The Madras High Court on Tuesday, April 29, ordered a Central Bureau of Investigation (CBI) probe into alleged irregularities in the Rs 397-crore transformer procurement during the tenure of V Senthil Balaji as Tamil Nadu's Electricity Minister between 2021 and 2023. The court held that the state government and its anti-corruption agency had acted in a manner that raised a “reasonable suspicion of a cover-up designed to shield high-ranking officials and political figures.”
The First Division Bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G Arul Murugan passed the order on petitions filed by anti-corruption organisation Arappor Iyakkam and E Saravanan, deputy secretary of the AIADMK legal wing. The petitioners had sought a direction to the Directorate of Vigilance and Anti-Corruption (DVAC) to register a First Information Report (FIR) and constitute a Special Investigation Team (SIT) to conduct a time-bound and independent probe into the allegations.
Arappor Iyakkam, an anti-corruption NGO based in Chennai, had lodged its complaint against Senthil Balaji, Tamil Nadu Generation and Distribution Corporation (TANGEDCO) former chairman Rajesh Lakhoni, and TANGEDCO Financial Controller (Purchase) V Kasi as early as July 6, 2023. The DVAC, in turn, wrote to the state government on January 22, 2024, seeking permission to conduct a “detailed inquiry.” With no progress thereafter, Arappor Iyakkam filed the present petition in March 2024.
The state government, however, granted sanction to the DVAC only on September 26, 2025, and only for a “preliminary inquiry” against Kasi alone, leaving out the former minister and the former TANGEDCO chairman entirely.
The bench found this sequence of events deeply troubling. “The excessive and unjustified delay in granting permission, coupled with the decision to downgrade the investigation from a ‘detailed enquiry’ to a preliminary enquiry and limit its scope solely to Kasi, strongly suggests an attempt by the government and relevant authorities to suppress the truth, and these actions create a reasonable suspicion of a cover-up designed to shield high-ranking officials and political figures, thereby undermining the integrity of a free, independent, and fair investigation,” the bench observed.
The court further noted that the DVAC had closed the preliminary inquiry on April 4, 2026, submitting a 73-page closure report concluding that there was insufficient evidence against Kasi. The bench held that the DVAC had, in effect, conducted a full-scale investigation disguised as a preliminary inquiry.
“If the DVAC was of the view that the complaint failed to establish a cognizable offence, then conducting an exhaustive investigation involving 44 witnesses and 68 documents was entirely unnecessary and legally unjustifiable. Such extensive action by the DVAC clearly demonstrates that they moved far beyond the limited scope of a preliminary inquiry and instead engaged in a full-scale probe before even registering the case,” the bench stated.
Chief Justice Dharmadhikari said, “It is ostensibly clear that the DVAC utilised the preliminary enquiry as a mere pretext to conduct a full-scale investigation without the legally required registration of an FIR.”
The bench also said, “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.”
The court further held that since the allegations concerned public contracting and were directed against “persons who occupy high constitutional and political office,” leaving the probe with agencies under the administrative control of the state would raise “a serious and reasonable apprehension, in the public mind, about institutional independence.”
It added, “The credibility of the process is as important as its outcome. Where a case concerns the integrity of public procurement and involves allegations of conflict of interest at the highest levels, an investigation must be not only fair but must also appear fair.”
The court directed the DVAC to transfer all files connected with the case to the CBI officer in charge of the investigation, who is to be appointed within two weeks of the order. The state government, TANGEDCO, and the DVAC were directed to extend full cooperation to the CBI to ensure an effective investigation.
The bench, however, clarified that its findings were limited in scope. “We make it clear that the observations made in this judgment are limited only for the purpose of deciding whether an independent investigation is warranted and shall not be construed as a finding on the merits of the allegations, and they shall not prejudice any person in any proceedings that may arise,” it stated.
Reacting to the court’s order, Senthil Balaji denied all wrongdoing. He told reporters at his residence in Coimbatore: “There was no loss to the government or to the electricity board.” He defended the tender process, saying TANGEDCO had been following the same procurement procedures since 1987 and that the finalisation process was monitored by three separate committees.
He alleged that certain central agencies were acting “under political duress” rather than independently and said he would consult legal experts and the state government on whether to appeal the order. He also cautioned that the registration of an FIR should not be treated as proof of guilt.