the National Rural Employment Guarantee  Act  (NREGA),  the  biggest  anti-poverty  scheme in the history of India.  The State of  Orissa, however, does not have any loopholes  or  irregularities in the implementation of  this  high-profile  rural  job  scheme.   In  a  random  survey conducted in 100 villages of Orissa’s 6  districts, we found only blackholes and serious  irregularities  as  the  only  regular  thing  in  all  these villages.  Our calculations suggest that  about 75 per cent of the NREGA funds spent  in Orissa have being siphoned and pocketed  by the government officials and this loot has  been very participatory and organized.

This survey was conducted during May- June  2007  by  Delhi-based  Centre  for  Environment  and  Food  Security  (CEFS)  to  access  and  evaluate  the  performance  of  National  Rural  Employment  Guarantee  Scheme (NREGS) in the state of Orissa.  The  survey was carried out in 100 villages spread  over six districts of KBK (Kalahandi-Bolangir- Koraput)  region,  namely;  Bolangir,  Nuapada,  Kalahandi,  Koraput,  Nabarangpur  and  Rayagada.

The  findings  of  CEFS  survey  are  shocking,  scandalous  and  outrageous.   The  Rural  Employment  Gurantee  Scheme  in  Orissa has been virtually hijacked by officials  responsible  for  the  implementation  of  this  scheme.  Our survey findings have revealed  that  there  is  participatory  loot,  plunder  and  pillage in Orissa’s rural job scheme.  There is  open  loot  of  taxpayers’  money,  there  is  plunder  of  poors’  right  to  guaranteed  wage  employment for 100 days and there is pillage  

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of  every  single  norm  of  democratic  governance and administrative accountability.  

It is shocking to note that we could not  find  a  single  case  where  entries  in  the  job  cards are correct  and match with the actual  number  of  workdays  physically  verified  with  the villagers.  Out of the 100 sample villages  covered for this survey, 18 villages have not  received  any job  card,  37  villages  have  not  received any job under NREGS even after 16  months of launch of the scheme, 11 villages  have received neither job cards nor any job,  Job cards of 23 villages were lying with VLWs  (Village  Level  Worker)  and  JEs  (Junior  Engineer)  for  more than 6-8 months against  the will of card holders.

In  25  villages,  only  half,  one  third  or  partial  wage  payments  were  made.   In  20  villages,  we  found  scandalous  difference  in  the number of workdays recorded in the job  cards  and  the  number  of  actual  workdays  given  to  the  workers.   There  are  3  villages  where  no  wage payments  have  been  made  even after 4-8 months of the works done.  We  found  6  villages  in  Kashipur  block  of  Rayagada  district  where  NREGS  work  was  being done without any job cards being issued  to the villagers.

As  per  the  NREGA  implementation  Status Report for the Financial Year 2006-07  (http://nrega.nic.in/state/nregampr.asp),  the  total number of job cards issued in Orissa was  2593194.   Orissa  was  able  to  provide  7.99  crore persondays of employment to 13,94,169  households  spread  over  19  districts  of  the  state.  In other words, 13,94,169 families have  got  an  average  of  57  days  of  wage  employment.   This  includes  3.93  crore  

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persondays  of  employment  provided  to  Adivasis (STs) and 1.89 crore persondays of  employment provided to Dalits (SCs).  Orissa  also claims that 1,54,118/families in the state  completed  100  days  of  wage  employment  during 2006-07.  But,  our experience in 100  villages  of  Orissa  suggests  that  all  these  claims  are  bogus  and  manufactured  only  in  official  records  in  order  to  siphon  NREGS  funds.

Our  back  of  the  envelope  calculations  suggests that less than 2 crore persondays of  employment has been provided on the ground  and  more  than  6  crore  persondays  of  employment  has  been  provided  only  in  the  pages of false job cards and fabricated muster  rolls.  We could not find a single family in the  100 sample villages who had actually got 100  days  of  wage employment.   We found  very  few families who had got 40-60 days of wage  employment.  The rest of the families, if at all  they  have  got  any  employment,  it  is  mostly  between 5 to 21 days.  However, online job  cards of most of these households have false  and fabricated job and wage entries for 108  days, 104 days, 102 days, 100 days, 96 days,  90 days, 84 days, 72 days, 65 days, 60 days,  52 days and so on.  This is the way Orissa  Government has “successfully” spent Rs.733/-  crore and provided about 8 crore persondays  of employment.

Our  back  of  the  envelope  calculations  suggest  that  out  of  Rs.733  crore  spent  in  Orissa  during  2006-7,  more  than  500  crore  has  been  siphoned  and  pocketed  by  the  government officials of executing agencies.  In  other  words,  less  than  25  per  cent  of  the  NREGS  funds  have  reached  the  targeted  

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population and more than 75 per  cent  have  been eaten up by  sarkari babus.   There are  thousands  of  villages  in  Orissa  where  more  than  80-90  per  cent  of  NREGS funds  have  been  misappropriated  by  the  executing  officials.

According to the Government of Orissa,  each of the needy households in 19 districts of  the state was given on an average 57 days of  wage  employment  under  NREGA  during  2006-7.   Our  calculations  suggest  that  only  about  5  days  of  average  employment  ahs  been  given  to  the  needy  families  in  the  19  districts  of  Orissa  where  NREGA  was  implemented  during  2006-7.  How  have  we  arrived  at  the  figure  of  5  days  of  average  employment? It is very simple.”

The State of Orissa has filed two different reply affidavits.  First  

affidavit was filed on 10th July, 2009 while the second on 29th April,  

2010.  In  these  affidavits,  the  averments  made  in  the  said  survey  

report and the Writ Petition has been denied and it is averred that the  

schemes are appropriately being implemented.  It is stated that it is  

not correct to say that 25% of the person-days have been provided  

and 75% of the person-days are only shown in paper is not at all  

correct, in view of the involvement of Palli Sabha, Gram Sabha, G.P.,  

Block  and  Zilla  Parishad as  well  as  the  district  administration  

including Collectors.  Further by creating 799 lakhs of person-days  

assets have been created like tanks, roads, plantations, forestry etc.  

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The allegation with regard to partial  wage payment, discrepancy in  

the number of working days recorded in the job cards vis-à-vis the  

number  of  actual  work  days  provided  to  the  workers  and  further  

averment  with  respect  to Kasipur block,  Raygara district  regarding  

execution of NREGS work without issuing any job-card are stated to  

be false.  It is, however admitted that for the year 2006-07 a sum of  

Rs. 890 crores was allocated and Rs. 733 crores has been utilized.  It  

is denied that any amount thereof was misappropriated.  In the latter  

affidavit attempt has been made to show as to how the suggestions  

made by the petitioner in their  affidavits in relation to social  audit,  

transparency and grievance redressal and unemployment allowances  

are  to  be  dealt  with.  Regarding  issuance  of  guidelines  for  proper  

implementation  of  the  schemes  it  was  stated  that  once  the  

operational guidelines framed by the Central Government are made  

mandatory, which are to be implemented by the State Government, it  

would tell  upon the federal  character  of  the country and the State  

Government  should  have  no  scope  to  improve  upon  the  

implementation  apparatus  by  infusing  some  innovations  during  

execution.   

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Affidavits  have  been  filed  by  the  Union  of  India  on  three  

different occasions. Union of India claims to have notified the wage  

rate in relation to different States and that rate has now been revised  

to Rs. 100/- for the States who have approached the Ministry of Rural  

Development  for  revision  of  the  same.  According  to  Central  

Government it  has been meeting the cost of implementing the Act  

since its enactment.  For strengthening the professional support  for  

transparency and accountability, the limit of administrative expenses  

has been enhanced from 4% to 6% in March, 2009.  Funds released  

to  the  State  Governments  approximately  constitute  about  70% as  

wage component and 30% as material component. In the year 2009-

10  Central  release  accounted  for  Rs.  33,506  crores  out  of  total  

available fund of Rs. 49,529 crores.  It is stated that the provisions of  

the Act are being implemented.  In the latest affidavit it is averred that  

amendments have already been made to Schedule I to the Act with  

regard to social audit to strengthen transparency and accountability.  

Instructions are stated to have been issued to the State Government  

for better implementation of the schemes and efforts are also being  

made to integrate the Management Information System (MIS) with  

the Post Office so that the amounts can be directly credited into the  

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Post Office accounts. In another affidavit reference has been made to  

various provisions of the Act and all  that is sought to be reflected  

therein, is that schemes are operating properly and matters were also  

discussed  in  the  meetings  of  the  Chief  Secretaries  and  Cabinet  

Secretaries  on  12th April  2008.  It  is  interesting  to  note  that  in  

Annexure  R-1  to  this  affidavit  it  has  been  stated  that  newspaper  

reports appearing in the Business Standard featuring allegation made  

by the petitioner NGO were obtained and it was noticed that these  

were allegations of very serious nature.  The matter was taken up  

with the Chief Secretary of Government of Orissa to constitute a High  

Level Fact Finding Committee. Director General, National Institute of  

Rural  Development,  Hyderabad  was  to  take  up  evaluation  of  

implementation performance of the schemes.   A preliminary report  

was received from the State Government which contemplated further  

enquiry at different levels.  Some reports were received and the State  

Government  was  requested  to  support  its  findings  by  facts  and  

figures. The inquiry report of Fact Finding Committee was forwarded  

by the State Government on 28th October, 2007 and on 7th December,  

2007 the State Government was reminded to indicate issue by issue  

investigation  done  which  should  reflect  the  status  on  each  issue  

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specifically. The Fact Finding Team’s report received from the field  

was submitted to the State Government but was probably incomplete.  

This  affidavit  was  filed  in  July,  2008  but  no  details  have  been  

furnished as to what transpired during the period 2007-08.   

It  is  clear  from the  affidavits  filed  on  behalf  of  the  State  of  

Orissa as well as Union of India that the allegations of the petitioner  

are  not  without  any  basis.   Extent  of  their  correctness  may  be  a  

question  to  be  examined  separately  but  the  manner  in  which  the  

affidavits have been filed on behalf of the concerned State as well as  

the Union of  India do not,  statistically,  deny the allegations as no  

figures to the contrary have been provided.  The inquiry committee  

which had been appointed for quite some time has failed to submit  

any final report to the competent authority.  The interim report which  

has been submitted with respect to the ‘action taken’ by the Union of  

India  is  again  a  matter  which  has  been  left  to  imagination  of  all  

concerned.  It is nowhere stated in these affidavits that whether, even  

a  single  officer/official,  till  today,  has  been  found  to  be  guilty  of  

contravening  the  provisions  of  the  Act  or  causing  impediments  in  

effective implementation of the schemes.  This petition itself has been  

pending since the year  2007 and the records are available to the  

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respective  respondents,  still  no  efforts  have  been  made  by  the  

concerned authorities to place on record any reports to show that the  

averments  made  by  the  petitioner  NGO in  the  Writ  Petition,  and  

particularly ‘Annexure-A’ to the same, are absolutely incorrect.

To us, from the record available, it appears that all is not well in  

the State of  Orissa with regard to implementation of  the schemes  

framed under the provisions of the Act. In the affidavit filed on behalf  

of the Union of India as well as the States, the allegations in regard to  

irregularities,  diversion  of  funds,  improper  maintenance  of  records  

and  non-implementation  of  schemes  have  been  vaguely  denied  

without  providing any specific  data  based explanation  in  response  

thereto.   The  enquiries  which  were  initiated  years  back  have  not  

culminated into any final orders or issuance of directions in regard to  

proper implementation of the schemes.  This clearly shows default on  

the part of the Union of India as well as the States in discharging their  

statutory obligation of achieving the public purpose that is sought to  

be achieved under the provisions of  the Act.  There seems to be  

serious irregularities in the effective implementation of such schemes.  

A  statutory obligation  under  the  provisions of  the  Act,  i.e.  right  to  

livelihood which has also been declared by the courts as an integral  

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part of Article 21 of the Constitution is being frustrated by the very  

functionaries  who  are  responsible  for  proper  and  effective  

implementation of the Act.    

To add to all  this,  we also need to notice that  nobody even  

appeared  on  behalf  of  State  of  Orissa,  before  the  Court  on  13th  

December, 2010, when the case was taken up for hearing.  Union of  

India  claims  to  be  releasing  funds  to  the  State  of  Orissa  for  

purposeful implementation of the schemes but has miserably failed to  

exercise its supervisory and investigative powers including the power  

to issue directions under different provisions of the Act.   From the  

affidavit filed, it is clear that there is no record to substantiate proper  

utilization of the released funds and whether or not they have been  

distributed as per the schemes or even have been diverted towards  

other expenses of the State.  It is expected of the Union of India to  

create proper check and balances by issuance of directions, framing  

of rules and issuing guidelines so that there is no contravention of the  

statutory  provisions  and  the  laudable  legislative  purpose  is  not  

defeated  by  inactions  and/or  improper  actions.   Be  it  the  State  

Government or the Union of India, accountability, transparency and  

effective implementation of the statutory scheme are the established  

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canons which would govern their action.  To implement the legislative  

intent is the primary duty of all concerned.   

In view of the above, we are constrained to observe that the  

Union of India as well as the State of Orissa, prima facie, have filed to  

effectively and purposefully implement the provisions of the Act.  This  

has  resulted  in  the  deprivation  of  the  entitled  class  from  getting  

employment and receiving the allowances due to them in terms of the  

statutory guarantees available to them under the Act.  

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.

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3. The affidavit should be filed positively within the stipulated time  

directed in this order and further we call upon both the Union of  

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.

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(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  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,  

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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  

26

of India should be stated precisely.  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.

Stand over for four weeks.  

….………….............................CJI.                 (S.H. Kapadia)

…….………….............................J.  (K.S. Panicker Radhakrishnan)

...….………….............................J.  (Swatanter Kumar)

New Delhi; December 16, 2010

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