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Issues: (i) Whether the material on record disclosed a prima facie case warranting a direction for a CBI preliminary enquiry into the implementation and utilisation of NRHM funds throughout the State from 2005-06 onwards. (ii) Whether the Court should decline to act until the CAG report was received and whether the objection to the competence of the CBI to hold a preliminary enquiry was sustainable.
Issue (i): Whether the material on record disclosed a prima facie case warranting a direction for a CBI preliminary enquiry into the implementation and utilisation of NRHM funds throughout the State from 2005-06 onwards.
Analysis: The record contained multiple audit reports, review mission reports, finance team reports, government communications and other material indicating serious irregularities in administration, procurement, fund flow, monitoring, and utilisation of NRHM funds. The State itself did not dispute that large-scale irregularities had occurred, while the material also showed absence of effective supervision, non-reconstitution of the monitoring mechanism, non-appointment of a full-time Mission Director, and use of funds by unauthorised persons. The Court found these circumstances sufficient to justify independent enquiry by an outside agency.
Conclusion: The issue was answered in the affirmative and in favour of the petitioners; a CBI preliminary enquiry was held to be warranted.
Issue (ii): Whether the Court should decline to act until the CAG report was received and whether the objection to the competence of the CBI to hold a preliminary enquiry was sustainable.
Analysis: The Court held that the scope of CAG audit and CBI enquiry was different, and the pendency of a special audit could not prevent judicial intervention where prima facie material already existed. The objection that the CBI lacked power to conduct a preliminary enquiry was rejected in light of the statutory framework and precedent recognising such power. The Court also held that the plea of a mere roving enquiry could not prevail where the material disclosed serious administrative and financial lapses.
Conclusion: The issue was answered against the State and in favour of the petitioners; the Court refused to wait for the CAG report and upheld the direction for preliminary enquiry by the CBI.
Final Conclusion: The writ petitions were disposed of after directing an all-State CBI preliminary enquiry into NRHM implementation and fund utilisation from 2005-06 onwards, with liberty to register regular cases where cognisable offences were disclosed.
Ratio Decidendi: In a public law challenge, where reliable material discloses a prima facie case of serious administrative and financial irregularities, the High Court may direct a CBI preliminary enquiry without awaiting a parallel audit report, and the existence of a request for audit does not bar such judicial direction.
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