Delhi HC flags CBI’s inaction in Sarfaesi misuse case linked to Chidambaram family
Rejecting Indian Overseas Bank’s (IOB) petition, the Delhi High Court has asked CBI why the agency needs sanction for prosecuting bank officials in the former Finance Minister P Chidambaram’s family involved hotel grabbing case. In an order dated December 23, Justice Amit Mahajan asked CBI to file a fresh affidavit regarding the probe involving Chidambaram’s wife Nalini and her sister, late Padmini, in grabbing a Hotel – Comfort Inn – in Tiruppur by misusing the Sarfaesi Act by illegally declaring NPA.
For the past years, CBI was telling the High Court that they had found illegality in declaring NPA and misuse of the Sarfaesi Act to conduct an auction of the hotel in favour of Padmini in 2007 in connivance with IOB officials. The CBI registered a Preliminary Enquiry in 2017, after the promoter of the hotel, Dr. Kathirvel, approached the High Court. Giving details of the probe, CBI said that the bank was not giving sanction to prosecute the errant four officials.
On December 23, Kathirvel’s advocate Yatinder Choudhary pointed out that CBI registered the probe in 2017 and not needed sanction to prosecute, which was mandated inthe 2018 amendment to the Prevention of Corruption Act. Justice Mahajan also asked why the CBI need sanction to prosecute when the probe started in 2017 and asked the CBI to file a fresh affidavit. In the previous year, the High Court had asked CBI to registe case, and the agency was excusing that IOB was not giving sanction.
“Let an appropriate affidavit be filed by CBI in regard to the contention raised by the petitioner ….It appears that the CBI, despite initiating a preliminary enquiry in the complaint filed by the petitioner, had not taken any further action on the ground that a sanction for prosecution, under Section 17A of the PC Act, was refused by the bank…. That no sanction was required, let an appropriate affidavit, as directed above, be filed before the next date of hearing,” said the order passed by Justice Amit Mahajan, listing the case on February 12, 2026.
“The present application is filed by the IOB seeking impleadment in the present case. In the opinion of this Court, IOB is not a necessary party and is only a sanctioning authority. The issue relates to an investigation by the CBI and whether any sanction was required for the said purpose. IOB is neither the accused nor the complainant and therefore, is not a necessary party. The present application is, therefore, dismissed,” said the High Court. CBI, in its report to the High Court, named five officers of IOB acting in connivance with Chidambaram’s family members in hotel grabbing.
In 2024, the Delhi High Court asked the CBI to register a case, and the CBI was excusing that the IOB was not giving sanction to prosecute.[1]
In 2007, when Chidambaram was Finance Minister, wife Nalini’s sister Padmini (now late) expressed a desire to buy Hotel Comfort Inn, Tiruppur, and promoter Dr. Kathirvel rejected. Soon Indian Overseas Bank declared all the business of Kathirvel as a Non-Performing Asset (NPA) and illegally conducted an auction under the Sarfaesi Act, and Padmini got the hotel through the Bank’s auction. Kathirvel complained to Finance Minister Chidambaram about his family misusing banking norms and grabbing his hotel. Nalini offered Rs.3 crore as compensation. Kathrivel had produced the cheque given by Nalini and her audio conversations to CBI. As soon as the CBI started a probe in 2017 after the High Court’s direction, the hotel owner, Padmini, passed away.
PGurus in 2016 published a detailed complaint of Kathirvel to CBI on how Chidambaram’s family members grabbed a hotel, misusing power.[2]
Reference:
[1] Delhi High Court orders CBI to take steps in Chidambaram family’s hotel grabbing case. Why did Indian Overseas Bank block CBI probe? – Mar 15, 2024, PGurus.com
[2] Businessman Kathirvel files complaint with CBI against Chidambaram, family & IOB for hotel grab – Sep 25, 2025, PGurus.com
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