Justice Yashwant Varma Fire Scandal: Who Burnt the Cash?

The Hindu

5 hours ago

Published : Jun 24, 2025 14:03 IST - 11 MINS READ
That the judicial career of erstwhile Delhi High Court judge, Justice Yashwant Varma, is over is no longer in doubt. However, at the heart of his cash-burning scandal lies one basic question—whose money was it? That question still doesn't have an answer.
At around 11:35 p.m. on March 14 this year, a fire broke out in a store room attached to the government bungalow of Varma in Delhi. It should have been an unremarkable episode—maybe a short circuit, some papers damaged, a garden hose used to douse the flames. Instead, what followed was a slow-motion unravelling of one of the most significant scandals in the Indian judiciary's recent memory.
Firemen and police personnel who entered the premises that day would later testify before the three-member In-House Committee set-up by the Chief Justice of India (CJI) that they saw stacks of burning or half-burnt Rs.500 notes lying on the floor, smoke curling from them. One of them captured a video on his phone, and someone can be heard saying, 'Mahatma Gandhi me aag lag rahi hai'.
Over the weeks that followed, the judiciary tried to keep things in-house, quite literally. But the blaze wouldn't die. It took about a week for someone to leak the story to a news publication.
The findings, now leaked
The 64-page report of the In-House Committee—comprising High Court Chief Justices Sheel Nagu and G.S. Sandhawalia, and Justice Anu Sivaraman, all judges with reputations for integrity—was made public by legal news portal The Leaflet.
It concluded that Varma had 'covert or active control' over the store room and that cash had indeed been discovered there. Perhaps the most damning part of the report is its attribution of responsibility—based on what it calls 'strong inferential evidence'—to Varma's most trusted domestic staff and personal secretary. The Committee concludes that they removed the burnt cash in the dead of night, after firemen and police had left.
If this conclusion is true, it exposes an attempt to obstruct evidence from within the judge's own circle. Even if the judge is innocent of not owning the money, an attempt at cover-up by his staff, irrespective of whether it was at his behest or not, is utterly foolish and deserving of impeachment of their boss. The three-member Committee saw this cleanup operation as a strong indication of consciousness of guilt.
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In view of these findings, it recommended that proceedings for his removal be initiated. The report rejected Varma's explanation that the store room was a 'porous space' accessible to outsiders, based on witness testimonies that only specific persons from Varma's staff could access the store room which was otherwise locked and padlocked.
What was termed 'unnatural conduct' by the Committee was that Varma did not inspect the store room premises immediately after he returned to Delhi the next day, or report the alleged conspiracy to judicial or police authorities. 'A natural reaction of any person would be on arrival to first inspect the site to assess the damage, even if only household articles had been damaged and no person was hurt in the fire incident', the report stated, drawing an 'adverse inference' against Varma for this. Such behaviour undermined his claims of innocence.
In short, the report answered three questions: Was the cash there? Yes. Did the judge and his household control the store room? Yes. Has the judge offered any reasonable explanation for the cash being there? No. So, whose cash it was is still unknown.
Three possible theories
Even as the report establishes moral culpability—enough to warrant a judge's impeachment—it does raise larger concerns. In my opinion, we are left with three possible theories: Each raising serious questions about the judge, the system, or both.
The first theory is that the money was Varma's. For whatever reason—stupidity, arrogance, or something worse—he kept piles of cash inside the store room of his official residence. The key question then is: what was this cash for? Was it linked to any orders he passed? Some quid pro quo for favours from the bench? Or was it simply unaccounted money set aside for a property deal, in a real estate market where black money still drives most transactions?
If it is for the former, Varma ought to be labelled corrupt, impeached, and criminally prosecuted. If it was for the latter, he still deserves to be removed—on grounds of judicial morality and ethics. Not just for lying to the Committee, but for failing to uphold the dignity and standards expected of a high Constitutional office.
The Committee itself makes this argument. It says that whether the stashing of cash happened with or without Varma's consent is secondary. What matters is that a sitting judge could not explain the presence of deeply suspicious material on his premises. That alone amounts to a breach of public trust. This kind of moral framing does remind us that the judiciary's legitimacy rests as much on appearances as on outcomes.
Given Varma's reputation in judicial circles—a former tax lawyer known for his intellect—it is hard to believe he would stash his own black money in an outhouse store room, instead of hiding it under his bed or parking it with trusted relatives. But then, people have been known to act in ways that defy even their own intelligence.
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The second theory is that the money wasn't his: That he was storing it for someone else. That's still a serious lapse. A judge who turns his house into a storage site for unaccounted or suspicious money—even if it's not his—has crossed a line. Or, it may be more about self-preservation: Varma may be scared to name the person. In this scenario, the issue is bigger than one judge's complicity. It is about a judiciary vulnerable to influence, where judges fear revealing the truth. He may not be guilty of corruption in the strict legal sense, but he's definitely guilty of being open to blackmail, which is just as dangerous.
If this is the truth, and he still refuses to resign—for fear it would look like an admission of guilt of corruption—then the burden is on him to come clean. He should say whose money it was, or at least name who he suspects. If he's protecting someone more powerful and is willing to be impeached, definitely, the stakes are higher. And that, in itself, is a problem.
In any case, if Varma can't reveal the truth for his own sake, or for the integrity of the office he holds, it's unreasonable to expect sympathy from anyone else. And a judge amenable to such blackmail cannot continue sitting on the bench.
That Varma had no idea about the money is the third theory: That it was planted while he was away from Delhi. In that case, the focus is also on the system. Why was the CCTV footage not sealed after the incident was reported to the higher-ups? Why has no FIR been filed by the police even now? Why didn't Varma himself file one? If he really believes someone framed him, his inaction does not make sense. And if the system also failed to protect or investigate, it raises bigger questions. Nothing stops the police from seeking the CJI's sanction for filing an FIR against Varma.
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In any case, given the Committee's findings that his own staff removed burnt cash secretly, the case still warrants his removal, on grounds of judicial ethics and breach of institutional morality.
All three theories ultimately point to one outcome: Varma's removal from office. But only the first justifies impeachment strictly on grounds of corruption. For Varma, if there's a face-saving option left, it is to ensure that impeachment is not for being 'corrupt'.
Problems with the process
The In-House mechanism also hasn't inspired confidence. Instead of clarity, we're left with smoke, silence, and speculation. And in that fog, trust in the judiciary burns a little more.
For more than two decades, the Indian judiciary has relied on this informal, extra-Constitutional process to discipline judges. Born from the Supreme Court's 1995 ruling in C. Ravichandran Iyer v A.M. Bhattacharjee, it was meant to fill the 'yawning gap' between 'proven misbehaviour' (the threshold to be met for impeachment) and ethical lapses, as not all actions deserve impeachment, a politically fraught and cumbersome process.
The ruling was formalised in 1999, but over time, its shortcomings have become glaring. Judges rarely resign when found to be at fault. If they refuse to step down, the CJI typically writes to the President and Prime Minister seeking removal under the Judges (Inquiry) Act, 1968, which lays down the process of impeachment.
This raises more institutional concerns. Once the CJI recommends removal, the Parliamentary inquiry that follows risks becoming a mere formality: The matter has already been prejudged. Moreover, the CJI also recommends the name of a Supreme Court judge to sit on the Parliament's Inquiry Committee, by convention. Can this judge truly go against their Chief Justice's opinion? The appearance of neutrality is suspect.
Even if the Parliament formally says it will not consider the In-House report—as in the Justice S.K. Gangele's case—the long delay in initiating such a Parliamentary inquiry and the gaps already found by the In-House Committee in a guilty judge's defence gives a lot of time to such a judge to re-think and re-calibrate their defence, even manipulate evidence. For an innocent judge, it could prejudice public opinion. Either way, the system fails.
More importantly, the In-House process is opaque and non-adversarial. There is no provision for cross-examination. The judge isn't entitled to legal representation. The Committee itself acknowledges that it's merely a fact-finding body, not a tribunal of record. Bound neither by rules of evidence nor due process, its goal is to assess whether a prima-facie case exists.
This opacity breeds suspicion. The Supreme Court's initial decision to release preliminary material was bold: But the final report was leaked, not shared officially. Who leaked it? Why? These questions deserve reflection.
The ad-hoc nature of the entire process to deal with a scandal or a complaint against a judge is among the most troubling aspects of the current system. For instance, the CCTV footage. The Committee notes that Varma could have preserved the footage from the camera pointed at the store room door to support his claim that the area was accessible to others and that a conspiracy was afoot. But that footage was sealed only on March 25, 10 days after the fire, and only when the Committee visited the premises for a spot inspection.
Now, flip the question: If the CJI could direct the seizure of mobile phones belonging to Varma's staff—as the report notes—why didn't he also order the immediate sealing of the CCTV footage from the same area? If preserving digital evidence was within his power in one case, why not in the other?
In cases such as these, the failure to have a codified, automatic mechanism to preserve evidence undermines the process to justice. The Delhi Police failing to file a panchnama and seize the cash, given the 'sensitivity' of the case, added to this mess.
What's the way forward?
This episode shows that internal oversight must be reformed—not in response to outrage, but to restore trust. Disciplinary inquiries must trigger deeper institutional change. We need an independent oversight body, a codified procedure, a robust ethics code, and a time-bound, transparent process.
Recent steps—such as the CJI's release of Delhi High Court's preliminary report—are good but isolated and one person-driven. Unless institutionalised, they remain one-offs. The use of digital evidence and remote testimonies is a start, but must be embedded into rules.
The government seems eager to push ahead with Varma's impeachment, perhaps to create an example. Some reports even suggest that it may try to bypass the mandated step of setting up an Inquiry Committee after the impeachment motion is admitted. That would be blatantly unconstitutional.
The government, i.e. the Executive, appears to be under the mistaken impression that it can dictate the process. The removal of a judge falls squarely within the domain of Parliament. The Judges Inquiry Act makes no allowance for skipping the Inquiry Committee stage.
At the same time, the judiciary's stubborn resistance to institutional reform only feeds fodder to its most hostile critics. Take, for example, Vice President Jagdeep Dhankhar, who has made it a habit of attacking the judiciary—particularly the Supreme Court—on one issue or another, often sounding like a broken record.
His repeated, delusional claims about India being a country where 'Parliament is supreme'—when in fact India is a country where the Constitution is supreme and the judiciary interprets the Constitution—betrays wilful distortion. His political commentary—despite holding a Constitutional office that demands neutrality—only chips away at its dignity and exposes the hypocrisy in his tirades against the Supreme Court.
In any case, the Justice Varma affair is not just about one man. It is about institutional decay. About what happens when systems built on trust lose their moral compass. Will sunlight disinfect? Or will we keep fighting fire with fog?
The store room at 30 Tughlaq Crescent is now empty. But the smoke it emitted still engulfs the Indian judiciary. And perhaps it should—until the system it exposed is cleansed, not just with light, but with a codified, transparent rule.
Saurav Das is an investigative journalist writing on law, judiciary, crime, and policy.