The Madras high court on Wednesday ordered a probe by the Central Bureau of Investigation (CBI) into allegations of a fraud amounting to ₹397 crore in the procurement of distribution transformers by the Tamil Nadu Generation and Distribution Corporation (Tangedco) during the tenure of DMK’s V Senthil Balaji as the state electricity minister between 2021 and 2023.
A bench of Chief Justices SA Dharmadhikari and G Arul Murugan ordered the State Directorate of Vigilance and Anti-Corruption (DVAC), that had been probing the matter until now, to “hand over” all papers and records related to the case to CBI.
The bench also said the CBI must conduct its probe “earnestly and expeditiously.”
The High Court issued the directions on a public interest litigation (PIL) filed by the Chennai based NGO and anti-corruption group ‘Arappor Iyakkam’ and a separate plea by AIADMK member E Saravanan, seeking an independent probe in the case.
The petitioners had told the high court that Tangedco had allegedly rigged tenders worth ₹1,182.88 crore for procuring 45,800 transformers for the state.
They alleged that the tender process showed signs of cartelisation, with bidders fixing prices in advance and eliminating competition.
Arappor Iyakkam’s counsel, advocate V Suresh, told the court that in seven out of 10 tenders, more than 30 companies had quoted the exact same price, down to “identical decimal points”, citing the NGO’s analysis.
{{/usCountry}}Arappor Iyakkam’s counsel, advocate V Suresh, told the court that in seven out of 10 tenders, more than 30 companies had quoted the exact same price, down to “identical decimal points”, citing the NGO’s analysis.
{{/usCountry}}After negotiations, these firms reduced their quotes by nearly the same margin, he said. Suresh argued that such uniformity had “near zero probability” in a competitive market and meant there existed some collusion among bidders.
The petitioners alleged that Tangedco had purchased transformers at prices up to 50% above prevailing market rates, causing a loss of about ₹397 crore to the state exchequer.
The NGO also told the court that it had submitted a complaint to the DVAC in July 2023 seeking a detailed probe, but the agency had not registered a case even after more than 30 months.
It sought an independent investigation under court supervision and named Senthil Balaji, former Tangedco chairman Rajesh Lakhoni, and Financial Controller (Purchase) V Kasi as key officials involved in the decision-making process.
During previous hearings, the court had directed the DVAC to place a status report on its preliminary inquiry and called for minutes of the tender committee meetings.
The bench had also questioned how state officials cleared contracts of this scale despite apparent red flags in pricing patterns.
The state government however, had denied the allegations.
It had also argued that the petition was being filed with an ulterior motive by persons belonging to other political parties with the elections just around the corner and had urged the court to dismiss the pleas.