The Tamil Nadu government on Thursday (July 3, 2025) informed the Madras High Court that a competent authority would take a call within a week or 10 days on the issue of granting permission to register a First Information Report (FIR) regarding an alleged scam in the procurement of distribution transformers during the tenure of former Electricity Minister V. Senthilbalaji between 2021 and 2023.
Appearing before Justice P. Velmurugan, Advocate General P.S. Raman said, since a decision was expected shortly, nothing would survive in a writ petition filed by anti-corruption organisation Arappor Iyakkam, which had sought a direction to the Directorate of Vigilance and Anti-Corruption (DVAC) to register the FIR on the basis of its complaint lodged nearly two years ago.
On the other hand, advocate V. Suresh, representing the complainant, urged the court to look into the records to find whether there had been cartelisation and collusive bidding, pursuant to the tenders floated for the supply of transformers. He sought a short adjournment to present a tabulation of the details of the complaint. Accepting his request, the judge adjourned the hearing on the matter.
Filing an affidavit on behalf of the petitioner organisation, its managing trustee Jayaram Venkatesan had also insisted upon a High Court-monitored probe by a Special Investigation Team (SIT), since the materials it collected had reportedly revealed a loss to the tune of ₹397 crore to the public exchequer due to collusive bidding for supply of the transformers to the Tamil Nadu Generation and Distribution Corporation (Tangedco).
The deponent told the court that distribution transformers were used to step down the voltage used in distribution lines to a level that is usable by the end consumer. Tangedco procures these transformers in various capacities, ranging from 25 KVA to 500 KVA, depending on the load capacity requirements. The procurement generally takes place by inviting tenders through tntenders.gov.in.
The petitioner organisation analysed 10 tenders floated between 2021 and 2023 for the procurement of 45,800 distribution transformers. The total value of those tenders floated by Tangedco amounted to ₹1,182.88 crore. The examination of the tenders was undertaken from the viewpoint of the number of participating bidders, the value quoted by each bidder, the prevailing market rate, and other parameters to find out if there were any irregularities.
The elaborate exercise led to the finding that in seven of the 10 tenders, there was clear evidence of unjust enrichment to the contractors through collusive bidding and cartelisation, and the resultant loss to the public exchequer was found to be ₹397 crore, Arappor Iyakkam claimed.
“It is interesting to note that in each of the 10 tenders, more than 26 bidders were shown to have participated, thereby creating an apparent image of healthy competition, but what is to be noted is that in all tenders, almost all bidders had quoted exactly the same price corrected to the same decimal points,” the affidavit read.
It went on to state: “It is mathematically near to a zero probability for more than 20 bidders to have quoted the exact same rate in tenders. The only logical and plausible conclusion that follows from this fact is that these bidders have conspired and colluded amongst themselves to prefix the rate and had thus snuffed out the competition and made a mockery of the tender process.”
Stating there were materials to suspect the involvement of then Minister Senthilbalaji, Tangedco chairman and managing director Rajesh Lakhoni, and Financial Controller (Purchase) V. Kasi in the entire process, the petitioner had included all three of them as respondents to the writ petition.
On Thursday, Mr. Suresh said, he had taken a private notice to the former Minister and that it was served at his residences in Chennai and Karur.
