Three Phase Induction Motors are widely used for industrial and domestic applications. There are various faults that occur in induction motors like stator inter-turn fault, bearing's faults and eccentricity fault. Out of these faults, the rotor broken bar fault is very specific in squirrel cage induction machines. This paper deals with the detection of broken bars in three phase squirrel cage induction motor using finite element model of the induction machine. Finite element method is more precise than the winding function approach method, as it is based on the actual geometry of the machine. This paper uses a CAD package called “Magnet” for the Static 2D and Transient 2D analysis. The various machine parameters like flux density, flux function, magnetic energy, etc are calculated using this CAD package and their values are compared under healthy and faulty conditions.