Justice Yashwant Verma, Burnt Cash and the Report of Inquiry Committee : A Fit case for PCA and PMLA

Justice Yashwant Verma, Burnt Cash and the Report of Inquiry Committee : 

A Fit case for PCA and PMLA 

 Anurag Deep,          LLM(BHU), PhD(Gorakhpur) Professor of Law, University of Delhi,         Professor [on Lien], Indian Law Institute,        adeep@law.ac.in 9654629241 

[This is a quick glance at the report. Pl treat it as working paper. Comments are welcome on Ph No and mail id] 

I. Facts and Committees 

On March 14/15, 2025 a huge amount of burnt cash was found in the store of Justice Yashwant Verma. He was a Delhi High Court judge at that time. Later he was transferred to Allahabad, his original place. CJ of Delhi submitted a preliminary report to the Chief Justice of India. Then the Chief Justice of India constituted a three member Committee to inquire into the matter. It consisted of Mr. Justice Sheel Nagu, Chief Justice of the High Court of Punjab & Haryana[Chairperson], Mr. Justice G.S. Sandhawalia, Chief Justice of the High Court of Himachal Pradesh, and Ms. Justice Anu Sivaraman, Judge of the High Court of Karnataka. 

Report of the Justice Sheel Nagu Committee 

The report of the three members committee consisting of high court judges is now available in public domain on June 19, 2025. The report is 64 pages. My first reading gives following findings- 

a. Store room in whose possession- Para 72 of the report etc. 

The store room where the burnt cash was found was in the effective possession of Justice Verma and his family members. It was well monitored for limited access. No outsider could get access without permission of Justice Verma or family members. Justice Verma argued that the store could be accessed by anyone who stays in the vicinity of the residence, like multi tasking staff, security persons etc. 

b. The storeroom was porous or not-Para 60 etc. 

 It was argued by Justice Yashwant Verma that the store room though in the vicinity of his residence, the access to the store room was open and porous. Staff, police persons, etc have easy access to the store room. So, anyone can place anything in the storeroom. The committee did not agree [para 60 also]. The jl Committee referred to the statement of witnesses [police staff, guards] that strict discipline was maintained. Only limited people on limited time had access the store room. Anyone roaming here and there was not a possibility. There were guards, PSO, trusted staff etc. 

c.  Whether burnt notes were found in the store room?

The store room contained burnt cash in huge amounts. There was ample evidence in the form of eye witness and electronic evidence. Para 68, 69, 70, besides other para acknowledges that the statement of police, fire staff who saw burnt cash, videographed, etc were taken on record and they establish the presence of burnt cash. The Committee discharged the obligation to establish that burnt cash was found. Now it was Justice Verma's turn to disprove it. He failed to do it. Justice Verma contended that the presence of any burnt cash in the store room was negative but could not establish it with any argument or evidence. The Committee, therefore, established that burnt cash as found in Justice Verma residence in the store room on March 14/15, 2025. 

d. Whether burnt notes were in possession of Justice Verma- Para 57- 

Any suspicious item found in the store was in the effective possession and control of the Justice Verma. The burnt cash was, therefore, in the possession of Justice Verma. He had to now explain from where these cash came in the house. The burden is on him under administrative proceedings. The prima facie case under PCA is made out. 

 Para 73-The store was in his total possession. The burnt cash found was in his total possession unless he establishes that it was planted by someone or was the result of a conspiracy by someone. He could establish by conveying or pinpointing the name of those conspired or the real owner of the cash. As Justice Verma failed to make any convincing defence once possession and cash was established, the Committee found that the cash was occupied by Justice Verma whose source was not revealed by him. 

e.  Who removed the burnt cash

The Committee came to the conclusion that the trusted staff of Justice Verma, ie “Rahil/Hanuman Parshad Sharma and Rajinder Singh Karki, Private Secretary to Justice Varma were instrumental in removing the burnt money/cash from the store room during the wee hours of 15.03.2025.” They did it after the Police and fire staff left the store room in the midnight once the fire was doused. The staff of Justice Verma made false deposition deliberately. The daughter of Justice Verma, Ms Diya Verma also made statements contrary to what is established by facts. 

f. Conduct of Verma-Para 59

The conduct of justice Verma after arrival from Bhopal to Delhi is unnatural. He did not visit the burnt site immediately ie 5pm and went into it at 9pm. This also draws adverse inference. 

g. Conspiracy theory Para 60

It is dedicated to conspiracy theory, ie someone wants to frame Justice Yashwant. As the residential area was under strict security with trusted staff the conspiracy theory is not maintainable. Similarly arson or any explosion theory was not initially apprehended by Justice Verma. It was presented by Justice Verma at a later stage, which also creates doubt whether it was afterthought. At para 61 the Committee wondered why any police complaint was not registered against conspiracy and arson, as he apprehended. 

h. Contradictory or inconsistent statements- Para 61

On April 7, 2025 Justice Yashwant Verma made a statement that the guards and the Police persons on duty were given strict instruction to remain on duty to deal with any emergency, ensure restricted access and to assist his ailing mother. But on April 17 and 27, 2025 he stated that the area is porous and easy access. 

i. Transfer order

The committee also found it relevant that the transfer order was quietly accepted by Justice Yashwant Verma. When so much happened, he could have inquired about the reason for the transfer. This reasoning of the Committee is not appreciable as his transfer was unconnected with the incident. Probably the transfer was in the process before the incident came to light of the CJI. 

j.  CCTV footage

There was CCTV in the residential premise of Justice Yashwant Verma. He did not make any effort to secure CCTV footage once the incident came to the knowledge of Justice Verma. This could be very strong evidence to support the defence of Justice Verma. There is no explanation why was it not done. The Committee found his contentions totally unbelievable. 

k.  CONCLUSION of the Committee is reproduced as under-

para 79. This Committee thus holds that the cash/money was found in the store room of 30 Tughlak Crescent, New Delhi officially occupied by Justice Varma. More so, the access to the store room has been found to be within the covert or active control of Justice Varma and his family members and that by way of strong inferential evidence, it is established that the burnt cash/money was got removed from the store room during the wee hours of 15.03.2025 from 30 Tughlak Crescent, New Delhi.  

para 80. Keeping in view the direct and electronic evidence on record, this Committee is firmly of the view that there is sufficient substance in the allegations raised in the letter of Hon'ble the Chief Justice of India dated 22.03.2025 and the misconduct found proved is serious enough to call for initiation of proceedings for removal of Justice Yashwant Varma, Judge of the Allahabad High Court.

 Impeachment proceeding is under process by the Government of India. 

II. Criminal Proceeding Against Justice Yashwant Verma 

Whether there are possibilities of criminal proceedings also or not is also subject matter of this discussion. Two possible proceedings can be started under the Prevention of Corruption Act, 1988 and the Prevention of Money Laundering Act, 2002. The discussion is as under-

A. PCA

Section 13 of PCA, 1988 is as under

s 13. Criminal misconduct by a public servant. -

(1) A public servant is said to commit the offence of criminal misconduct,- if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or any property under his control as a public servant or allows any other person so to do; or

(b) if he intentionally enriches himself illicitly during the period of his office.  

Explanation 1. - A person shall be presumed to have intentionally enriched himself illicitly if he or any person on his behalf, is in possession of or has, at any time during the period of his office, been in possession of pecuniary resources or property disproportionate to his known sources of income which the public servant cannot satisfactorily account for.

Explanation 2. - The expression "known sources of income" means income received from any lawful sources.] [Substituted by Act No. 16 of 2018, dated 26.7.2018.]

(2)Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine.

A judge[here Justice Verma] is a public servant. A large amount of burnt cash was found in his possession. This is disproportionate to his known source of income. The legal presumption comes in picture through section 13(b)(explanation 1). But it does not make Justice Verma guilty. He has the duty and opportunity to “satisfactorily account for” [see explanation 1 last line] the burnt notes. If he is able to explain, the presumption against him is rebutted. For this purpose an inquiry can be and has to be started by the police, CBI etc. FIR is not required to be registered for such an inquiry against a judge. If the Judge is cooperating in the investigation, no arrest will be necessary. If he is giving vague answers, exercising his right to silence, the police will have to look for the laws on arrest. The State should seek permission of the Chief Justice of India [as per Justice Veeraswami, a constitution bench case of 1991] to formally register an FIR. There should not be any delay in this.

B. The Prevention of Money-Laundering Act, 2002

Can there be a case under PMLA-- PMLA, 2002 comes into picture when there is an offence called scheduled offence]. An offence under PCA is a scheduled offence. So PMLA automatically comes into picture as the offence under s 13 is made out for the police. But as per conventional argument [before 2019] an element of money laundering has to be shown, ie the burnt notes were black money and they were projected as white money by the accused. In this case the possession of money is denied by Justice Verma. The ED has first to establish that the money is proceeds of crime.

The Prevention of Money-Laundering Act, 2002

Section 2(1)(u)-- “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the property equivalent in value held within the country] [or abroad]; [post 2019 definition]

Applying elements of PMLA in the facts of Justice Verma case

Applying section 2(1)(u) of PMLA the burnt notes are proceeds of crime because it is a “property derived or obtained, directly or indirectly, by any person [here Justice Yashwant Verma] as a result of criminal activity relating to a scheduled offence[here section 13(b)(explanation 1) punishable under section 13(2) of PCA]. Section 3 of PMLA is as under-

Section 3. Offence of money-laundering.— Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the [proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering.

[Explanation.—For the removal of doubts, it is hereby clarified that,—  

(i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:— (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever;

(ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.]  

Justice Verma is found in possession of unaccounted property [burnt notes]. A judicial body has made a finding. It is reason to believe for ED that he is directly or indirectly involved in the acquisition of burnt notes. He is denying the burnt notes which amounts to concealment of money and its source under section 3 of PMLA. The definition also requires that the accused must project the property as untainted as per pre 2019 position. Justice Verma has not done it. He is not presenting the money as untainted. Indeed he is denying any possession of proceeds of crime. But his denial is weak because the presumption clause of PCA, 1988 [section 13 with explanation 1 read with section 2(1)(u) of PMLA goes against him for now.] The explanation under section 3 of PMLA makes it clear that projection of property as tainted is not essential. The words in the main text uses “and” but in the explanation it is “or”. This was done through the 2019 amendment and declared constitutionally valid by Vijay Madanlal Chaudhary case in 2023, though the judgement is under review.

III. The way ahead 

It is to be noted that above facts are not sufficient to establish guilt of conviction beyond reasonable doubtys under PCA or PMLA but is legally sufficient to register FIR, investigation, arrest if necessary, chargesheet, framing of charges and the trial under PMLA. In other words the case of Justice Yashwant Verma is a fit case under PCA, 1988 as well as under PMLA, 2002. The CBI, ED needs to move swiftly to maintain rule of law. The governmant and the Parliament need to remove him as early as possible. Howsoever big you may be, the law is above you. यतो धर्मस्ततो जयः

About rule of law our Bhartiya Knowledge System was very clear: 

तदॆतत-क्षत्रस्थ क्षत्रं यद्धर्म: । तस्माध्दर्मात्परं नास्ति। अयो अबलीयान् बलीयांसमाशंसते धर्मेंण, यथा राज्ञेवम।

- बृहदारण्यक उपनिषद, 1.4.14.

धर्म (विधि/कानून) राजाओं का भी राजा है; उनसे कहीं अधिक शक्तिशाली और कठोर; कानून से शक्तिशाली कुछ नहीं हो सकता, जिसकी सहायता से सर्वोच्च सम्राट और बलवान पर निर्बल भी प्रबल हो सकता है। 

"Law is the king of kings, far more rigid and powerful than they; there is nothing higher than law; by its prowess, as by that of the highest monarch, the weak shall prevail over the strong."

V.R. Krishna Iyer, Judge, Supreme Court of India in his Inaugural Address at the Second State Lawyers' Conference, Andhra Pradesh opined: 

Our Upanishadic doctrine which departs from Austinian theory, is, if I may quote Dr  Radhakrishnan, that 'sovereignty implies subjection to law. No one is above the law, not even the sovereign'. Sri Gajendragadkar [while delivering Tagore Law Lectures on The Indian Parliament and the Fundamental Rights, 1972]quoted the Upanishad to say:

"Law is the king of kings, far more rigid and powerful than they; there is nothing higher than law; by its prowess, as by that of the highest monarch, the weak shall prevail over the strong."

And Indian dharma, remember, has asserted, long before the sociological school in the West, that law is the Social Engineering Service of society.

When the impeachment process of Justice Ramaswami was under consideration of the Parliament, the political paries made it an issue of south verse north. The corrupt practice by a HC judge[later in the SC] was protected by the narrow politics inside the Parliament. The Dharma did not prevail. The Adharma prevailed and corrupt practice was not punished. This went against rule of law.  It was a dark history of the Parliament where the ruling party protected the dark side of the judicary. Justice Yashwant Verma may be a strong and powerful person. But the law [dharma] is above him, above any one. He must resign to uphold the minimum content of dharma and rule of law. 

  लोभः सदा विचिंत्यो लब्धेभ्यः सर्वतो भयं दृष्टम् | कार्यस्विचारो लोभविमूढस्य नासस्त्येव ||

Greed in men is always a matter of concern and is questionable, because if a person is seized by greed, he loses the ability to distinguish between good and bad deeds and is subject to fear all around him. Greedy persons do not hesitate even to indulge in crimes with a view of attaining more wealth, with very disastrous consequences.

Krishna Shastri Bhatavadekar, Subhashita Ratnakara,(1888) available at https://archive.org/details/in.ernet.dli.2015.327797/page/n11/mode/2up