Madras HC declines CBI probe into alleged Palani temple land-sale fraud, says CB-CID investigation is progressing

The petitions sought transfer to the Central Bureau of Investigation (CBI) of the investigation arising from Crime No.151 of 2026, initially registered at Palani Adivaram Police Station concerning the alleged fraudulent preparation and registration of a sale deed relating to property claimed to belong to Arulmigu Dhandayuthapani Swami Temple/Madam, Palani.

The investigation was transferred to the CB-CID on 14.07.2026 and re-registered as Crime No.2 of 2026 on 15.07.2026.

The petitioners—a former MLA, the Chairperson of Palani Municipality and a Temple Trustee—alleged that the matter involved private persons, public officials and influential individuals, and sought a fair, comprehensive and court-monitored CBI investigation.

The State informed the Court that the CB-CID investigation was actively proceeding.

The investigating team had searched 16 locations in six districts, seized 207 documents, 12 mobile phones, three laptops and other electronic devices, recovered Rs.2,13,800/-, examined 115 witnesses, and collected departmental, banking, call-detail and Internet-protocol records.

Key suspects, including the concerned Sub-Registrar, a facilitator and an advocate, had been arrested; one accused subsequently died.

The Court also noted that the validity and title-related aspects of the sale transaction were involved in pending civil proceedings and had been considered in earlier writ litigation.

Whether the investigation in Crime No.151 of 2026, subsequently re-registered as Crime No.2 of 2026 by the CB-CID, should be transferred to the CBI on the ground that the existing investigation was inadequate, biased or lacked credibility.

Whether a court can direct transfer of an investigation or order a fresh investigation against persons who have not been impleaded and heard, particularly where the proposed transfer may adversely affect their reputation and legal interests.

Whether the petitioners had established sufficient locus and exceptional circumstances warranting judicial interference with an ongoing investigation, including the alternative prayer for appointment of a retired High Court Judge to monitor the investigation.

The Court exercised its jurisdiction under Article 226 of the Constitution, applying the principle that transfer of an investigation to the CBI is an extraordinary power to be used sparingly and only in rare and exceptional circumstances.

Relying on State of Punjab v. Davinder Pal Singh Bhullar, (2011) 14 SCC 770, the Court held that a prima facie case must be shown, the Court cannot order a roving inquiry merely on the basis of allegations, and persons against whom investigation is sought must ordinarily be impleaded and given a reasonable opportunity of hearing.

Under Vishal Tiwari v. Union of India, (2024) 4 SCC 115, and Himanshu Kumar v. State of Chhattisgarh, (2023) 12 SCC 592, transfer is justified only where there is cogent material showing glaring, wilful or deliberate inaction, inadequacy or prima facie bias, creating a likely failure of justice.

The Court also relied on Arnab Ranjan Goswami v. Union of India, (2020) 14 SCC 12, State of West Bengal v. Committee for Protection of Democratic Rights, (2010) 3 SCC 571, and K.V. Rajendran v. CBCID, (2013) 12 SCC 480, for the rule that mere allegations against the State police do not justify transfer and that no person has a right to insist upon investigation by a particular agency; the court should not interfere with the investigating agency’s discretion so long as the investigation is lawful.

The principles of natural justice stated in Divine Retreat Centre v. State of Kerala, (2008) 3 SCC 542, and D. Venkatasubramaniam v. M.K. Mohan Krishnamachari, (2009) 10 SCC 488, require impleadment and hearing of a person against whom an adverse investigative direction is sought.

The Court found no basis to conclude that the CB-CID had failed in its statutory duty or that its investigation was biased, tainted or deliberately inactive.

On the contrary, the extensive searches, seizures, witness examinations, collection of electronic and financial records, arrests and examination of the registration, HR&CE and revenue officials demonstrated that the investigation was progressing on proper lines.

The petitioners’ requests for examination of additional persons and issues amounted, in the Court’s view, to an attempt to control or redirect the investigation, whereas the choice of investigative methods and lines of questioning lay with the investigating agency.

The Court further held that the petitioners had not established a prima facie case against unidentified or additional persons sufficient to justify a roving CBI inquiry, nor shown exceptional circumstances or a likely failure of justice.

Their status as local public figures or a Temple Trustee did not, by itself, confer a right to demand investigation by the CBI; indeed, the Court questioned their claim of ignorance concerning the transaction and rejected their assertion that they were victims.

Since the existing accused and other potentially affected persons had not been given the hearing contemplated by the applicable precedents, the requested transfer could not be ordered on the material before the Court.

The CB-CID was directed to continue the investigation with confidence and proceed to its proper conclusion.

No order was made as to costs, and the connected miscellaneous petitions were closed.