Cash-at-home row: What’s the 2018 CBI case involving Delhi HC judge Yashwant Varma?

Delhi High Court Justice Yashwant Varma is under scanner after a huge stash of cash was allegedly found at his official residence in the national capital. As the incident came to light sparking a massive row, reports have now emerged that the 56-year-old judge was embroiled in a Central Bureau of Investigation (CBI) case in 2018.

Amid the controversy, Justice Varma has been transferred to the Allahabad High Court. However, the Supreme Court clarified that the decision to shift him was not linked to the probe by the Delhi HC chief justice in the matter.

Let’s take a closer look.

CBI case against Delhi HC Justice Yashwant Varma

Reports say that Justice Yashwant Varma , the second senior-most judge in the Delhi High Court,  was named in a First Information Report (FIR) by the Central Bureau of Investigation in a sugar mill fraud case in 2018.

He also featured as an accused in the Enforcement Directorate (ED) complaint related to the case.

As per the FIR lodged by the CBI, Justice Varma was the non-executive director of Simbhaoli Sugars in 2012. The case stemmed from a complaint by the Oriental Bank of Commerce which accused the private enterprise of defrauding the bank.

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The Oriental bank alleged that Simbhaoli Sugars misappropriated a Rs 97.85 crore loan meant for farmers and diverted the funds for other purposes, reported India Today.

According to the bank’s complaint, the sugar mill provided forged Know Your Customer (KYC) documents and embezzled the funds. By May 2015, the Oriental Bank of Commerce flagged Simbhaoli Sugars as a “suspected fraud” and reported it to the Reserve Bank of India (RBI).

The CBI booked Simbhaoli Sugar Mills, its directors and others, including Yashwant Varma, under the Prevention of Corruption Act on charges of criminal misconduct, cheating and criminal conspiracy. The ED filed an Enforcement Case Information Report (ECIR) under the Prevention of Money Laundering Act on February 27, 2018, as per a Times of India (TOI) report.

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What happened to the case?

In December 2023, the Allahabad High Court ordered the CBI to begin a fresh investigation into a grant of loans by seven banks to Simbhaoli Sugars, saying the fraud had “shaken the conscience” of the judiciary, as per NDTV.

The HC reportedly found that many bank officials appeared to have collaborated with Simbhaoli Sugar Mills in granting loans to the tune of Rs 900 crore.

The court said in its order at the time, “Bank officials completely ignored RBI guidelines and circulars. We direct the CBI to investigate which officials approved these loans, which members of the board or credit committee facilitated the disbursements, and which officials allowed the embezzlement to continue unchecked.”

On Allahabad High Court’s orders, the central agency launched a new probe in February 2024. However, the Supreme Court intervened and put a stay on the HC’s judgement, ending the investigation into alleged financial irregularities involving Simbhaoli Sugars and its directors.

Additionally, the top court allowed authorities to take action for fraud in accordance with the law.

As per the CNN-NEWS18 sources, Justice Varma’s name was removed by the CBI from the FIR shortly after it registered the complaint and the same was told to the court.

How Justice Yashwant Varma came to limelight

Delhi High Court Justice Yashwant Varma came to the spotlight after reports surfaced that a pile of cash was discovered at his Lutyens Delhi residence during a fire at the place around 11.35 pm on March 14.

The Delhi Fire Department personnel were pressed into service to douse the flames.

As per reports, Rs 15 crore in cash was allegedly found at Justice Varma’s official home. The claims have caused a row, shocking the judiciary and the public alike.

Later, the Supreme Court Collegium, led by Chief Justice of India (CJI) Sanjiv Khanna , decided to transfer Justice Varma back to the Allahabad High Court.

The apex court said the Delhi High Court Chief Justice DK Upadhyaya has “commenced the in-house enquiry procedure collecting evidence and information” after the incident came to light.

The Supreme Court also said Justice Varma’s transfer was “independent and separate from the in-house enquiry procedure”.

Sources have told NDTV that Justice Varma’s transfer was only the “first step” and the preliminary inquiry is underway.

Amid calls for Justice Varma’s resignation from various quarters, the Delhi Fire Services Chief Atul Garg claimed that firefighters did not find cash at the judge’s residence.

“Soon after dousing the flames, we informed police about the fire incident. Thereafter, a team of fire department personnel left the spot. Our firefighters did not find any cash during their firefighting operation,” the DFS chief told PTI.

With inputs from agencies