On February 17, the Supreme Court reserved judgment in a public interest litigation seeking a Special Investigation Team (SIT) probe into alleged irregular award of public contracts in Arunachal Pradesh.
A Bench of Justice Vikram Nath and Justice Sandeep Mehta heard submissions from Advocate Prashant Bhushan for the petitioners and reserved orders.
Allegations of Contract Irregularities
The petitioners allege that the State awarded contracts to firms linked to Chief Minister Pema Khandu, his spouse, mother, and nephew. They claim nearly 15 firms are directly or indirectly associated with him.
Bhushan submitted that authorities awarded 31 contracts worth ₹188 crores to ‘Brand Eagles’ over 11 years. He stated that the firm belongs to the Chief Minister’s wife. Of these works, 15 were through tender and 16 through work orders.
He further submitted that ‘Frontier Associates’, allegedly owned by the Chief Minister, received 91 contracts over 13 years worth ₹145 crores. Authorities awarded 57 through tender and 39 through work orders.
Bhushan argued that the pattern warrants investigation by the Central Bureau of Investigation. He submitted that the situation “reeks of corruption.”
Scope of State’s Affidavit
Senior Advocate Rauf Rahim, appearing for the State, pointed out that the Court had earlier limited scrutiny to contracts awarded between 2015 and 2025.
Bhushan referred to the State’s latest affidavit. He said it covered only four firms — Brand Eagle, Frontier Associates, Alliance Trading, and RD Construction — although the petition mentioned more than 10 linked firms.
According to him, contracts worth ₹1245 crores were awarded in the past 10 years to these four firms. He also claimed that authorities issued 322 works through work orders amounting to ₹25 crores.
He stated that contracts worth about ₹1270 crores were awarded in the last decade to these firms. This accounts for roughly 3% of the total contract value in the State during that period.
Bhushan cited instances where RD Construction and Brand Eagles were the only bidders. In one case, authorities awarded a ₹480 lakh road contract to RD Construction with a minimal difference between bids.
Alleged Violations of Tender Norms
Bhushan argued that authorities issued several work orders without tender even before the 2020 amendment that permitted such allotments for works up to ₹50 lakhs.
He also referred to a 2018 amendment. It restricts firms from holding more than three works at a time. He urged the Court to examine compliance with this rule.
The petition seeks investigation into:
- Whether the firms are directly related to the Chief Minister.
- Whether authorities disclosed such relationships while awarding tenders.
- Whether bidders were related to each other and whether PMLA provisions were invoked where required.
- Whether contracts were awarded at normal market rates.
- Whether works were completed as per tender conditions.
Background
The petitioners approached the Court in 2024. They alleged favoritism in awarding public works to firms linked to the Chief Minister’s family, including ‘M/s Brand Eagles’.
They also alleged that Tsering Tashi, MLA from Tawang district and owner of M/s Alliance Trading Co., received contracts without due process.
The petition seeks either a CBI probe or an SIT investigation.
The Court issued notice in January 2024. In March 2025, it directed the Ministry of Home Affairs, the Ministry of Finance, and the State government to file detailed responses.
In 2024, the Court also called for a Comptroller and Auditor General report in a separate matter concerning late Dorjee Khandu. That case involved similar allegations of contracts awarded to family-linked firms.
During a hearing in March last year, then Chief Justice Sanjiv Khanna noted that the CAG report referred to the Code of Conduct framed by the Ministry of Home Affairs. The Code states that ministers must not grant undue advantage to relatives.
The case is titled Save Mon Region Federation and Anr v. The State of Arunachal Pradesh and Ors.
