Abrupt Haste To Close Proceedings At Critical Stage Intensifies Doubt: Madras High Court Directs CBI Investigation Into ₹397 Crore TANGEDCO Transformer Procurement Scam
As per the allegations officials and then Minister V. Senthil Balaji enabled a corrupt system where private bidders quoted identical transformer prices.
The Madras High Court has ordered a transfer of the investigation into alleged irregularities in the procurement of distribution transformers by the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) to the Central Bureau of Investigation (CBI). By transferring the case to a central agency, the Court highlighted that the credibility of an investigation is as vital as its eventual outcome, particularly in matters concerning the integrity of public contracting.
The matter involved allegations of a massive scam involving bid rigging and cartelization that reportedly caused a loss of approximately ₹ 397 crore to the state exchequer. Multiple writ petitions, including one by the NGO Arappor Iyakkam, were filed alleging that TANGEDCO officials and the then-Minister for Electricity, V. Senthil Balaji, facilitated a corrupt system where private bidders quoted identical prices for transformers. These "mathematically uniform" bids across various capacities were presented as evidence of a clandestine pre-arrangement designed to subvert the competitive bidding process.
Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan observed, “…the procedures adopted by both the State and the DVAC are so heavily marked by unfairness that they fail to inspire any public confidence, creating an absolute necessity for an independent enquiry to ensure the integrity of the investigation. All the allegations levelled in the complaints concern public contracting under the authority of the State and are directed against persons who occupy high constitutional and political office in the State. In such circumstances, leaving the matter to be investigated by agencies that function under the administrative control of the State would raise a serious and reasonable apprehension, in the public mind, about institutional independence”.
Senior Advocate V. Raghavachari appeared for the petitioners and P.S. Raman, Advocate General and Senior Advocates N.R. Elango, V. Karthic appeared for the respondents.
The complaints were initially filed with the Directorate of Vigilance and Anti-Corruption (DVAC) as early as July 2023. While the Vigilance Commissioner directed a detailed enquiry in November 2023, the process languished for nearly three years. Remarkably, the DVAC concluded its preliminary enquiry and dropped all charges on April 4, 2026, just as the High Court was conducting final hearings on the matter.
The Court noting the "highly suspicious" timing of the DVAC’s closure report and the egregious delay in the preliminary enquiry, which exceeded the mandated two-month timeline.
The Bench observed that the procedures adopted by the State and the DVAC were marked by such unfairness that they failed to inspire public confidence. Given that the allegations were directed at persons in high constitutional and political offices, the Court held that leaving the matter with state-controlled agencies would raise serious apprehensions about institutional independence.
“…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. This abrupt haste to close the proceedings at such a critical legal juncture further intensifies doubts regarding the transparency and impartial functioning of the DVAC”, the Bench further noted.
The operative directions of the Court included the immediate transfer of the investigation to the CBI. The DVAC was ordered to hand over all materials and reports to the central agency within two weeks. The CBI has been directed to conduct a de novo investigation as it deems fit, with the State Government and TANGEDCO ordered to provide full cooperation.
Cause Title: Arappor Iyakkam v. The Director, Directorate of Vigilance and Anti-Corruption & Ors. (Neutral Citation: 2026:MHC:1636)
Appearances:
Petitioners: Dr. V. Suresh and Mr. V. Raghavachari, Senior Counsel) for the petitioners.
Respondents: P.S. Raman, Advocate General, P. Kumaresan, Additional Advocate General, E.Ranganayak, N.R. Elango, V. Karthic, Senior Counsels, E.Raj Thilak and K.M.D.Muhilan Additional Public Prosecutors.