The statutory Judges’ Inquiry Committee has held that all three Articles of Charge were proved against former High Court Judge Yashwant Varma.

The panel concluded that Justice Varma failed to furnish a satisfactory explanation regarding the source of the cash, allowed his household staff to disturb the scene of occurrence, leading to the loss of material evidence, and submitted evasive, non-candid replies contradicting the testimonies of independent official witnesses.

The Judges' Inquiry Committee, comprising Justice Aravind Kumar, Supreme Court; Justice Shree Chandrashekhar, who was then the Chief Justice, Bombay High Court (now in the Supreme Court); and Senior Advocate B. V. Acharya, Karnataka High Court, concluded, "Article I is proved. Substantial unexplained 7500 denomination currency notes were found in the storeroom situated within the official residential premises at...The Judge failed to furnish a satisfactory explanation regarding the presence, source or ownership thereof...Article Il is proved that material evidence was not secured or preserved; the evidentiary condition of the storeroom was disturbed before lawful sealing and inspection; and the later non-availability of the currency notes remains unexplained. The finding rests on failure to preserve, acquiescence in disturbance through the establishment attached to the premises, and resulting loss of material evidence, and not upon proof of personal physical removal by the Judge."

The Committee said, "Article III is proved. The explanation furnished by the Judge, particularly the reply dated 22.03.2025 and the subsequent stand taken, did not exhibit the candour, transparency and institutional responsibility expected in the circumstances. It remained evasive and unsatisfactory when tested against the evidence of independent official witnesses and corroborative material."

The case arose on the night of March 14, 2025, when a sudden fire broke out at his official bungalow. Upon arrival, the fire service personnel and Police personnel from the jurisdictional police station found Indian currency notes in a burnt and partially burnt condition. Statements of several officials indicated that currency notes of Rs. 500 denomination, in varying states of burning, dampness and disintegration, were seen lying within the debris on the floor. 

The First Article of Charge dealt with the following: i. discovery and possession of unexplained Indian currency notes within official premises; ii. failure to preserve and causing interference with material evidence; and iii. furnishing evasive and misleading explanations. 

It said, "No such satisfactory explanation has been furnished. The defence of conspiracy or planting remains unsubstantiated. No person has been identified. No occasion of entry has been established. No material has been produced to show how such substantial currency notes could have been brought into the premises without detection. No credible alternative source or owner has been disclosed. The plea remains at the level of possibility."

It said that the proof rests on presence of substantial currency notes within official premises, effective control over the premises, absence of satisfactory explanation, and failure to account for the source or ownership of the currency notes. The defence of his absence from the scene of occurrence, shared access and non-ownership does not displace the charge.

The Second Article of Charge alleged that subsequent to extinguishment of the fire, and before lawful inspection and sealing by competent authorities, material objects and surroundings at the scene were altered or removed while the premises were under the control of the Judge; and that the failure to ensure that material evidence was secured or preserved, and acquiescence in its disturbance or removal, amounted to dereliction of institutional duty and obstruction of due process. 

It was noted, "The Judge has placed responsibility on fire and police officials. The premises remained the official residence of the Judge. The persons seen near the store and engaged in cleaning work were not strangers to the premises. Shri Rajinder Singh Karki was the Private Secretary of the Judge and Mohd. Rahil was part of the household staff establishment and a confidant of the Judge. Their conduct in relation to the storeroom is not irrelevant to the institutional responsibility attaching to the premises."

The Committee recorded that what stands proved is failure to secure and preserve material evidence, disturbance and alteration of the evidentiary condition of the storeroom before lawful sealing and inspection, and unexplained non-availability of the material thereafter. 

"The Committee does not rest its finding on direct proof that the Judge personally removed the currency notes. It rests upon failure to preserve, acquiescence in disturbance of the scene through the establishment under his authority, and the resulting loss of material evidence", it said. 

The Third Article of Charge alleged that when called upon to explain the circumstances surrounding the discovery of a huge amount of cash and the incident, the Judge, by an evasive explanation, denied the same; that such denial stands contradicted by the evidence of independent officials and photographic/video records; and that he thereby failed to exhibit the candour, transparency and sense of responsibility incumbent upon a constitutional functionary.

Justice Varma in his Reply did not merely deny ownership or personal knowledge, he stated that he was never aware of any money or cash lying in the outhouse storeroom; that neither he nor any member of his family had knowledge of cash; that no such cash or currency notes were shown to his family members or staff; that after the fire was doused no cash or currency notes were seen by members of the household or staff; that the question of explaining the source did not arise; and that neither he nor his staff had removed any article, currency notes or cash in any form. 

"Once the Judge had asserted that no currency notes was seen by household or staff after dousing, and later characterised the cleaning as routine removal of debris, the contents of his interaction with Shri Karki, Mohd. Rahil, members of his household, personal office and staff became material. If, as stated in the Statement of Defence dated 12.01.2026, the Judge had spoken to Shri Karki and Mohd. Rahil around 2:00 a.m., then what was stated to him, what inquiries were made, what he asked them, what answers were received, and why the site was not secured thereafter were matters peculiarly within the knowledge of the Judge or of persons associated with his establishment. These questions are not answered by the Judge, nor he examined Shri Karki and Mohd. Rahil in defence. Hence, an adverse inference has to be drawn against the Judge", the Committee said.

Justice Varma denied any nexus with or knowledge of the said funds, attributing the incident to an orchestrated conspiracy and characterizing the outhouse as an accessible storage space.

The Committee also said, "The omission to substantiate these matters is not a mere procedural omission. No member of the household, personal office, staff or security establishment was examined in defence. No application was moved to summon Shri Karki, Mohd. Rahil or any other person on behalf of the Judge. No material was placed to show that any complaint or FIR, including a complaint alleging planting, theft, removal, tampering or foul play, had been lodged after the Judge had himself expressed suspicion of conspiracy. The plea of conspiracy, staff involvement or first-responder removal therefore remained an assertion, not an explanation."

On April 10, 2026, Justice Varma had submitted his resignation to the President. 

Pursuant to the incident, Chief Justice of India Sanjiv Khanna had initiated an in-house inquiry and constituted a three-member committee comprising Punjab and Haryana High Court Chief Justice Sheel Nagu, Himachal Pradesh High Court Chief Justice G.S. Sandhawalia, and Karnataka High Court Justice Anu Sivaraman.

The committee submitted its report finding Justice Varma guilty of misconduct. After Justice Varma declined to resign, the CJI forwarded the report and the judge's response to the President and the Prime Minister, setting the stage for impeachment proceedings.

Subsequently, Birla admitted a multi-party motion for Justice Varma’s removal on August 12 and a statutory three-member Judges Inquiry Committee was constituted by the Speaker to conduct a formal judicial inquiry. 

In January 2026, the Supreme Court had also reserved its verdict on a plea of Justice Varma challenging the legality of the parliamentary panel probing corruption charges against him. Justice Varma has sought quashing of the Speaker's action, the admission of the motion, and all consequential notices issued by the inquiry committee, contending that the entire process is unconstitutional and contrary to the Judges (Inquiry) Act.

The Supreme Court had also dismissed his writ petition challenging the in-house procedure and its outcome, including the recommendation forwarded by then Chief Justice of India Sanjiv Khanna.

Senior Advocate Kapil Sibal, while addressing a press conference on June 17, 2025, launched a sharp criticism of the Delhi Police over its handling of the fire and subsequent discovery of burnt cash at the government residence of Justice Yashwant Varma.

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