Supreme Court Refuses To Stay CBI Probe Against Senthil Balaji In ₹397-Crore Transformer Scam

The bench of Justice Vikram Nath and Justice Sandeep Mehta declined to entertain the special leave petition (SLP) challenging the High Court’s April 29 order mandating a Central Bureau of Investigation probe into the alleged scam involving procurement of 45,000 distribution transformers by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO).

During the hearing, Senior Advocate Siddharth Dave, appearing for a TANGEDCO official, argued that the High Court had exceeded its jurisdiction by ordering a CBI investigation despite there being no specific prayer seeking such relief. “There was no prayer for a CBI enquiry before the High Court. It's a politically motivated case,” Dave submitted.

However, Justice Vikram Nath rejected the contention and observed that constitutional courts possess the authority to direct an investigation by an independent agency if circumstances so require. “We don't need a prayer. It depends upon how the court feels,” the bench orally remarked.

Refusing to stay the investigation, the Supreme Court clarified that the CBI probe should proceed independently and uninfluenced by any observations made by the High Court in its order.

What is the transformer procurement scam?

The controversy relates to allegations that the Tamil Nadu exchequer suffered losses to the tune of Rs. 397 crore due to irregularities in the transformer procurement process carried out during Balaji’s tenure as Electricity Minister in the DMK government.

The Madras High Court had ordered a fresh CBI investigation while hearing petitions filed by NGO Arappor Iyakkam and AIADMK legal wing members E. Saravanan and Rajkumar, who sought an independent probe into the alleged financial irregularities. The petitioners alleged large-scale corruption and manipulation in the procurement of 45,000 transformers by TANGEDCO between 2021 and 2023.

In its order, the High Court had directed the Directorate of Vigilance and Anti-Corruption (DVAC) to transfer all documents and records connected to the case to the CBI within two weeks. It further directed the central agency to conduct a comprehensive investigation expeditiously and proceed in accordance with law. The High Court had also instructed the Tamil Nadu government, TANGEDCO and the DVAC to extend full cooperation to the CBI during the course of the investigation.

Following the High Court order last month, Senthil Balaji had publicly denied any wrongdoing and maintained that the transformer procurement process strictly adhered to established procedures. The DMK leader had stated that the tender procedures followed in the procurement had been in existence since 1987 and that the same mechanism continued to be followed by the government.