Supreme Court monitored the CBI probe into allegations of irregularities in public contract allotments involving Arunachal Pradesh CM Pema Khandu’s family

The Supreme Court on Monday resumed monitoring the CBI investigation into allegations of irregularities and corruption in the allotment of public contracts in Arunachal Pradesh involving Chief Minister Pema Khandu and his family.

The bench of Justices Vikram Nath and Sandeep Mehta was hearing a miscellaneous application concerning compliance with the Court’s earlier directions in the matter.


Solicitor General Tushar Mehta, appearing for the Arunachal Pradesh government, sought a week’s time to place the State’s position on record.

The Court asked whether the Chief Secretary and Home Secretary, whose presence had been directed earlier, were present. Mehta confirmed that the officers were present.

During the hearing, the Supreme Court also issued notice in another plea raising similar allegations of corruption against the Arunachal Pradesh government.

The Court observed that the matter was being considered as a miscellaneous application in the nature of contempt, concerning alleged non-compliance with its earlier directions.

Mehta assured the Court that the State would be able to satisfy it that the directions had been complied with in letter and spirit.

The Court granted two weeks to file a reply.

Another counsel appearing for the State informed the Court that 17 trunks containing documents had been handed over to the CBI.

The Court directed the State to file an affidavit and asked the CBI to confirm whether it had received the entire material.

Senior Advocate Prashant Bhushan, appearing in the matter, questioned whether the material already examined by the CBI during its preliminary enquiry was not sufficient to register a regular case.

The Court, however, declined to make any observation at this stage, stating that the issue would have to be addressed by the CBI after receiving and examining the documents.

Bhushan further submitted that he had been informed, though he could not confirm the information, that the State government had supplied the CBI with documents relating to all public contracts, rather than only those contracts allegedly awarded to members of Khandu’s family.

He expressed concern that providing such a large volume of material could make the CBI’s task more difficult, while clarifying that his concern was primarily regarding delay in the investigation.

The Court remarked that the State had provided more documents than were required and said there was no reason for concern, adding that the CBI might even find other irregularities in the material.

Bhushan reiterated that his concern was only about delay in the investigation.

In its order, the Court recorded that the Solicitor General had sought two weeks’ time to file a counter-affidavit.

The matter will be taken up thereafter.

In April, the Court had directed the Central Bureau of Investigation (CBI) to initiate a preliminary enquiry into allegations of irregular allotment of public works contracts in Arunachal Pradesh to firms linked to relatives of Chief Minister Pema Khandu.

The Court was hearing a PIL filed by the Save Mon Region Federation and Voluntary Arunachal Sena, which alleged that large-scale public contracts were awarded to firms owned by or linked to the Chief Minister’s family members and close associates.

Background

The petition specifically named firms such as M/s Brand Eagles, reportedly owned by Khandu’s spouse, and M/s Alliance Trading Co., linked to his nephew Tsering Tashi, an MLA from Tawang district. It was alleged that these entities received multiple contracts in violation of established tendering norms and statutory provisions, including those under the Prevention of Corruption Act.

The plea further claimed that similar practices dated back to the tenure of Khandu’s father, late Dorjee Khandu, when contracts were allegedly awarded to family-linked entities without due process.

According to the petitioners, development projects worth approximately ₹1,245 crore were allotted through tenders, with an additional ₹25 crore issued as work orders, raising concerns over transparency and adherence to procurement rules.

The Supreme Court had earlier, in March 2025, sought responses from the Union Ministries of Home Affairs and Finance, asking them to clarify the process and legality of the contract allocations. It had also taken note of the Code of Conduct for Ministers, which prohibits public officials from granting undue advantage to relatives.

The Bench’s latest order signals a significant step toward scrutinising allegations of nepotism and corruption in public procurement. By directing a CBI probe, the Court has underscored the need for transparency and accountability in the award of government contracts.

Notably, on February 17, the bench had reserved its order on a plea seeking a CBI probe into the alleged award of public contracts to firms linked to the family members of Pema Khandu. The bench had heard submissions from Advocate Prashant Bhushan, appearing for petitioner NGOs, who relied on a state affidavit to argue that contracts worth around ₹1,270 crore were awarded over the last decade to four firms allegedly linked to the Chief Minister’s family.

Bhushan had contended that these firms accounted for nearly 3% of the total value of contracts awarded in the state between 2015 and 2025, raising concerns of conflict of interest and corruption. He had argued that an independent probe by the Central Bureau of Investigation was necessary, claiming the state police would not be able to conduct a fair investigation. The State, however, opposed the plea, terming it a “sponsored litigation.” The Court had permitted parties to file written submissions within two weeks.

Case Title: Save Mon Region Federation And Anr v. The State Of Arunachal Pradesh And Ors.

Bench: Justices Vikram Nath and Sandeep Mehta

Hearing Date: August 24, 2026

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