Madras High Court Orders CBI Probe into ₹422 Crore Corruption Allegations at Neyveli Lignite Corporation
Petitioner alleges large-scale fraud by officials and contractors between 2022–2025
Court directs enquiry but declines immediate FIR registration
By Our Legal Correspondent
New Delhi: February 12, 2026:
The Madras High Court has directed the Central Bureau of Investigation (CBI) to conduct an enquiry into allegations of massive corruption at Neyveli Lignite Corporation India Limited (NLCIL), a public sector undertaking under the Union Coal Ministry. The order, passed by Justice M. Nirmal Kumar on February 11, 2026, came in response to a petition filed by a Cuddalore-based resident who alleged that senior officials of NLC, in collusion with private contractors, committed fraud and caused a wrongful loss of approximately ₹422 crore.
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Background of the Case
- Petitioner: A resident of Cuddalore, Tamil Nadu.
- Complaint filed: July 23, 2025.
- Allegations:
- Criminal misconduct, breach of trust, cheating, and falsification of accounts.
- Collusion between NLC officials and private contractors.
- Wrongful loss to the public exchequer estimated at ₹422 crore.
- Specific instances cited: Five major projects between 2022 and 2025 where irregularities were allegedly committed.
- Relief sought: Registration of a criminal case against NLC officials and contractors.
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Court’s Observations
Justice Nirmal Kumar directed the CBI to conduct a detailed enquiry but declined to order immediate registration of a First Information Report (FIR). The Court emphasized:
- Need for enquiry: Allegations of corruption in public sector undertakings must be thoroughly investigated.
- No premature FIR: FIR registration requires prima facie evidence; hence, enquiry must precede.
- Petitioner’s role: The petitioner must provide supporting documents to aid the investigation.
- Public accountability: Large-scale corruption in PSUs undermines public trust and must be addressed through independent investigation.
Why the Case Matters
- For NLCIL: As one of India’s largest lignite mining and power generation companies, allegations of corruption raise serious concerns about governance.
- For judiciary: The ruling reflects judicial caution—ordering enquiry before FIR ensures fairness and prevents misuse of criminal law.
- For public interest: Highlights the importance of transparency and accountability in public sector projects worth thousands of crores.
Wider Legal Context
Corruption in public sector undertakings has often drawn judicial scrutiny. The Supreme Court and High Courts have repeatedly emphasized that PSUs must maintain high standards of accountability.
- CBI’s role: As India’s premier investigative agency, the CBI is tasked with probing complex corruption cases involving public funds.
- Judicial precedent: Courts often direct preliminary enquiries before FIR registration to ensure that allegations are substantiated.
- Impact on governance: Such cases highlight systemic issues in procurement, contract management, and oversight in PSUs.
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Conclusion
The Madras High Court’s directive for a CBI enquiry into alleged ₹422 crore corruption at Neyveli Lignite Corporation underscores the judiciary’s commitment to accountability in public sector undertakings. By declining immediate FIR registration, the Court has balanced the need for investigation with procedural fairness. The outcome of the CBI enquiry will be crucial in determining whether criminal charges are warranted against NLC officials and contractors.
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