V. Sasikala | Photo credit: FILE PHOTO
The Madras High Court on Thursday (April 2, 2026) dismissed a case filed by All India Puratchi Thalaivar Makkal Munnetra Kazhagam leader VK Sasikala alleged benamidar VSJ Dinakaran against the order passed by the Appellate Tribunal under the Benami Property Transactions Prohibition Act, 1988.
First Division Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan declined to interfere with the tribunal’s December 16, 2025 order on the 763-day delay by the Income Tax department in filing an appeal against the alleged benamidar.
“Once the Appellate Tribunal is satisfied with the grounds raised by the respondents herein in the interests of substantial justice, has exercised its discretion and excused the delay, this Court, referring to it, cannot interfere unless the exercise of the discretion is on untenable grounds or is arbitrary or perverse,” the Division Bench said.
The history of the case goes back to 2016 when former Chief Minister Jayalalithaa was hospitalized and her close aide Ms. Sasikala allegedly used ₹1,911 crore of demonetized notes to buy malls, mills and various other properties in Tamil Nadu.
Following Jayalalithaa’s death on 5 December 2016, Ms Sasikala was sentenced to four years in prison on 14 February 2017 in a disproportionate assets case. In October 2017, she came on parole for five days to meet her then ailing husband M. Natarajan at J. Krilanaprice’s T. Nagar residence, Chennai.
The Income Tax Department suspected that the real reason for the parole was to assess the alleged financial transactions that had taken place after the demonetisation of ₹500 and ₹1,000 notes on 8 November 2016 and therefore conducted a search at Ms Krishnapriya’s residence.
The search reportedly led to the recovery of photographs of the front and back of a single blank sheet from Ms Krishnapriya’s mobile phone. The letter contained a list of properties and various numbers written next to those names with the suffix “paid” and “to be paid,” and the niece allegedly admitted to taking the photo while her aunt was staying at her house.
Further investigation revealed that immediately after demonetisation, Ms Sasikala, through her assistants, identified individuals who were desperate to sell their valuable real estate but could not find deep-pocketed buyers. All these individuals were offered a handsome price for these properties, but on the condition that the money would be paid only in the demonetized currency.
All who agreed to the deal were paid the notes, which were kept in cardboard boxes at various locations in Chennai and the Kodanad Estate jointly owned by Jayalalithaa and Ms. Sasikala.
The recipients of these notes used them to settle the loans of smaller amounts they had obtained from various individuals and the rest was deposited in their bank accounts by forging other business transactions as the Center gave a deadline of 30 December 2016 to deposit the demonetised notes in the bank accounts.
The transactions were carried out after the property owners signed individual memorandums of understanding confirming the receipt of the money, but none of these documents included the name of the buyer. As the MoU did not result in either registration of sale deeds or transfer of shares, the IT department held these persons to be benamis of Ms. Sasikala.
Mr. Dinakaran, who allegedly received ₹18 million in demonetised notes for divesting his stake in Spectrum Mall in Perambur, Chennai, was also booked under the 1988 Act and his properties were temporarily attached. However, the Adjudicating Authority under the Act refused to confirm the attachment order and hence the IT department filed an appeal against such refusal with a delay of 763 days.
Published – 03 Apr 2026 0:56 IST
