Justice Yashwant Varma, a sitting judge of the Delhi High Court, has been linked to a 2018 bank fraud case involving Simbhaoli Sugar Mills. His name appeared in a First Information Report (FIR) filed by the Central Bureau of Investigation (CBI) after a complaint from Oriental Bank of Commerce (OBC) regarding financial misappropriation.

CBI Probe into Simbhaoli Sugar Mills

The case stemmed from loans disbursed between January and March 2012, where OBC's Hapur branch issued Rs 148.59 crore to 5,762 farmers for agricultural purposes. The funds were meant to be transferred through an escrow account before reaching individual farmers, with Simbhaoli Sugar Mills acting as a guarantor. However, allegations surfaced that the company falsified Know Your Customer (KYC) details and misappropriated funds.

By 2015, OBC classified the loan as fraudulent, citing a loss of Rs 97.85 crore with an outstanding amount of Rs 109.08 crore. Among those named in the FIR was Gurpal Singh, the company’s deputy managing director and son-in-law of former Punjab Chief Minister Amarinder Singh. This led to a parallel investigation by the Enforcement Directorate (ED) on money laundering charges.

Judicial Oversight and Expanded Investigation

In December 2023, the Allahabad High Court directed the CBI to re-investigate the matter, focusing on seven banks that disbursed loans to Simbhaoli Sugar Mills. The court expressed concerns over violations of Reserve Bank of India (RBI) guidelines, suggesting that bank officials played a role in the fraud. It questioned why banks continued lending to the company between 2009 and 2017 despite its history of defaults.

Following these directives, the CBI launched a fresh probe in February 2024, scrutinizing the involvement of bank officials, company directors, and credit committee members. However, the Supreme Court intervened in March 2024, temporarily halting the investigation initiated by the Allahabad High Court.

Fire at Justice Varma’s Residence

On March 14, a fire erupted in the storeroom of Justice Varma’s official residence in Lutyens’ Delhi. Fire department personnel arrived at 11:43 PM and reportedly discovered cash among burnt jute sacks. A staff member claimed the damaged materials included court-related documents and stationery.

Though no FIR was registered since there were no injuries, videos allegedly showing recovered cash—estimated at Rs 15 crore—were shared with senior police officials. The Chief Justice of India (CJI) was notified, prompting an official inquiry.

Judiciary’s Response and Calls for Accountability

Following the incident, the Supreme Court Collegium, led by CJI Sanjiv Khanna, decided to transfer Justice Varma back to the Allahabad High Court, though sources described this as an initial step pending further inquiry. He did not preside over court the next day and was reportedly on leave.

Reactions from the legal fraternity were mixed. Delhi High Court Chief Justice DK Upadhyaya acknowledged the controversy had shaken the judiciary. Senior advocate Kapil Sibal criticized the lack of transparency in judicial appointments, while former Solicitor General Harish Salve questioned the credibility of the allegations, pointing to conflicting reports on whether cash was actually recovered.

Delhi Fire Chief Atul Garg denied that money was found at the scene, further complicating the matter. Salve argued that if the allegations were false, transferring Justice Varma would be unjust; if true, stronger action was necessary. He advocated for an independent inquiry to establish the facts.

With the judiciary under scrutiny, the case continues to unfold, raising broader concerns about governance, financial fraud, and judicial accountability.