“Investigation Not Fair”: Madras High Court Orders CBI Probe Into Alleged Fake NOCs For Setting Up Petrol Pumps In State

Noting that the investigation being carried out by the State was not fair or independent, the bench of Chief Justice Manindra Mohan Shrivastava and Justice Arul Murugan thought it fit to transfer the investigation to an independent agency and ordered accordingly. The court added that, though it was usually slow in transferring the probe to another agency in the present case, despite orders from the court, the investigation was not being carried out in a proper direction.

“Though ordinarily, this Court would be slow in directing handing over of investigation to any other agency, however, in the present case, as our orders would go to show, in the past, despite our repeated orders, the agency is not holding investigation in proper direction and till date, it claims to be clueless and at the same time ignorant of the role played by various persons including the beneficiaries, in the matter. We are therefore constrained to draw an inference that the investigation is not fair and independent. In a situation like this, this Court has ample powers to hand over investigation to some other investigating agency,” the court observed.

The court was hearing a petition filed by VBR Menon seeking direction to the Chief Controller Of Explosives and the Joint Chief Controller of Explosives to cancel the Final Explosive License issued to Indian Oil Corporation and Nayara Energy Limited, issued to establish petrol pumps by accepting forged and fabricated copies of the NOC certificate.

The petitioner submitted that, though an investigation was being carried out, the beneficiaries in whose favour the fake certificate was issued could not be identified, and they have not been made accused in the investigation.

The petitioner also submitted that the beneficiaries knew that they had not applied for the certificate and yet used the fake ones to get the undue benefits. He thus argued that the beneficiaries are prima facie accused of wrongdoing, but all attempts were being made to save them.

After noting the materials placed before it, the court agreed that the investigation was not being conducted in a proper manner by the CB-CID and that though there were materials against the beneficiaries, no case was registered against them. The court had also previously mulled setting up a Special Investigating Team (SIT) to probe into the issue.

The court noted that the beneficiaries were directly contacting the persons to obtain no objection certificates, without submitting applications in the Department, by paying them huge amounts. The court noted that as per procedure, the NOCs could have been issues only after conducting spot inspection, which was not done in the present case. The court was thus convinced of the role that the beneficiaries played in the entire racket.

The court noted that despite materials, the CB-CID had registered cases only against those who had issued the fake NOCs and not against those who had benefitted from them.

“We have no hesitation in saying that the manner in which the investigation has been held or any further investigation that is going on, is not in proper direction and the investigating agency has registered offences only against those who are involved in preparing fake no objection certificates. Except in Erode and Dindigul districts, in other cases, the role of beneficiaries have not been examined, despite our directions issued from time to time,” the court noted.

Thus, the court decided to transfer the probe to CID and directed the Additional Director General of Police, CB-CID to handover the entire papers relating to the investigation conducted so far to the appropriate authority that would be deputed by the Director of CBI.

Counsel for Petitioner: Mr.V.B.R.Menon, Petitioner-in-person

Counsel for Respondents: Mr V.T. Balaji, Mr Vijay Meghanath, Mr.E.Raj Thilak Additional Public Prosecutor, Mr.M.Vijayan for M/s.King & Partridge

Case Title: VBR Menon v. The Chief Controller of Explosives and Others

Citation: 2026 LiveLaw (Mad) 94

Case No: WP No.19983 of 2023