Madras High Court directs CBI to probe corruption complaint against Neyveli Lignite officials

The Madras High Court has directed the Central Bureau of Investigation (CBI) to conduct an enquiry into allegations of large-scale corruption in the projects of Neyveli Lignite Corporation India Limited (NLC), a public sector undertaking under Union Coal Ministry [Manikandan Vs Director, CBI].

However, the Court declined to order immediate registration of a first information report (FIR).

Justice Nirmal Kumar passed the order on February 11 in a petition filed by a Cuddalore-based resident seeking a direction to the CBI to register a case based on his complaint dated July 23, 2025

The petitioner alleged that senior officials of NLC along with private contractors and entities had committed criminal misconduct, breach of trust, cheating and falsification of accounts between 2022 and 2025, causing wrongful loss of approximately ₹422 crore.

He cited five specific instances in this regard:

• Award and revision of contracts in the Talabira Thermal Power Project in Odisha in violation of agreement conditions .

• Offloading of township construction work to agencies on a nomination basis, leading to alleged escalation of project cost to ₹524.50 crore .

• Grant of extension for pond ash transport contracts at ₹1 per ton despite higher market value.

• Alleged misuse of CSR funds .

• A purported forged authorisation letter used in dealings with EXIM Bank.

The complaint was forwarded internally within the CBI and the petitioner was contacted for further details. However, no FIR was registered, prompting the petitioner to approach the High Court.

The Court noted that although the petitioner referred to nine supporting documents in his complaint, copies of those documents were not placed before the Court.

It observed that merely because a complaint is filed, an FIR cannot be registered straightaway unless it is verified and found to disclose prima facie material.

The judge also noted that NLC India has an internal vigilance mechanism and was subject to multiple layers of audit, including statutory and CAG audit.

"The petitioner is making serious allegations against the top officials of NLC India Ltd., contractors and others. Merely because a complaint is filed, an F.I.R. cannot be registered straightaway, unless it is verified and found there is prima-facie material to proceed further. It is also to be seen that NLC India Ltd. has got a Vigilance Department, which had enquired some of the allegations made by the petitioner," the Court stated.

The Court directed the CBI to summon the petitioner for enquiry on February 23 and on subsequent dates, if required.

The petitioner was directed to appear, furnish supporting documents and cooperate with the enquiry, after which the CBI may take action in accordance with law.

The petitioner was represented by advocate G Ravikumar.

CBI was represented by Special Public Prosecutor K Srinivasan.

[Read Judgment]