Cash discovery row: SC rejects Justice Yashwant Varma's plea, says his conduct does not inspire confidence

The Supreme Court on Thursday dismissed the plea filed by Allahabad High Court judge Yashwant Varma, who had sought to invalidate an in-house inquiry report that found him guilty of misconduct in connection with the recovery of cash from the storeroom of his official residence in Delhi.

A bench of Justices Dipankar Datta and A G Masih observed that due procedure was meticulously followed and held that Justice Varma's conduct "does not inspire confidence," making his plea unfit for consideration. The ruling marks a significant setback for the judge, who has been at the centre of controversy since March, when a large stash of half-burnt cash was discovered after a fire broke out in his residence.

Justice Varma had also sought to quash the May 8 recommendation of then Chief Justice of India Sanjiv Khanna, which urged Parliament to initiate impeachment proceedings against him.


The top court noted that the procedures laid out in the in-house mechanism and followed by the committee—except for the uploading of video footage and photographs—were duly adhered to. "We have held that it was not required to do so (upload the photos and videos of the fire-fighting operation on the SC website) as per the procedure. But having said so, we have held that nothing turns on it, because at the opportune moment, you did not question it. And there is also no relief claimed in the writ petition in so far as the uploading is concerned," Justice Datta said while reading from the judgment.

The court ruled that the committee of judges, appointed by the then CJI, followed the prescribed process, and the subsequent recommendation to the Prime Minister and President for Justice Varma’s removal was not unconstitutional. Emphasizing the legal sanctity of the in-house mechanism, the bench stated it was not a system outside the constitutional framework.

The Supreme Court also found no infringement of Justice Varma’s fundamental rights. However, it granted him the liberty to raise his arguments during any future impeachment proceedings that may be initiated.

Earlier, the court had remarked that Justice Varma’s conduct "did not inspire confidence" and had upheld the Chief Justice’s authority to act upon judicial misconduct, stating the CJI could not merely function as a "post office" and bore duties to the nation.

The court also dismissed a separate petition filed by advocate Mathews J Nedumpara, who had sought the registration of an FIR against Justice Varma for alleged "abuse of process of the Court."

While reserving its judgment on July 30, the court had asked Justice Varma why he chose to approach the apex court after the in-house committee had already found him guilty of misconduct.

In his petition, Justice Varma argued that the inquiry had "reversed the burden of proof," forcing him to disprove the allegations. He claimed the findings were shaped by a "preconceived narrative" and alleged that the inquiry was expedited at the cost of "procedural fairness."

He also contended that the panel had reached adverse findings without providing him a full and fair hearing.

According to the inquiry panel's report, Justice Varma and his family members had either covert or active control over the storeroom where the half-burnt cash was found after the fire, establishing serious misconduct warranting his removal.

The three-judge committee, headed by Punjab and Haryana High Court Chief Justice Sheel Nagu, conducted the inquiry over 10 days, examined 55 witnesses, and visited the site of the fire. The blaze reportedly began around 11:35 pm on March 14 at Justice Varma’s official residence, while he was serving as a judge of the Delhi High Court.

Here's a series of events that have unfolded in the case so far:

• Mar 15: Delhi High Court officials inspect the place of incident on instructions of high court chief justice.
• Mar 17: Delhi HC CJ Justice D K Upadhyay meets then CJI Sanjiv Khanna.
• Mar 20: Delhi HC CJ shares photos, videos with CJI.
• Mar 20: English daily TOI breaks news on alleged discovery of semi-burnt cash at Justice Varma's residence.
• Delhi HC CJ writes to CJI, favouring deeper probe.
• Mar 21: CJI asked for the reply of Justice Varma in writing before noon of March 22. SC collegium mulls transferring Justice Varma to Allahabad HC.
• Mar 22: Justice Varma responds, trashes allegations. CJI Sanjiv Khanna constitutes three-member committee to inquire into allegations against Justice Varma. SC uploads on its website an in-house inquiry report, including photos and videos related to the case.
• Mar 28: Justice Varma transferred to parent Allahabad HC. SC asks Allahabad HC CJ not to assign him judicial work.
• May 3: SC panel holds the judge guilty of misconduct, recommends removal.
• May 8: Then CJI writes to President Droupadi Murmu, PM Narendra Modi seeking his impeachment as Justice Varma refuses to step down.
• Jul 17: Justice Varma moves SC seeking invalidation of a report by an in-house inquiry panel.
• Jul 23: The judge seeks urgent hearing on his plea in SC.
• Jul 30: SC reserves judgment on judge's plea.
• Aug 7: SC junks Justice Varma's plea.