Supreme Court Orders CBI Probe Into Arunachal Contract Allotments Linked To CM Pema Khandu

A Bench comprising Justices Vikram Nath, Sandeep Mehta and N. V. Anjaria passed the order while hearing a Public Interest Litigation (PIL) seeking an independent probe into alleged favouritism in the award of government contracts.

Directing time-bound action, the Court ordered that the CBI commence its preliminary enquiry within two weeks. The probe will examine the execution of public works contracts and work orders awarded between January 1, 2015 and December 31, 2025.

“CBI shall initiate a preliminary enquiry within two weeks… and file a status report before this Court within 16 weeks,” the Bench directed, adding that the agency would not be restricted from examining transactions beyond the specified period if necessary.

The Court also issued strict directions to ensure cooperation from the State government. It directed the Arunachal Pradesh government to provide full assistance to the investigating agency, designate a nodal officer for coordination, and ensure that no records are destroyed.

The order came on 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.

Appearing for the petitioners, Advocate Prashant Bhushan argued that contracts worth over ₹1,270 crore were allotted in a manner that indicated clear favouritism and conflict of interest, with the alleged knowledge and support of the Chief Minister.

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.

The matter is now slated for further consideration after the CBI submits its status report within the stipulated 16-week period.