Centre For Enviornment & Food Security vs Union Of India & Ors

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;

This investigation shall be restricted to 100 villages in six

2.

districts of Orissa as spelt out in the Notification issued by

the State of Orissa dated 23rd April, 2011;

3.

The investigating agency shall refer to and take into

4.

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.

Besides issuing the above directions, we hereby also direct

10.

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

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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