Srinagar: Amid mounting pressure and allegations of favouritism, Jammu and Kashmir governor Satya Pal Malik has scrapped the controversial Group Medical Insurance contract for state employees that was awarded to Reliance General Insurance Company (RGIC) less than a month ago.Stating that the deal was “full of frauds”, the governor talked about the involvement of some top state officials in pushing the deal through in a “hush-hush manner” and stated that those found to be involved won’t be spared. The cancellation of the contract led to the demand for a high-level probe to find those involved in the fraud.‘Bungling…cancelled in a minute’The governor didn’t mince words, saying that “some bungling” had come to the fore in the award of the contract to Reliance. “Employees wanted it to be cancelled. There was some bungling. I read the entire file and when I reached the conclusion that something is wrong, it did not take me a minute to cancel it,” Malik told reporters on the sidelines of a function in the summer capital of Srinagar.The expensive contract was finalised and allotted in “haste” on October 1, despite strong opposition from state employees-led by the powerful secretariat employees’ union. The Wire had reported on the controversy after the employees’ bodies knocked on the doors of Raj Bhavan and approached the state finance department, demanding that the contract be cancelled.“We have cancelled it (the contract) now…I can’t reveal everything to you at this point, but there are officials involved in it and they will be punished,” said the outspoken governor, known for making statements on controversial issues.Growing opposition forced reviewWhile the governor had cleared the contract with RGIC while chairing the state administrative council on August 31, a senior official said Raj Bhavan had sought all the details about the deal after the decision courted controversy following vociferous opposition from different quarters.Approved at a premium of Rs 8,776 for employees and 22,228 for pensioners, the contract was allotted for a period of one year, to begin with. While J&K has around 4.5 lakh employees, the number of pensioners varies from 1 to 1.25 lakh persons.The policy was initially notified for implementation this February, but two months later, the then People’s Democratic Party-Bharatiya Janata Party government shelved it without citing any reasons. When the state came under governor’s rule on June 19, then governor N.N. Vohra also didn’t take any decision on it.Also read: Why Mandatory Reliance Health Insurance for Employees is Raising Eyebrows in J&KSoon after its implementation, several loopholes were pointed out in the contract. It came to the fore that the government had “deviated” from set practice, and instead of floating the tender online and giving it wide publicity, it allowed advertisement through a broker, M/S Trinity Reinsurance Brokers Ltd, in some newspapers.Another clause in the original tender – that companies which enter the bidding process should have experience of working in the state – was removed from the new contract.Besides, another requirement that only insurance companies with a turnover of Rs 5,000 crore in 2017-18 would be eligible for participation in the competition had also been done away, allegedly to the pave way for RGIC.That the government made the participation of all employees in the insurance scheme mandatory in spite of the fact that a large chunk of the workforce had availed of insurance services from the open market also raised eyebrows.An official said a close examination of the matter revealed that “most of the apprehensions raised were found to be genuine”. “The deal was not only murky but full of frauds,” said the official, wishing not to be named.The RGIC has said that it has not received any information from the state government. “The policy has commenced on October 1, 2018. Reliance General Insurance has not received any subsequent intimation with regard to the policy till date,” it said in a statement issued late Thursday evening.Connivance at different levels?Right from day one, when the tenders were invited, the finance department started negotiating the deal at different levels from the government’s side. When the contract made headlines for the wrong reasons, the department defended it fully, saying that the premium quoted by the vendor (RGIC) was the lowest among five companies whose bids had been found technically valid. It asserted that due process was followed in finalising the contract.Even the principal secretary, finance department, Navin K. Choudhary, had told The Wire that from bidding to finalisation, the entire process of allotment of contract was carried out in a transparent manner.J&K governor Satya Pal Malik. Credit: PTI/Files“We had kept very harsh technical parameters. I have given all the details about financial quotes and other things. Everything is out on our website. And there is nothing to hide,” he had said.But a senior official said there were many unanswered questions that came to the fore during careful examination of the contract. “Why was an outside company hired to float the tenders and who allowed this? Why were tenders opened on a holiday, which is completely against the norm? Why would you make participation mandatory when some employees already have insurance cover?” asked the official.The official said when the “entire fraud” came to the fore, “some top officials” were summoned to Raj Bhavan by the governor and asked to explain their positions. “That is when the governor ordered the scrapping of the contract,” said the official.Clamour for high-level probeThere is also a counter-view coming from different quarters within the government. “If it has been proven now that the entire deal is a fraud, it is impossible that such an act could be committed without connivance at a political level. Such a controversial decision can’t be taken independently at a bureaucratic level,” said a senior state bureaucrat. “That is what needs to be probed also.”The state administrative council cleared the contract on August 31, and questions have been raised on whether details of the contract were studied then. There are no immediate answers to these questions. The council is headed by the governor and has his three advisors, Bharat Bhushan Vyas, Vijay Kumar and Khurshid A. Gania, as members.Former chief minister Omar Abdullah said cancelling the contract was not enough and instead, a high-level probe should be ordered to find out who was behind the fraud. “Fraud by whom? The guilty must be punished. Just cancelling the contract is not enough,” Omar tweetedThe Hon @jandkgovernor now needs to order an inquiry headed by the Chief Secretary to establish who was behind the allotment of the insurance contract. The sums of money involved are too big for this to have been a straight forward mistake. https://t.co/HPQ0kUngiJ— Omar Abdullah (@OmarAbdullah) October 25, 2018The Congress had earlier picked up the controversial contract to target Prime Minister Narendra Modi for allegedly favouring RGIC at a time when its promoter Anil Ambani is embroiled in the Rafale deal controversy.When your BFF is the PM, you can get the 1,30,000 Cr. Rafale deal, even without relevant experience. But wait. There’s more!Apparently, 400,000 JK Govt staff will also be arm twisted into buying health insurance ONLY from your company! https://t.co/DlEOqWA2NH— Rahul Gandhi (@RahulGandhi) October 6, 2018Mudasir Ahmad is a Srinagar-based reporter.