MNREGA scam: Centre agrees to CBI probe

New Delhi: Centre has consented to CBI probe into the alleged corruption in the utilization of central funds in Orissa for implementation of its rural job guarantee scheme under MNREGA, the Supreme Court was informed on Monday.

"The consent to have investigation into the alleged misappropriation and diversion of funds for the scheme has been given by the concerned minister (of Ministry of Rural Development," Additional Solicitor General Indira Jaising told a bench headed by Chief Justice S H Kapadia.

The ASG said since the Centre has taken a decision to entrust the investigation, a notification in this regard will be issued.

Advocate Prashant Bhushan, appearing for the NGO, Centre for Environment and Food Security, which has filed a petition on the issue, said the court can direct the CBI to register an FIR.

However, the Bench asked the Centre to issue notification for the CBI probe within two weeks.

The government decided to order CBI probe as the apex court during the last hearing on March 14 had clearly said that if the centre failed to take decision within four weeks, it would step in to pass an order for CBI investigation.

Jaising placed before the bench a letter written by the Ministry of Rural Development to the CBI last week to probe the "alleged corruption and irregularities in the implementation of MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act)".

In the April 4 letter addressed to the CBI Director, the Department of Rural Development, said "it has been decided to refer the Orissa case to the CBI".

"You are requested to kindly have the matter investigated and cause to initiate criminal proceedings against the delinquent officials under the relevant laws," the letter to the CBI said asking its Director to take the case on priority.

The Court also directed the Orissa Government to file an affidavit stating as to what extent the directions of the Centre have been implemented relating to the scheme.

During the last hearing, the bench had asked the Orissa Government to tell the reasons why it has not implemented the guidelines issues by the Centre for MNREGA.

Meanwhile, over the allegation of diversion of funds in Uttar Pradesh and Madhya Pradesh, the bench said it would take up the issue in the next hearing.

The apex court was hearing a public interest litigation (PIL) filed in 2007 by the Centre for Environment and Food Security, alleging large-scale corruption in the implementation of the programme for rural job under the scheme which provides for legally-guaranteed 100 days of employment to at least one member of each rural household.

Observing that it was the money of honest tax payers which was being misappropriated, the bench also comprising Justices K S Radhakrishnan and Swatanter Kumar had warned that if the Centre fails to take a decision within the stipulated time, then it would step in.

The bench had said the reports from Comptroller and Auditor General of India (CAG) and National Institute of Rural Development (NIRD) shows there was misappropriation of funds to the tune of 88 per cent in some districts of Orissa.

"Reports of CAG as well as of NIRD shows misappropriation of funds allegedly by officials and functionaries of the implementation agencies, resulting in diversion of funds of honest tax payers of the nation," the apex court had said adding such "leakage of funds" has deprived the "beneficiaries from payment of their dues".

"We have gone through the reports of CAG and NIRD and if the reports are true then serious action is to be taken," the bench had said.

The NGO had submitted that as per the reports, there was misappropriation of funds between 53 per cent to 88 per cent in districts of Kalahandi, Keonjhar, Naurangpur, Bolangir, Raygada, Malakagiri and Koraput.

After being told by the NGO that there was also such cases in Madhya Pradesh and Uttar Pradesh, the bench said "for the time being we would focus on Orissa only. Let the Centre take decision on a CBI inquiry".

On implementation of the Act in the spirit it was meant for, the bench said direct transfer of payment to bank account or post office account of beneficiaries will certainly help.

The bench said it will take up all states one by one and beginning with Orissa since the allegations against the state are most serious ones.

The apex court had on December 16 last, while hearing the PIL, rapped both the Union and the state governments for their failure in properly executing the rural job guarantee scheme and asked them to explain as to why a CBI probe into the fund embezzlement should not be ordered.

"We are constrained to observe that the Union of India as well as the State of Orissa, prima facie, has failed to effectively and purposefully implement the provisions of the MNREG Act," the bench had observed.

"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," it had said.

Seeking their response on ordering a CBI probe, it said, "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."