Chennai, February 27, 2026 – In a sharp rebuke to the state police’s handling of a major scam, the Madras High Court on Thursday ordered the Central Bureau of Investigation (CBI) to take over the probe into the alleged use of hundreds of fake No Objection Certificates (NOCs) to set up petrol, diesel, and auto-gas retail outlets across Tamil Nadu.
The First Division Bench comprising Chief Justice Manindra Mohan Shrivastava and Justice G. Arul Murugan held that the Crime Branch-CID (CB-CID) investigation was “not fair and independent” and had failed to examine the role of the beneficiaries despite repeated court directions.
“Though ordinarily, this Court would be slow in directing handing over of investigation to any other agency, however, in the present case… despite our repeated orders, the agency is not holding investigation in proper direction… We are therefore constrained to draw an inference that the investigation is not fair and independent,” the Bench observed.
The court directed the Additional Director General of Police, CB-CID, to hand over all case files and investigation papers to the CBI immediately.
### Scam that surfaced in a habeas corpus petition
The racket first came to light in October 2020 during the hearing of a routine habeas corpus petition concerning the preventive detention of two men — K.L. Sivakumar and C. Jayaprakash — accused of forging NOCs bearing the seal of the Greater Chennai City Police Commissioner.
Suspecting the fraud was not limited to Chennai, the then Division Bench directed the Director General of Police to verify records across all districts. The DGP later reported that at least 91 fake NOCs appeared to have been used to establish fuel outlets statewide.
In 2023, advocate V.B.R. Menon filed the present public interest writ petition (WP No. 19983 of 2023) seeking cancellation of final explosive licences granted to outlets run by Indian Oil Corporation and Nayara Energy on the strength of forged NOCs. The case was transferred to the CB-CID.
### Beneficiaries “directly contacted middlemen and paid lakhs”
The court noted that beneficiaries bypassed official channels and approached middlemen, paying huge sums to obtain fake NOCs without any spot inspection or application to district collectors or police authorities — a mandatory requirement under the rules.
“The material which is floating at the surface required a much deeper and fair investigation to examine the role of the beneficiaries for whose benefit the entire system was operating,” Chief Justice Shrivastava wrote.
While the CB-CID filed cases and charge sheets against fabricators and middlemen, it took almost no action against the actual operators of the fuel stations — except in Erode and Dindigul districts. In Chennai and other areas, the beneficiaries continued to run the outlets untouched, the petitioner submitted.
The Bench expressed anguish that despite multiple opportunities and periodic progress reports sought by the court, the state agency had failed to produce a “satisfactory response” or conduct a proper probe.
### CBI to take over entire investigation
The court made it clear that the CBI probe should cover the entire racket across the state, including the role of beneficiaries, officials, and oil marketing companies that accepted the forged documents.
The order is expected to have far-reaching consequences, as it may lead to cancellation of licences and possible sealing of dozens of illegal fuel outlets posing safety risks to the public.
The CBI has been given no specific timeline in the order, but the court directed immediate transfer of all records.
This is the latest instance of the Madras High Court stepping in to ensure independent investigation in high-profile cases involving alleged state-level irregularities. The development comes amid growing public concern over the safety and legality of numerous petrol bunks that have mushroomed across Tamil Nadu in recent years.
For More News Updates Follow Us On www.tconews.in
