CBI Court Hyderabad holds officials guilty of falsifying records to illegally exchange banned notes into new currency
Hyderabad / New Delhi: In a significant judgment linked to financial crimes during the demonetisation period, a Special CBI Court in Hyderabad has convicted two officials of the Department of Posts for misappropriating ₹27.27 lakh. The court sentenced Adapa Srinivas, then Treasurer, and U. Rajyalakshmi, then Postal Assistant at Humayun Nagar Sub-Post Office, to two years rigorous imprisonment each, along with a fine of ₹65,000.
The court found that the accused had criminally conspired to unlawfully exchange demonetised ₹500 and ₹1000 currency notes with newly issued legal tender, in complete violation of the Central Government’s guidelines issued during the 2016 note-ban exercise.
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How the fraud was executed
According to the case details, the accused exploited the initial chaos and high cash dependency during the first days of demonetisation. Between 10 November 2016 and 24 November 2016, they:
- Exchanged Withdrawn Old Series (WOS) notes worth ₹27,27,397 with new currency
- Carried out the exchanges without mandatory Annexure-II forms
- Falsified official records and entries to hide the misappropriation
- Diverted public funds for personal gain, betraying their fiduciary duty
The fraud surfaced after an internal review, following which the Senior Superintendent of Post Offices, Hyderabad City Division, lodged a complaint with CBI.
Investigation and legal proceedings
Stage Date
- FIR registered 31 August 2017
- Chargesheet filed 25 October 2019
- Conviction & sentencing 01 December 2025
During the investigation, CBI scrutinised:
- Transaction logs
- Cash registers and treasury records
- Currency exchange vouchers
- Statements of witnesses and senior officials
The agency concluded that the officials had acted knowingly and with malafide intent, attempting to exploit a nationwide monetary reform for illicit benefits.
Court: ‘A serious breach of public trust’
In its verdict, the court observed:
“The actions of the accused defeated the objective of demonetisation and amounted to a breach of the trust reposed in public service institutions.”
The judge stressed that misappropriation of public money during a nationally sensitive policy implementation represented a grave economic offence warranting stern punishment. The court underlined that such behaviour, if unchecked, could erode public confidence in government entities and financial controls.
CBI: Zero tolerance against corruption
Welcoming the verdict, CBI officials stated that the conviction highlights the agency’s commitment to tackling corruption across public departments. The remarks included:
“This sentence serves as a warning for officials attempting to misuse their positions.”
“CBI remains vigilant in financial fraud cases, particularly those linked with demonetisation processes.”
The agency reiterated that enforcement against disproportionate gains and diversion of public funds will continue with full vigour.
Experts: Strong signals against opportunistic corruption
Legal analysts say that demonetisation-related fraud cases often involve:
- Manipulation of procedural gaps
- Collusion between officials and beneficiaries
- Rapid illegal exchange of currency during early restrictions
They observe that courts have progressively tightened their stance, calling such crimes deliberate assaults on economic discipline, especially during a major national financial transition.
Conclusion
This conviction reinforces multiple key messages:
- Public money is not negotiable property for officials handling it
- Any violation of financial rules, particularly during critical policy events, invites severe legal consequences
- Anti-corruption efforts in government services remain uncompromising
By sending two government employees to prison, the judiciary has affirmed that:
Tampering with official records and siphoning public funds — no matter the circumstances — will meet the full force of the law.
