In March last year, stacks of cash were found at Justice Varma’s official residence in Delhi following a massive fire. The then Chief Justice took cognisance of the incident and transferred Justice Varma from the Delhi High Court to the Allahabad High Court, with directions to its Chief Justice not to assign him any judicial responsibilities. The court had subsequently withdrawn judicial work from Justice Varma at the Delhi High Court.

His resignation letter to the President of India reportedly does not mention any reason for stepping down. “While I do not propose to burden your august office with the reasons which have constrained me to submit this missive, it is with deep anguish that I hereby tender my resignation from the office of Judge of the Hon’ble High Court of Judicature at Allahabad, with immediate effect. It has been an honour to serve in this office," Verma wrote in his resignation letter.

He took oath on April 5, 2025, and is currently facing an in-house inquiry, with the possibility of parliamentary removal proceedings in connection with the allegations.

With this move, Justice Varma is understood to lose the constitutional immunity available to sitting judges, making it possible for a criminal case to be registered against him and for arrest proceedings to follow. However, these steps would take effect only after the President of India accepts his resignation.