SC Orders Probe Into Alleged Attempt by ‘Higher Judiciary’ to Influence NCLAT Judge
In an unprecedented move, the Supreme Court on Tuesday ordered an inquiry into a startling disclosure made by Justice Sharad Kumar Sharma, Judicial Member of the National Company Law Appellate Tribunal (NCLAT) Chennai.
Justice Sharma revealed that he had been approached by “one of the most revered members of the higher judiciary of this country” to deliver a favourable order in an insolvency case.
The Apex Court directed its Secretary General to conduct the probe to ascertain the identity of the judge; whether from the Supreme Court or a High Court, who allegedly attempted to influence the outcome.
The revelation came through a judicial order passed by Justice Sharma, who recused himself from hearing the matter on August 13. “We are anguished to observe, that one of us, Member (Judicial), has been approached by one of the most revered members of the higher judiciary of this country for seeking an order in favour of a particular party. Hence, I recuse to hear the matter. Place before the hon’ble chairperson for nomination of an appropriate bench,” the order read.
The case involves insolvency proceedings against Hyderabad-based real estate firm KLSR Infratech Ltd, and was being heard by a two-member bench comprising Justice Sharma and Technical Member Jatindranath Swain. Although the bench had concluded hearings and reserved judgment on June 18, the matter was referred to the NCLAT Chairperson following Justice Sharma’s recusal.
The Supreme Court’s decision to step in underscores the gravity of the disclosure, which has sent ripples across the legal fraternity. An inquiry into such an allegation is rare and raises pressing concerns about judicial integrity and independence at the highest levels.
The case, Attluru Sreenivasulu Reddy, Suspended Director of M/s. KLSR Infratech Ltd. v. M/s. AS Met Corp Pvt. Ltd. & Anr., concerned an Appeal against the admission of Hyderabad-based KLSR Infratech Ltd. into the Corporate Insolvency Resolution Process (CIRP). The matter was before a two-member Bench comprising Justice Sharma and Technical Member Jatindranath Swain, which had reserved the matter for orders.
Following the disclosure, the Bench directed that the case be placed before the NCLAT Chairperson for reallocation to another bench.
This is not the first time Justice Sharma had stepped aside after attempts to influence his adjudication.
-June 11, 2024: While hearing disputes involving Shri Ramalinga Mills, he recused himself after recording that one of the respondents attempted to approach him for a favourable judgment.
-November 18, 2024: He withdrew from a matter concerning Jeppiar Cements, stating in his order: “Since I have been approached by my real brother who has dropped in the following messages...With a very sorry note, I refuse to hear this appeal.”
-Earlier in 2024: He also recused from hearing cases related to the insolvency of edtech firm Byju’s, citing prior professional association with the Board of Control for Cricket in India (BCCI), the petitioner in that matter.
The August 13 order has triggered serious concern across the legal fraternity, as references to “higher judiciary” encompass judges from the Supreme Court or High Courts. While Justice Sharma did not name anyone, the disclosure of attempted influence from such quarters is rare and raises troubling questions about judicial independence in insolvency proceedings.
With his latest recusal, the insolvency case involving KLSR Infratech Ltd. will now be placed before a fresh coram, prolonging proceedings that already had hearings concluded and orders reserved.