On March 14, a fire broke out at Justice Varma's official bungalow in Lutyens' Delhi around 11:35 PM. Firefighters promptly responded to the emergency and extinguished the blaze. During their operations, it was purported that a substantial amount of unaccounted cash, allegedly around ₹15 crore, was discovered at the premises. However, Delhi Fire Services Director Atul Garg refuted these claims, stating that no cash was found by the firefighters during their response.
In light of these allegations, Chief Justice of India Sanjiv Khanna sought a detailed report from Delhi High Court Chief Justice D K Upadhyay. The Chief Justice initiated an in-house inquiry, collecting evidence and information related to the incident, and submitted his findings to the CJI on March 21. The Supreme Court is expected to deliberate on the report and consider further action.
Concurrently, the Supreme Court Collegium has proposed the transfer of Justice Varma back to the Allahabad High Court, his parent institution. The Supreme Court clarified that this transfer proposal is independent of the ongoing in-house inquiry concerning the cash discovery. Emphasizing the separation of the two matters, the Court addressed misinformation and rumors linking the transfer to the recent allegations.
Justice Varma's judicial career has been marked by previous controversies. In 2018, he was named in a Central Bureau of Investigation First Information Report concerning a bank fraud case involving Simbhaoli Sugar Mills. At that time, Justice Varma served as a non-executive director of the company. The Oriental Bank of Commerce had accused the sugar mill and its officials of defrauding the bank through a fraudulent loan scheme. Specifically, between January and March 2012, OBC's Hapur branch sanctioned ₹148.59 crore to 5,762 farmers for purchasing agricultural inputs. These funds were intended to be transferred to an escrow account before being credited to the farmers' individual accounts, with Simbhaoli Sugar Mills guaranteeing the repayment and covering any defaults or identity fraud.