Here are the 10 biggest developments in this story:
"The decision to remove the director, special director was taken to restore institutional integrity and credibility of CBI," said Union Minister Arun Jaitley, responding to opposition criticism. Both officers have accused each other of corruption and so, were being removed as an "interim measure" for a fair probe.
A 1 am government note signaled a CBI bloodbath after days of public fighting as the agency filed a case against its number two, Rakesh Asthana, accusing him of taking bribe in an investigation. Rakesh Asthana also wrote to the government alleging that it was his boss Alok Verma who had taken bribe in the same case.
The country's top anti-corruption body, the Central Vigilance Commission, recommended to Prime Minister Narendra Modi on Tuesday that both officers be sent on "compulsory wait" as "neither of these two officers nor any agency under their supervision can investigate charges against them."
The Central Vigilance Commission said Alok Verma had been "non-cooperative" and had created "willful obstructions in the functioning of the Commission".
National Security Adviser Ajit Doval reportedly summoned officers around 1 AM and asked for the order appointing an interim CBI chief. By 2 am, acting chief Nageswar Rao was in his new room at the CBI headquarters and signing off on a series of transfers.
On Mr Rao's orders, Alok Verma and Rakesh Asthana were barred from their offices and officers working with the CBI director were transferred. One officer in the director's team, AK Bassi, was moved to Port Blair "in public interest".
The opposition has accused the government of trying to protect Rakesh Asthana - a Gujarat cadre officer dubbed the Prime Minister's "blue-eyed boy" by Congress president Rahul Gandhi - who, after being appointed the number two officer last year despite stiff opposition from Alok Verma, handled major investigations.
Opposition parties including the Congress accused the government of violating rules by removing Alok Verma in the middle of his fixed two-year term, because he was about to begin investigating the Rafale jet deal controversy.
Rakesh Asthana yesterday took the CBI to court, asking for the charges against him to be cancelled and for protection from arrest. The Delhi High Court did not cancel the case, but sent notice to the CBI director and said Rakesh Asthana would not be arrested at least until it heard the case next Monday.
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