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Madras HC Slams 'Cover-Up' in Transformer Scam Probe, Hands Case to CBI
In a scathing rebuke to Tamil Nadu's investigative machinery, the on , transferred the probe into an alleged ₹397 crore scam in 's procurement of distribution transformers to the . The bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan flagged egregious procedural delays, selective targeting, and a suspiciously timed closure of the enquiry as signs of an attempt to shield high-profile figures, including former Electricity Minister V. Senthil Balaji.
The ruling came in three consolidated led by anti-corruption NGO , advocate E. Saravanan, and member Rajkumar, who accused officials and bidders of colluding in rigged tenders between 2021 and 2023—precisely when Balaji helmed the electricity portfolio.
Transformers at the Heart of a Power Play
The controversy erupted over 's (now Tamil Nadu Power Distribution Corporation) tenders for 45,800 distribution transformers (25 KVA to 500 KVA). Petitioners alleged a blatant cartel: in seven of 10 tenders, over 20 bidders quoted identical rates to the last decimal , far exceeding market prices derived from GeM portals, prior rates, and other states' procurements. This, they claimed, caused ₹397 crore in losses through unjust enrichment, violating the , , and provisions on criminal conspiracy.
lodged its detailed complaint on , naming Financial Controller V. Kasi (allegedly Balaji's close aide), CMD Rajesh Lakhoni, Balaji himself, and bidders. Despite DVAC assurances, no FIR was filed. Similar pleas followed in 2025 from affiliates, citing the same irregularities amid political accusations of ruling DMK favoritism.
As news reports later highlighted, the scandal drew public ire, with activists like 's Jayaram Venkatesan decrying media silence despite evidence of bid-rigging.
Petitioners Cry Foul: 'Cartel Fixed, Exchequer Fleeced'
for Arappor hammered the "smoking gun" of identical bids—e.g., 34 bidders quoting ₹7,51,660 exactly in one tender, negotiated down but still 33% above priors. Senior counsel stressed no single bidder could supply volumes, yet committees split orders equally post-negotiation, ignoring 's red flags on abnormal rates. They invoked for mandatory FIRs on and accused DVAC of a sham three-year prelim enquiry (exceeding Vigilance Manual's two-month limit), examining 44 witnesses and 68 documents without FIR—essentially a "."
echoed claims of Kasi's reinstatement violating rules and Balaji's influence, demanding CBI amid "systemic corruption."
Defenses: 'Routine Practice, No Loss, Political Vendetta'
(via ) dismissed allegations as "chalk and cheese" comparisons—TN's copper-wound, 60-month warranty transformers justified premiums over aluminum rivals elsewhere. Identical quotes were historical norms among MSME manufacturers since 2011, per tenders; splits under ensured supply. Accountant General audits found no irregularities.
V. Kasi denied influence peddling; Balaji's counsel called accusations "speculative political rhetoric" sans direct evidence. DVAC's defended the closed PE (Prelim Enquiry No. PE 118/2025), finding no loss via IEEMA/GeM benchmarks and deeming uniform pricing beneficiary for small firms.
Court's Razor-Sharp Dissection: From Lalita Kumari to Procedural Sabotage
Delving into precedents, the bench dissected Lalita Kumari (2014), allowing prelim enquiries in corruption cases but capping at weeks, not years. clarified suspicion suffices for FIR; TN Sudhakar Reddy (2025) nixed mandatory PEs if facts scream cognizable offence. Yet DVAC's 73-page report—post-20-month sanction delay under (3+1 month limit)—targeted only Kasi, ignoring Balaji/Lakhoni, and closed abruptly days before hearings.
"The excessive and unjustified delay... strongly suggests an attempt... to suppress the truth... creating a reasonable suspicion of a cover-up designed to shield high-ranking officials and political figures."
Drawing from Save Mon Region Federation (2026) on CBI transfers for credibility where state probes falter, and , the HC deemed state processes "heavily marked by unfairness," eroding public trust given political stakes.
Punchy Pulses from the Bench
"Under the guise of preliminary enquiry, the DVAC appears to have conducted a detailed enquiry... must not be permitted to escalate into a ' ' prior to the formal registration of an offence."
"The fact that a complaint languishing for nearly three years was suddenly concluded while the matter was already under final hearing before the court is highly suspicious."
"All the allegations... concern public contracting... directed against persons who occupy high constitutional and political office... leaving the matter to... State [agencies] would raise a serious... apprehension... about institutional independence."
CBI Takes the Reins: Dawn
Directing DVAC to hand over materials within two weeks, the court mandated CBI's probe, full state cooperation, and expeditious closure. Observations bind only transfer merits, not guilt.
This precedent fortifies judicial oversight in stalled corruption probes, signaling zero tolerance for delays shielding the powerful. For 's transformers and TN's polity, the real current now flows through Delhi—potentially electrifying accountability.
