TMI Blog2011 (11) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... d inaction. The inaction of the State and omission to take necessary steps has not only resulted in committing financial irregularities which the learned Additional Advocate General terms as financial mismanagement but also has deprived the beneficiaries of the laudable scheme which was sought to be implemented for providing medical facilities The consequence and effect of such inaction and omission on the part of the State have necessarily to be found out for which an independent enquiry by an independent agency as CBI is necessary. This would also be in consonance with the provision of Section 6-A of the CBI Act and para 9.1 of the CBI Manual that provides that where sufficient evidence is not available to register a regular case, preliminary enquiry may be conducted. We are prima facie convinced that gross irregularities - financial and administrative appear to have been committed in the execution and implementation of NRHM including the matter of award of contracts, procurement of goods, articles and etc. at various levels. We are not inclined to grant the plea of learned Additional Advocate General that we should wait for the CAG Report before considering to entrust the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBI and render full support and cooperation to CBI. The Central Government is also directed to render full support as may be asked by the CBI. We may make it clear that the allegations levelled in the instant petitions have been examined only on prima facie scale and therefore CBI may proceed to conduct preliminary enquiry independent of our observations in accordance with law. Petitions accordingly stand disposed. - PRADEEP KANT AND RITU RAJ AWASTHI, JJ. For the Petitioners : Ms. Kamini Jaiswal, Adv., Mr. Akhlesh Kalra, Adv., Mr. Prince Lenin, Adv., Mr. Gaurav Mehrotra, Adv., Mr. Nadeem Murtaza, Adv. For the Interveners : Mr. S.K. Dholakia, Sr. Adv.,Dr. L.P. Mishra, Adv., Mr. Sandeep Dixit, Adv., Mr. Dwijendra Mishra, Adv. For the Respondents: Mr. J.N. Mathur, Sr. Adv., Additional Advocate General, Dr. Ashok Nigam, Sr. Adv., Additional Solicitor General, Mr. Vivek Tankha, Sr. Adv., Additional Solicitor General, Mr. I.H. Farooqui, Adv., Assistant Solicitor General, Mr. D.K. Upadhyaya, Adv., Chief Standing Counsel, Mr. Bireshwar Nath, Adv., Mr. Neerav Chitravanshi, Adv., Mr. Vishal Verma, Adv. JUDGMENT Pradeep Kant, J. 1. These writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examine the allegations levelled. The NRHM was launched on 12.4.2005 with a view to provide accessible, adequate, affordable, accountable and reliable health care to all persons particularly the vulnerable people residing in remote areas. A Memorandum of Understanding (MoU) was entered into between the Government of India and Government of Uttar Pradesh to this effect on 22.11.2006. This MoU governs the implementation of the Mission in the State. Consistent with its objectives it envisages decentralised system of administration fastening on the State the responsibility of administration of the Mission whereas substantial resources were to be provided by the Union Ministry of Health Family Welfare (MoH FW) in contribution with the State. 4. The implementation of NRHM in the State is to be under the overall guidance and supervision of the State Health Mission constituted as per G.O. dated 16.11.2006 with Chief Minister as its ex-officio Chairperson. The State Health Society registered under the Societies Registration Act was constituted by merging all existing state level health societies on 21.2.2007 to carry out functions of the Mission in an additional managerial capacit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f NRHM funds to implementation agencies and also acts as a Secretariat of State Health Mission. 9. According to sub-clause 1(B) of clause B of the bye-laws of the Society, all powers pertaining to release of funds for implementation of plans/allocations which have been approved by the Governing Body/Executive Committee have been vested in the Mission Director. 10. The bye-laws prescribe that funds are to be released on the basis of written authorization from the Executive Committee of the Society though all cheques to be signed by two authorized signatories of the Society Secretariat. If releases are made through e-banking procedures, the electronic authorization ought to be executed by the same two authorized signatories of the Society Secretariat on the basis of written authorization in this behalf. 11. So far as procurement of goods and articles for NRHM is concerned, clause A of the bye-laws provide that such procurement would be as per (1) rate contracts (R.C.) of the Director-General, Supply and Disposables (DGS D) failing which, (2) rate contracts of other Government of India agencies failing which, (3) rate contract approved by the Government of U.P. failing whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constituted by order of the Government dated 16.11.2006. Implementation agencies, such as the State Health Society, the District Health Mission, the District Health Society, and the Rogi Kalyan Samiti were contemplated by series of Government Orders dated 16.11.2006. Meanwhile, fresh elections to the Assembly were held and the present Government came to power in the State on 13.5.2007. Subsequently, the Government annulled the merger of the aforesaid departments and restored the erstwhile bifurcated departments i.e. Department of Medical Health and Department of Family Welfare. It did not reconstitute the State Health Mission nor nominated the public representatives, such as, Members of Parliament, Members of Legislative Assemblies, Members of other local urban bodies and such other persons required to be nominated by the State Government. Hence it did not convene any meeting to supervise, monitor and guide the implementation of the Mission in the State which it was otherwise required to do i.e. to meet at least once every six months for this purpose. There is also nothing on record to show if any meetings took place even before the year 2007, though it has been said that the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled a co-ordinate bench of this Court at Allahabad to observe in its interim order dated 12.1.2011 in un-numbered paragraph 5 of Writ (A) No. 72397 of 2010 (Dr. Gangaram v. State of U.P.) that, number of writ petitions are being filed in the Court, challenging the arbitrary action of the State Government to pick and choose Level-4 Medical Officers to man [the] post of Chief Medical Officers. Though the State Government may give the important posts in the Medical and Health Department, to Level-4 Medical Officers, the issue of discrimination becomes apparent when [...] junior officers are appointed on these posts. Hence this Court directed that rule of seniority be strictly adhered to while making such appointments. 18. By another Government Order dated 20.8.2010, the responsibilities of Chief Medical Officer and District Project Officer/Deputy District Project Officer were demarcated. By virtue of the aforesaid order of the Government, the responsibility of keeping the accounts of expenditure related to NRHM was vested in District Project Officer alongwith the power to draw funds received for NRHM from Central Government according to budgetary heads of Family Welfare programm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r publicity, medical kits and medicines, modular OTs (by diverting budget for construction) was allotted to firms of one Sri Saurabh Jain, namely, M/s. Siddhi Traders and M/s. Guru Kripa Enterprises. Complete advances were released but no work is alleged to have been done. Similarly, immunization cards were procured at the cost of ₹ 18/- per piece which could not have costed more than ₹ 2.00 per piece. The sample of immunization card is on record. 20. Capricious decisions were said to have been taken in Executive Committee meetings in choosing agencies to get the required work done. Referring to an instance, where in a meeting on 13.7.2010 it was decided to get work done by PACCFED. Whereas, in another meeting on 12.8.2010, it was decided to get the work done from U.P.P.C.L. The reason behind change of agency was that U.P.P.C.L.'s performance was then satisfactory; though this decision was again reversed on 13.10.2010 and the same work was again allotted to PACCFED, which was found earlier to be relatively unsatisfactory. Meanwhile, sum of ₹ 87.16 crore was remitted to U.P.P.C.L. 21. The Minister's involvement in misappropriating funds for particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment in this context and the reply of State Government to this effect including various reports of the Common Review Mission (CRM), Joint Review Missions (JRM), Report of Regional Evaluation Team, independent studies conducted in the implementation of NRHM in the State of U.P. 24. In addition, the petitioners submitted that murders of two Chief Medical Officers, namely, Dr. V.K. Arya, Dr. B.P. Singh and mysterious death of Dr. Y.S. Sachan in jail, admittedly relating to abuse of NRHM funds shows the gravity of the situation and the attitude of the State functionaries who conspired and took decisions at the highest level clearly to impress themselves with tangible benefits. 25. Further, the aforesaid facts coupled with instances where a person acted as the Chairperson, Co-Chairperson as well as Convenor of the Executive Committee of the State Health Society by virtue of him being a Principal Secretary of Health Family Welfare and even operated the NRHM funds without any authorisation is nothing but a glaring example of arbitrariness of State action and deliberate designed approach towards public institutions and public money facilitating diversion/siphoning of NRHM funds. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 29.7.2011 wherein charge-sheet has also been issued. 28. Submitting on behalf of the State, he prayed that pending CAG Report, there is no material on record to indicate prima facie commission of any cognisable offence thereof to entrust the matter at this stage to CBI which is an investigation agency to conduct a roving enquiry in the whole of the State merely on the basis of Visit Report of the Central Government and certain other material or newspaper reports. His plea is that the Court should consider entrusting the matter to CBI only after receipt of CAG Report. Placing reliance on Secretary, Minor Irrigation Rural Engineering Services, U.P. (supra) he further stated in this regard, that pending CAG Report, it would be difficult for this Court to come to a definite conclusion that there is a prima face case established to direct an inquiry and accordingly draw terms of reference for the CBI to conduct an enquiry into the affairs of NRHM. 29. An objection has also been raised by the State against the prayer of the petitioners for CBI enquiry on the ground that the CBI does not have the jurisdiction to conduct an enquiry into a department of State Government. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold preliminary inquiry into the matter and register a regular case thereafter in case any cognizable offence is made out; M.C. Mehta v. Union of India, (2003) 8 SCC 706 (Taj Heritage Corridor case) wherein after consideration of material on record, the Supreme Court directed enquiry by CBI and subsequently on the basis of the enquiry report directed inter alia investigation by CBI; and Centre for Environment and Food Security v. Union of India, (2011) 5 SCC 668 where the Apex Court considering grave irregularities in the implementation of the MNREGA in State of Orissa directed complete investigation by CBI. 32. As regards, the competence of CBI to conduct a preliminary enquiry, Sri Akhilesh Kalra, learned counsel for the petitioner and Sri Vivek Tankha, learned Additional Solicitor General also relied on two decisions of the Apex Court in Shashikant v. CBI, JT 2006 (9) SC 603 and Nirmal Singh Kahlon v. State of Punjab, (2009) 1 SCC 441 wherein it has been categorically observed that the CBI has the power to hold preliminary enquiry and thereafter to register FIR if prima facie case is made out. 33. Learned Additional Advocate General, in response argued that CBI Manual on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s therefore dismissed. 37. At this stage, we deem it appropriate to clarify that the meaning attached to the expression inquiry in the Cr.P.C. is only contextual to Cr.P.C. and not universal. In appropriate cases, the police not only have the power to hold inquiry but also a duty to conduct inquiry or even preliminary inquiry. There are several decisions of the Apex Court in this respect. Reference for example may be made to Rajinder Singh Katoch v. Chandigarh Admn., (2007) 10 SCC 69. 38. Dwelling further, three impleadment applications were moved. First by one Sri B.K. Singh Parmar, Advocate alleging dose link of one of the petitioner with another political party and for such reason he terms the prayer of the aforesaid petitioner to have been cleverly made so as to exclude the period covered under the regime of the previous Government. He therefore submits that the direction for enquiry be issued from the year 2005-06 instead of the year 2007-08 since funds to the tune of ₹ 873.30 crores and ₹ 985.34 crores were, in fact, sanctioned by the Central Government in the year 2005-06 as is apparent from paragraph 14 of the counter-affidavit filed by the Mission Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be received from various Chief Medical Officers. 43. We have given each party a patient and considerate hearing and considered the material placed on record. We did not find expedient to grant impleadment to the aforesaid applicants though we have heard them as interveners. So far as Sri Saurabh Jain is concerned, we have already given him due hearing and proceed to consider the matter in accordance with the averments made by him in regard to the amount of the contracts given to him as it would be expedient here to clarify that the actual amount for which the contracts were given to these firms is not very material at this stage but it is the manner and procedure which was adopted in doing so and also their execution, which is the subject matter of consideration. 44. The reports placed before us including the observations in the reports extracted below, as they are, highlight two aspects so far as implementation of NRHM in the State is concerned; first, the general administration by the State functionaries and second, the financial administration and utilization of NRHM funds. To elaborate on the first part: Common Review Missions have been held yearly to monitor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iest. Biometrical waste disposal systems to be put in place particularly at FRUs. Maternal death audits needs to be initiated. Village Health Sanitation Committee need to be strengthened. The State should implement the customised version of Tally ERP 9 at the state and district level within the prescribed timeline. Regular uploading of financial data on HMIS portal should be done. Urgent steps required for filling up positions of district and block level account managers and annual training programme of finance personnel should be made. 45. The Reports of the Joint Review Missions undertaken yearly to review the Reproductive and Child Health (RCH) component of NRHM have been brought on record. Key recommendations are below: (i) First JRM - February 14 to March 1, 2006: Recruitment process of professionals required to be activated. State level society mechanism still being predominantly used for maintaining bank account outside the government system. States need to utilize the cap of 6% of approved PIP for Programme Management costs. With regard to financial reporting the States need to ensure a system of monthly reporting of expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lines issued in December 2006 on financial, accounting, auditing, funds flow and banking arrangement at State and district yet to be implemented. Financial management indicators were not being compiled regularly. Financial staff is not trained. (v) Sixth JRM - May 25-29, 2009 In general doctors and paramedics were keen on providing services to beneficiaries; however output was not satisfactory. At some of the facilities it was found that, though new equipment are in place, they are not being used in absence of trained personnel. Basic equipment for assisted delivery at District Hospital, CHC and 24 x 7 PHCs and even at Medical College Hospital were very out-dated and not in working condition. Some labour rooms did not have new-born corner with resuscitation facilities, moreover, available equipment had not been kept inside the labour room. There appears to be lack of centralised equipment maintenance and management system. Referral services were mostly not available in the State; moreover, referral had not been seen as key priority. Ambulances were available at few CHCs, however not frequently used. District Accounts Managers have been re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emains vacant. District Health Society (DHS): 50 District Accounts Managers (DAM) out of 71 DHS have been positioned and 21 remains vacant. Almost 30% of the DAM's posts at Districts remain vacant. Block Level: The State Finance Division needs to monitor and fill up the vacancies of the block accountants on a regular basis through a concerted effort. Block Accountant positions were vacant in 390 out of total 820 blocks, (nearly 50%). No Governing Body meeting has been held during the Financial Years 2009-10 and 2010-11. Irregularity noticed in payments made for Civil contracts: As per the MoU ith U.P. Processing Construction Co-operative Federation Ltd., U.P.C.L., it was been mentioned in the agreement papers that the release of funds would be as per the terms that 75% of the cost of the standard estimate would be released after agreement and remaining 25% of the standard estimate only after receipt of UCs [Utilisation Certificates] for 50% of the work completed and details of work wise estimate. However, 100% of the amount was released before completion of the work. The State DG (FW) office was not monitoring fund utilisation. No documents could be shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly in the State's reply to the Management letter. The State is releasing funds to all revenue villages for untied funds. There are VHSCs where the numbers of revenue villages associated are five or more. This in effect has meant that funds of ₹ 50,000 (₹ 10,000 x 5) are now available as untied funds with some VHSCs annually. This substantial sum coupled with slow utilisation means that large funds are available at village level without sufficient monitoring of their utilisation. Numerous instances of cash books, ledgers, advance registers, fixed assets registers, bank reconciliation statements not being maintained or updated have been noticed during the visit to districts, blocks and sub-centres/villages. Internal controls governing release of funds, preservation of vouchers and bills there against, and to prevent diversion of funds needs to be strengthened. 47. In the second visit of the Finance Team during 10-15.5.2011, the inspection was carried out in State Headquarters and districts, namely, Faizabad, Rai Bareilly, Unnao, Hardoi, Mirzapur, Chandouli, Sonbhadra, Sitapur, Kanpur Dehat, Barabanki, Sultanpur and Lucknow. Few observations are as b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RKS accounts which was an incorrect practice. 48. In this regard, the Report of the Director of Audit Account, Government of U.P. dated 4.7.2011 conducted in the office of Director-General, Family Welfare was also placed by Ms. Kamini Jaiswal before us. His findings are as below: Funds amounting to ₹ 1,25,75,78,910.00 were found unutilized; Advances amounting to ₹ 81,04,41,000.00 being disbursed for supply of medicines and other material without assessing the capacity of the firms to supply the required material which were in fact not supplied; Financial approval of ₹ 353.71 crore was not given and therefore State could not fulfill its commitment of State share in the Mission. Utilization certificate of amount of ₹ 25,81,07,380.00 could not be obtained from the districts; advances of ₹ 2,79,75,95.223 were not adjusted; Firm was endowed to do work was changed inadvertently without assigning any cogent reason after payment of advances to the tune of ₹ 89 crore. Contract for supply of furniture and equipment to the tune of ₹ 8.10 crore was given to a firm without inviting tenders which resulted in loss to the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystem of internal control system commenurate with size and nature of the business exists in the project. Internal Control Procedure: The system of internal control procedures in respect of transfer of funds, issuance of guidelines for utilisation of funds by H.O., payments of advances and its adjustments at the districts, submission of timely SOEs by the districts, monitoring of outstanding advances and periodical reconciliation etc. are not in commensurate with size and nature of the business of the organization and needs to be strengthened for effective monitoring and control. Management Letter: Frequent change in DDO is made due to transfer of CMO and Dy. CMO (RCH). Charge is handed over and taken over only on cash book, meaning thereby charge of assets viz. stores, furniture etc. are not handed over to the new comer. Procurement: Procurement of furniture, equipment, books consumables have done generally by obtaining quotations from at least three suppliers and preparing comparative chart of the solicited quotations. (iii) Year 2007-08 Minutes books of purchase committee not maintained properly. Payment through Cheque--JSY: In case of payments of incentive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entary counter-affidavit of Union of India. The main findings in the report of the year 2009-10 are quoted below: Report of districts--Unnao, Bijnaur, Kannauj, Sultanpur, Auraiya, Ghazipur, Jalaun, Balrampur, Aligarh and Kanpur Nagar: Human Resources: Post of multipurpose worker (male) vacant at most of the SCs in Aligarh, Balrampur, Kanpur Nagar districts. Specialists at CHC Chhibramau in Kannauj district. Regular driver at PHC Balrampur district. RKS VHSC: Guidance required for smooth functioning of RKS at PHC level in 4 out of 10 visited districts. No VHSC meeting organised after June 2008. Meeting of RKS held irregularly at DH in Ghajipur and was non-functional at CHCs and PHCs. Untied Funds: ANM in Ghazipur not properly guided for utilization of untied funds. No expenditure reported by CHCs/PHCs/SCs in time in Jalaun Aligarh districts. Funds not utilized in a few of the SCs in Aligarh Kanpur Nagar. Due to non-submission of utilization certificates for last two years, the centres in Ghajipur districts were not given fund in 2008-09. In Jalaun district, 55% of the allocated fund utilized till December 2008. Report of districts--Etawah, Etah, Ghaziabad, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se issued by Chief Minister Information Centre, Information and Public Relations Department, Uttar Pradesh dated 7.4.2011 placed before us by the petitioners. The relevant portion is quoted below: 52. None of the parties including the State dispute that siphoning of funds and irregularities have been committed in the implementation of NRHM in Uttar Pradesh. Though the learned Additional Advocate General puts it as financial mismanagement; but he did not throw any light on the context and use of the expression in the present set of facts and circumstances. It is also not disputed that State Health Mission was not reconstituted nor the fact that the Executive Committee took all the decisions concerning implementation of the Mission without any approval being accorded to such decisions by the Governing Body and that no full time Mission Director had been appointed during all such period and that the Principal Secretary and certain other officers/officials acted as the Mission Director and disbursed and operated the NRHM funds from time to time without any due authorisation. It is also not on record whether any meeting of State Health Mission was ever held, even if it was const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies that have been committed in utilisation of the NRHM funds and implementation of the Mission. 57. We do not find it necessary to enter into the niceties of the visit report aforesaid considering that it is a report on sample survey and also in view of the material brought on record otherwise. 58. Learned Additional Solicitor General also drew our attention to para. 11.1 of the MoU which underlines the State Government's commitments. The clause is quoted below: 11.1 The State Government commits to ensure that the funds made available to support the agreed State Sector PIP under this MoU are: (a) used for financing the agreed State Sector PIP in accordance with general financing schedule and not used to substitute routine expenditures which is the responsibility of the State Government. (b) kept intact and not diverted for meeting ways and means crisis. 59. Relying on the above-quoted clause from the MoU, learned Additional Solicitor General stated that (1) the MoU has been entered into between the Government of India and Government of Uttar Pradesh and not the State Health Society or such other entity envisaged in the MoU; (2) the MoU envisages the prima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the MoU which governs the implementation of NRHM in the State was entered into with the State and not with the State Health Society or any other body which is only an implantation agency of the whole Mission. The Chief Minister was designated the ex-officio Chairperson whereas Minister, Health Family Welfare was the ex-officio Co-Chairperson of the State Health Mission only to ensure that the whole system remains under his/her vision and check, so that the objectives sought to be achieved by the introduction of NRHM is not lost due to administrative turbulence. Undoubtedly, paragraph 11.1 puts the duty on the state to monitor the utilization of funds and progress of the Mission in the State. The involvement of the State in the implementation of the Mission so far as the State itself is concerned cannot be ousted. The Reports on record including those extracted above and the Press Release of the State highlight the irregularities and the manner in which affairs of NRHM have been dealt with which has led the two Ministers tender their resignation. The resignation of the Ministers underlines the adverse state of affairs in the implementation of NRHM of which fact the Ministers wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been appointed. Letting an officer operate NRHM funds which he was not otherwise authorised speaks volumes about the manner in which NRHM was sought to be implemented in the State which establishes that the funds were allowed to be dealt with by unauthorised persons. 68. More so, Sri Jagdish Narain Shukla, petitioner appearing in person in one of the writ petitions submitted that though the State is pressing that CAG Report be obtained before entrusting the matter to CBI but it has not been able even to protect the record relating to NRHM. He brought to our notice instance at Agra where NRHM records were burnt and then again theft of some articles occurred at Godown of Department of Health at Lucknow against which FIR was also registered though we had requested the Chief Secretary in the meanwhile to issue necessary instructions to protect the records. 69. Considering the facts and circumstances of the present case, it is painful to see that a scheme meant for providing quality health services has taken the lives of three CMOs, the affairs of which prima facie appear to have been handled in such a manner which suffers from gross inaction and omissions wherein public money ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l irregularities committed in the office of CMO, Lucknow all in relation to irregularities in NRHM are already being investigated by the CBI pursuant to the orders of this Court with the consent of the State Government. 74. The facts and circumstances, aforesaid make out a case for reference to CBI for making a preliminary enquiry in the affairs of NRHM in the entire State of U.P. right from the very inception of the NRHM. We, therefore, direct the Director, CBI to conduct a preliminary enquiry in the matter of execution and implementation of the NRHM and utilization of funds at various levels during such implementation in the entire State of U.P. and register regular case in respect of persons against whom prima facie cognizable offence is made out and proceed in accordance with law. The preliminary enquiry shall be conducted from the period commencing year 2005-06 till date. It is directed that the inquiry be completed within four months. The State Government is directed to hand over and make available all the records as may be required by the CBI and render full support and cooperation to CBI. The Central Government is also directed to render full support as may be asked by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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