The Supreme Court on Monday refused to interfere with the Madras High Court order directing a Central Bureau of Investigation (CBI) probe into the alleged irregularities in transformer procurement tenders issued during the tenure of former Tamil Nadu Electricity Minister V Senthil Balaji.
The Bench of Justice Vikram Nath and Justice Sandeep Mehta dismissed the challenge raised against the High Court’s direction ordering a CBI investigation into the alleged Rs 397-crore scam relating to the procurement of distribution transformers by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO).
The appeal before the Supreme Court was filed by V Kasi, Financial Controller of TANGEDCO. During the hearing, TANGEDCO also withdrew its separate appeal challenging the High Court order.
Senior Advocate Siddharth Dave, appearing for Kasi, argued that there was no specific prayer before the High Court seeking transfer of investigation to the CBI and contended that the proceedings were politically motivated. It was further submitted that the High Court exceeded the scope of the pleadings while directing a central agency probe.
The Supreme Court, however, declined to accept the contention and observed that constitutional courts possess the jurisdiction to direct an independent investigation where the facts and circumstances so warrant. The Bench ultimately refused to entertain the Special Leave Petition and allowed the CBI investigation to proceed.
At the same time, the Court clarified that the CBI must conduct the investigation independently and uninfluenced by any observations made by the Madras High Court while ordering the probe.
The matter arises out of ten tenders floated by TANGEDCO between 2021 and 2023 for procurement of nearly 45,800 distribution transformers worth approximately Rs 1,183 crore during Balaji’s tenure as Electricity Minister.
The controversy was originally brought before the Madras High Court through petitions filed by NGO Arappor Iyakkam and members of opposition political parties alleging large-scale irregularities, cartelisation and manipulation in the tendering process. The petitioners alleged that the procurement exercise caused an estimated loss of around Rs 397 crore to the State exchequer.
One of the principal allegations before the High Court was that several bidders participating in the tenders had quoted identical prices, allegedly indicating cartel formation and violation of the Tamil Nadu Transparency in Tenders Act. The petitions also alleged inflated pricing and irregularities in the award of contracts.
On April 29, a Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G Arul Murugan transferred the probe from the Directorate of Vigilance and Anti-Corruption (DVAC) to the CBI after expressing dissatisfaction with the manner in which the preliminary enquiry was conducted.
The High Court had observed that despite detailed complaints and multiple allegations, no FIR had been registered for more than three years. It further criticised the limited scope of the DVAC enquiry and directed the transfer of all connected records and documents to the CBI for a de novo investigation.
With the Supreme Court declining to interfere, the CBI probe into the alleged transformer procurement irregularities will now continue in accordance with the High Court’s directions.
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