The Supreme Court on Monday granted four weeks to the Centre to take a clear stand regarding a CBI probe into alleged misuse of funds allocated to the States.

The court was dealing with a petition alleging misappropriation of funds under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in Orissa.

In an interim order on the writ petition filed by the Centre for Environment and Food Security, a three-Judge Bench, comprising Chief Justice (CJI) S.H. Kapadia, Justices K.S. Radhakrishnan and Swatanter Kumar, said the implementation of the MGNREGA was the core issue in the petition.

The petitioner sought the implementation of the guidelines issued by the Centre under Section 27 of the MGNREGA. The Bench, after hearing counsel Prashant Bhushan for the petitioner, Additional Solicitor General Indira Jaising for the Centre and senior counsel K.K. Venugopal for the Orissa government, said that reports from the Comptroller and Auditor-General of India and the National Institute of Rural Development cited misappropriation of funds allegedly by officials of the implementing agencies which had resulted in a diversion of the funds collected from taxpayers.

The Bench said the Union of India had admitted to the leakage of funds in some States. In the case of Orissa, “we find misappropriation of funds targeted to deprive people of scarce resources and impede the payment of their dues. If what is stated in these reports is true, than serious action needs to be taken to prevent misappropriation of the funds meant for the MGNREGA.”

Mr. Venugopal submitted that an accounts transfer system was being implemented in Orissa to make payments to the beneficiaries directly to the bank.

The State, he said, had given directions for the preparation of a muster roll (labour attendance register) of the beneficiaries of each work, based on the receipt of the work application.

During the hearing, the CJI made it clear to the States that “though the Central government has given guidelines, we are asking the States to do three things — keep records of muster rolls; applications received for work, and the money transferred to banks for payment to beneficiaries. Our order is based on Section 27 of the MGNREGA.

The Bench noted that the ASG had sought four weeks' time, stating that the Centre was pondering its stand whether the CBI was to be entrusted with the investigation .

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