In a significant development in the ongoing Justice Yashwant Varma cash-at-home row, the Supreme Court of India on Wednesday, July 23, 2025, announced that it would constitute a special bench to hear the petition filed by Justice Varma, who has been accused of misconduct following the discovery of a large sum of half-burnt cash at his official residence. The case has captured national attention due to its constitutional implications, involvement of senior judiciary, and the rare move recommending the impeachment of a sitting judge.

CJI Gavai Recuses Himself

The development came after Chief Justice of India D.Y. Chandrachud, who was presiding over the bench along with Justices K Vinod Chandran and Joymalya Bagchi, stated that a special bench will be constituted to hear the matter. The CJI recused himself from the proceedings, citing his prior involvement in the process which included the internal inquiry and subsequent developments.

“We will take a call and constitute a bench,” the CJI told senior advocate Kapil Sibal, who appeared on behalf of Justice Varma and urged for urgent listing of the matter. The request was made to challenge the in-house panel’s findings and the May 8 recommendation by the then CJI Sanjiv Khanna, which proposed initiating impeachment proceedings against Justice Varma.

Justice Varma’s Legal Plea

In his petition, Justice Yashwant Varma, currently repatriated to the Allahabad High Court and kept off judicial duties, has denied all allegations of misconduct. The plea argues that the inquiry committee’s findings were unjust and based on procedural irregularities. It highlights several constitutional concerns, asserting that the inquiry reversed the burden of proof, forcing Justice Varma to prove his innocence rather than requiring the committee to establish guilt beyond doubt.

Justice Varma also stated that the inquiry panel operated with preconceived notions and that the entire process was rushed, compromising procedural fairness. He alleged that he was not granted adequate opportunity to defend himself and that the final conclusion was driven by a predetermined narrative, which he argues is contrary to the principles of natural justice.

Findings of the Inquiry Panel

The inquiry panel, headed by Chief Justice Sheel Nagu of the Punjab and Haryana High Court, had been constituted to investigate the allegations of misconduct after the accidental fire at Justice Varma's official Delhi residence led to the discovery of half-burnt currency in a storeroom. The incident occurred at 11:35 PM on March 14, and the subsequent probe lasted 10 days, during which 55 witnesses were examined, and the residence was thoroughly inspected.

The report concluded that Justice Varma and his family had covert or direct control over the area where the cash was found. It determined that this amounted to misconduct serious enough to recommend his removal from office under the constitutional provision.

Impeachment Recommendation and Political Involvement

Following the findings, the then Chief Justice of India Sanjiv Khanna sent a letter to President Droupadi Murmu and Prime Minister Narendra Modi, formally recommending impeachment proceedings under the relevant constitutional mechanism. The move sparked debate among legal circles and political establishments, given the rarity and seriousness of recommending the impeachment of a High Court judge.

It should be noted that under Article 124(4) and 124(5) of the Constitution of India, the process to remove a judge involves a parliamentary procedure, initiated upon recommendation from the judiciary. Justice Varma’s plea seeks to invalidate that very recommendation by raising substantive constitutional questions regarding due process, natural justice, and judicial independence.

Kapil Sibal’s Submissions Before the SC

Renowned constitutional expert and senior advocate Kapil Sibal, who appeared for Justice Varma, urgently mentioned the matter before the Chief Justice. He submitted,

“This is in respect of his removal. We have raised some constitutional issues. I request your lordships to list it as early as possible.”

The request was acknowledged by the CJI, who assured the constitution of a special bench in light of the recusal and the importance of the issues involved.

What Happens Next

With the CJI recused, a new bench is likely to be notified in the coming days. Legal experts suggest that the case could set an important precedent in judicial accountability, scope of in-house committees, and constitutional protections afforded to sitting judges. The petition filed by Justice Varma may also prompt further discussion on judicial reform, particularly the mechanisms through which allegations of misconduct are handled within the judiciary.

Broader Implications

The Justice Varma cash-at-home controversy goes beyond just the discovery of unaccounted money. It challenges the integrity of internal judicial processes, questions the powers of Chief Justices, and brings to the forefront the checks and balances between the judiciary and the executive.

If the Supreme Court bench finds procedural flaws in the in-house panel’s conduct, it could lead to revocation of the impeachment recommendation, a rare outcome in Indian judicial history. Conversely, upholding the report may pave the way for parliamentary proceedings against Justice Varma, testing the independence of the judiciary and the legitimacy of internal inquiries.

The matter is also being keenly watched by the Bar, legal academia, and civil society, with many expressing concern about fairness, transparency, and institutional accountability. The eventual ruling by the special bench could serve as a landmark in defining procedural fairness within the Indian judicial framework.

Conclusion

As India’s judicial ecosystem braces for another constitutional showdown, the upcoming hearing on Justice Yashwant Varma’s plea will be critical in determining the limits and powers of internal judicial mechanisms and the safeguards available to judges facing serious allegations. With CJI Gavai’s recusal, the stage is now set for an impartial adjudication of what may become one of the most consequential judicial cases in recent years.

Stay tuned for real-time updates on the Supreme Court Justice Varma plea, developments in the Justice Varma impeachment case, and how the Supreme Court navigates the intersection of judiciary, constitution, and accountability.

The Upcoming IPOs in this week and coming weeks are Sellowrap Industries, Repono, Shanti Gold International, Brigade Hotel Ventures, Patel Chem Specialities, NSDL.

The Current active IPO are Indiqube Spaces, GNG Electronics, TSC India, Monarch Surveyors & Engineering Consultants, Swastika Castal, Savy Infra.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.