In a fresh revelation, Justice Yashwant Varma, a sitting judge of the Delhi High Court, was named in a Central Bureau of Investigation (CBI) First Information Report (FIR) related to a 2018 sugar mill bank fraud case. The development comes after a pile of unaccounted cash was allegedly found at his official residence in Delhi on March 14.
The CBI registered the FIR against Simbhaoli Sugar Mills, its directors, and others, including Yashwant Varma, who was a non-executive director of the company at the time. The case stems from a complaint by the Oriental Bank of Commerce (OBC), accusing the mill of defrauding the bank through a fraudulent loan scheme.
According to the complaint, between January and March 2012, the OBC’s Hapur branch disbursed Rs 148.59 crore to 5,762 farmers for the purchase of fertilisers and seeds. The funds were to be transferred to an escrow account before being credited to the farmers’ accounts. Simbhaoli Sugar Mills guaranteed the loan, assuming liability for any defaults or identity fraud.
The company allegedly submitted falsified Know Your Customer (KYC) documents and embezzled the funds. By March 2015, OBC declared the loan a fraud, recording a loss of Rs 97.85 crore with an outstanding amount of Rs 109.08 crore.
Among those named in the FIR is Gurpal Singh, the deputy managing director of Simbhaoli Sugar Mills and the son-in-law of former Punjab Chief Minister Amarinder Singh. The Enforcement Directorate (ED) subsequently launched a money laundering probe based on the CBI’s findings.
In December 2023, the Allahabad High Court directed the CBI to conduct a fresh investigation into seven banks involved in the loan disbursement. The court said the fraud had “shaken the conscience” of the judiciary and pointed to the collusion of bank officials in the approval of loans totalling Rs 900 crore. It noted that OBC was the only bank to approach the ED, leading to the seizure of properties.
“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,” the court stated.
Following the court’s orders, the CBI launched a renewed investigation in February 2024 to determine why banks continued to lend to Simbhaoli Sugar Mills between 2009 and 2017 despite its status as a defaulter. The probe named the company, its directors, and unidentified bank officials. However, the Supreme Court stayed the Allahabad High Court’s order in March 2024.
On March 14, a fire broke out in the storeroom of Justice Varma’s official residence in Lutyens Delhi. Firefighters arrived at 11:43 pm and reportedly discovered cash scattered among burnt jute sacks.
A staff member claimed that the damaged materials were court-related documents and stationery. No FIR was registered since no one was injured, but videos of the cash were sent to senior Delhi Police officials, who informed the government and the Chief Justice of India (CJI).
The total amount of cash recovered is reported to be Rs 15 crore. Following the incident, the Supreme Court Collegium, led by CJI Sanjiv Khanna, transferred Justice Varma back to the Allahabad High Court. The transfer was described as a “first step” while a preliminary inquiry remains underway. Justice Varma did not hold court the following day and was said to be “on leave.”
Delhi High Court Chief Justice DK Upadhyaya commented that the incident had left the judiciary “shaken and demoralised.” Senior advocate Kapil Sibal called for greater transparency in judicial appointments, saying, “Corruption within the judiciary is a serious issue. We need more transparency in the appointment process.”
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