SC Refuses to Stall CBI Probe Into Alleged ₹397-Crore TANGEDCO Transformer Tender Scam Linked to Senthil Balaji

May 11, 2026 : The Supreme Court on Monday declined to interfere with the Madras High Court’s order directing a Central Bureau of Investigation (CBI) probe into alleged irregularities in transformer procurement tenders issued during the tenure of former Tamil Nadu Electricity Minister V Senthil Balaji.

A Bench comprising Justice Vikram Nath and Justice Sandeep Mehta dismissed the challenge against the High Court’s direction ordering a CBI investigation into the alleged ₹397-crore scam relating to procurement of distribution transformers by the Tamil Nadu Generation and Distribution Corporation (TANGEDCO).

The appeal before the Supreme Court was filed by V Kasi, Financial Controller of TANGEDCO. During the hearing, TANGEDCO also withdrew its separate appeal challenging the High Court’s order.

Senior Advocate Siddharth Dave, appearing for Kasi, argued that no specific plea seeking transfer of investigation to the CBI had been made before the High Court. He further contended that the proceedings were politically motivated and that the High Court had travelled beyond the scope of the pleadings while directing a central agency probe.

The Supreme Court, however, rejected the submissions and observed that constitutional courts are empowered to order an independent investigation where the facts and circumstances justify such a course. The Court ultimately refused to entertain the Special Leave Petition, allowing the CBI investigation to continue.

At the same time, the Bench clarified that the CBI must carry out the investigation independently and without being influenced by any observations made by the Madras High Court while directing the probe.

The case relates to ten tenders floated by TANGEDCO between 2021 and 2023 for procurement of nearly 45,800 distribution transformers valued at around ₹1,183 crore during Senthil Balaji’s tenure as Electricity Minister.

The controversy was originally brought before the Madras High Court through petitions filed by NGO Arappor Iyakkam and members of opposition political parties alleging large-scale irregularities, cartelisation and manipulation in the tender process. The petitioners claimed that the procurement exercise caused an estimated loss of nearly ₹397 crore to the State exchequer.

One of the key allegations was that multiple bidders quoted identical prices in the tenders, allegedly indicating cartel formation and violation of the Tamil Nadu Transparency in Tenders Act. The petitions also alleged inflated pricing and irregularities in award of contracts.

On April 29, a Division Bench of the Madras High Court comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G Arul Murugan transferred the probe from the Directorate of Vigilance and Anti-Corruption (DVAC) to the CBI after expressing dissatisfaction with the manner in which the preliminary enquiry had been conducted.

The High Court observed that despite detailed complaints and multiple allegations, no FIR had been registered for more than three years. It criticised the limited scope of the DVAC enquiry and directed transfer of all connected records and documents to the CBI for investigation.

With the Supreme Court refusing to interfere, the CBI probe into the alleged transformer procurement irregularities will now proceed in accordance with the High Court’s directions.