Corruption In NCLT : CBI Probing Whether Legal Firms and IRPs Acting as Middlemen?

The National Company Law Tribunal (NCLT), once envisioned as a pillar of corporate justice, is now at the center of a widening corruption probe. The Central Bureau of Investigation (CBI), recently launched an inquiry into an alleged bribery scheme involving a legal firm accused of demanding ₹1 crore to secure a favourable order from the National Company Law Tribunal (NCLT), Mumbai. On March 10, 2025, the CBI conducted searches at multiple locations, including the premises of a retired NCLT official now working as a private consultant.

The bribe, initially set at ₹1.5 crore, was negotiated down to ₹1 crore, with ₹20 lakh paid as an advance to the firm’s HDFC Bank account. Sensing foul play, the complainant, Vinay Saraf, alerted the CBI, leading to an investigation that is now tracking financial transactions and call records for evidence of a broader conspiracy.

CBI insiders suggest that the case could reveal a systematic racket of legal professionals and IRPs serving as middlemen, securing orders in exchange for money. The agency has not ruled out the involvement of sitting and former NCLT officials, and the investigation is expected to widen in the coming weeks.

The accused, Mahwsh A Bhat (alias Mahi Bhat) and her associate Akshat Khetan of AU Corporate Advisory, reportedly used “fees” as a code for the bribe. After Saraf paid ₹20 lakh as an advance, he alerted the CBI, triggering a formal probe.

The CBI has registered a case under the Prevention of Corruption Act, 1988, and the Indian Penal Code (IPC). Investigators are analyzing call logs and digital evidence, with Inspector Seema Randive leading the probe.

Second Case Against Mahi Bhat

This is not the first time Mahi Bhat’s name has surfaced in corruption allegations linked to NCLT. Advocate Mathew Nedumpara had earlier accused Mahi Bhat of involvement in another bribery deal worth ₹75 lakh, alleging that she acted as a conduit in influencing NCLT orders. He had also sought the recusal of a tribunal member, citing concerns over impartiality.

However, the NCLT bench rejected Nedumpara’s plea, stating that mere allegations without substantive proof could not justify a recusal. The bench criticised Nedumpara’s plea as an attempt at “bench hunting” and emphasised that judicial officers could not be disqualified solely on the basis of unverified claims, reinforcing the principle that decisions should be based on legal merits rather than external pressures.

While the rejection was based on legal principles, the ruling did little to dispel concerns over the alleged role of legal practitioner as a fixer within NCLT circles.

NCLT Ahmedabad: Procedural Manipulations in ₹100 Crore Fraud Case

The credibility of NCLT also came under scrutiny in 2023 when the CBI initiated a probe into its former chairman for allegedly providing wrongful advantages in a ₹100 crore fraud case. NCLT technical member Hemant Sarangi was named as an accused, but despite being under investigation, he continued presiding over cases in the Ahmedabad bench.

A case involving Montirox Resort—a ₹300 crore hotel and real estate project—highlighted serious procedural lapses in NCLT’s handling of corporate disputes. The matter, which involved allegations of fraudulent asset transfers by Vikram Bakshi (former McDonald’s India partner) and his associate Rajeev Puri, was delayed for months despite NCLAT’s directive for swift resolution.

Notably, judicial member Deepti Mukesh and technical member Hemant Sarangi, whose bench had been dissolved in May 2020, continued hearing the case in September 2020, raising concerns over judicial propriety. Orders were passed without recorded statements or issued notices, and the disbanded bench scheduled a last-minute hearing at 11:30 PM on May 30, 2021—just before the Principal Bench was to deliver its ruling—resulting in a conflicting order.

Delhi Gymkhana Club Case

In another case in 2023, terminated Secretary of the Delhi Gymkhana Club (DGC), Ashish Khanna, petitioned NCLT to challenge his termination. He sought the recusal of technical member Hemant Sarangi, arguing that Sarangi was a member of the club, creating a conflict of interest.

Khanna’s application accused Sarangi of violating Section 419(3) of the Companies Act, 2013, and raised concerns about Acting NCLT President hearing cases despite his own extension being pending with the Ministry of Corporate Affairs (MCA).

August 2022: ₹1,000 Crore ‘Cash-for-Orders’ Scam in NCLT Chennai

In August 2022, a resolution professional (RP) blew the whistle on an alleged ₹1,000 crore corruption racket within NCLT Chennai, exposing how judicial orders were allegedly sold to the highest bidder.

According to the petition filed by V. Venkata Sivakumar, a senior chartered accountant and liquidator of Odisha-based Jeypore Sugars, a well-organized bribery network ensured that certain litigants received favourable rulings in exchange for illicit payments.

Former NCLT Chennai Technical Member Anil Kumar was at the center of the allegations. It was alleged that for months, applications were deliberately delayed, only to be resolved in favour of the highest bidder on the last day of his tenure. Sivakumar's petition before the National Company Law Appellate Tribunal (NCLAT) and the Chief Justice of India sought a CBI probe into the allegations.

A shocking revelation, as reported by ET Prime, in the petition detailed how Anil Kumar allegedly set up an informal ‘committee’—comprising his brother-in-law, a former law research associate, and junior advocates—to negotiate bribes.

Despite these serious accusations, Anil Kumar denied any wrongdoing, stating that he would “meet the petitioner legally.”

However, the fact that he was not among the NCLT members who received tenure extensions suggests that the Ministry of Corporate Affairs (MCA) took note of the complaints against him.

Arrest of an IRP in ₹20 Lakh Bribery Case

The involvement of Insolvency Resolution Professionals (IRPs) in bribery deals is another emerging concern. In May 2022, the CBI arrested an IRP attached to NCLT Mumbai, along with two private individuals, including a Mumbai-based jeweller, in a ₹20 lakh bribery case.

The IRP allegedly demanded the bribe to “settle” an NCLT matter and sought an initial payment of ₹2 lakh, which was collected in Pune through a middleman. CBI set up a trap and caught the intermediary red-handed while accepting the money. This led to the arrest of the IRP and the Mumbai-based jeweller. Searches conducted at the accused’s premises in Pune and Navi Mumbai led to the recovery of incriminating documents. The three accused were presented before the Special CBI Court in Pune.

NCLT’s Response

The NCLT has, time and again, dismissed the pleas alleging corruption and bias generally calling them “wild”, “unpalatable” and “frivolous” allegations. In the case of DGC, for instance, the NCLT had stated: “Frivolous and groundless filing of a case consumes time and clogs the infrastructure of adjudication. Productive resources and capital, which should be used in the handling of genuine cases, are dissipated in attending to such case filed only to prolong decided issue(s). This is a fit case where we are forced to impose cost on the Applicant.”

Key Questions

The questions central to the issue, “Whether Mahi Bhat and other professionals have systematically brokered illicit deals within the tribunal?,” “Whether the intervention of the Bar Council of India is necessary against legal practitioners accused of such corrupt practices?,” “Whether judicial intervention is required and the members should be investigated?”