The Supreme Court transferred the NCLAT appeal to New Delhi after a Chennai Bench member revealed he was “approached” for a favourable order. The Court noted the CJI “must have acted” on the serious allegation and treated the petition as a representation.
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NEW DELHI: The Supreme Court of India turned its attention toward Chief Justice of India B.R. Gavai after a judicial member of the National Company Law Appellate Tribunal (NCLAT) Chennai Bench alleged that a “revered member of the higher judiciary” had approached him to influence a high-stakes corporate insolvency appeal.
A Bench of Justices Surya Kant and Joymalya Bagchi described the matter as one of “vital public importance”, stressing that the “law must take its course.”
Background
On August 13, 2025, NCLAT judicial member Justice Sharad Kumar Sharma, a retired Uttarakhand High Court judge, recused himself from hearing an appeal filed by A.S. Reddy, suspended director of Hyderabad-based KLSR Infratech, which is currently facing insolvency proceedings under the Insolvency and Bankruptcy Code (IBC).
Justice Sharma stated in open court that he had “preserved” all WhatsApp messages allegedly sent by the influential judicial figure. These messages, according to the Supreme Court’s observations and submissions made by counsel, were sent from the phone number of a Chief Justice of a High Court.
Allegations Raised Before the Supreme Court
Representing M/s AS Met Corp Pvt. Ltd, the operational creditor in the underlying NCLAT matter, advocates Prashant Bhushan and Cheryl D’souza, alleged that:
- The WhatsApp messages were clearly intended to influence the outcome of the case.
- The sender appeared to be the Chief Justice of a High Court.
- Justice Sharma recused himself because the outreach compromised judicial impartiality.
The petitioner urged the Supreme Court to:
- Direct registration of an FIR.
- Order a court-monitored investigation.
- Secure preservation of all digital evidence.
- Obtain audio/video recordings of the August 13 proceedings.
Supreme Court’s Observations
Justice Surya Kant, set to assume office as Chief Justice of India after the November 24 retirement of Justice Gavai, remarked:
“We believe the competent authority [Chief Justice of India] must have examined the available material and taken necessary steps… All these issues will be effectively dealt with by the Chief Justice of India on the administrative side.”
The Bench treated the operational creditor’s petition as a representation that placed critical information before the Chief Justice of India for appropriate action.
To ensure impartiality and expedite resolution, the Supreme Court ordered:
- Transfer of the appeal from the Chennai Bench to the NCLAT Principal Bench, New Delhi.
- Listing of the matter before NCLAT President Justice Ashok Bhushan, a former Supreme Court judge.
What Petitioner Seeks
M/s AS Met Corp Pvt. Ltd. clarified that the original August 13 order was vague and did not specify on whose behalf the judicial outreach occurred. The company stressed that it wanted no cloud of suspicion hanging over its role in the case.
Mr. Bhushan noted that the Chief Justice has two options:
- In-house inquiry, or
- Allow registration of an FIR.
The Supreme Court declined to comment on which path would be appropriate.
Earlier, the Supreme Court transferred a company appeal from the NCLAT Chennai Bench to the Principal Bench in New Delhi after judicial member Justice Sharad Kumar Sharma recused himself, stating that he had been approached, through a message allegedly sent via a retired High Court judge, by “one of the most revered members of the higher judiciary” seeking a favourable order.
A Bench of Justices Surya Kant and Joymalya Bagchi said the immediate priority was to ensure fair adjudication of the appeal, which had been reserved for orders on June 18 but stalled due to the recusal on August 13. The case stems from CIRP proceedings against KLSR Infratech Ltd, initiated by AS Met Corp Pvt Ltd.
While transferring the matter, the Court directed the NCLAT President to list and decide the appeal expeditiously and instructed respondents 4 and 5 not to obstruct its early disposal. The Bench noted that the allegations of attempted interference raise issues of “vital public importance,” and said these broader concerns will be examined by the Chief Justice of India on the administrative side.
Treating the writ petition as a representation, the Court concluded that “the law must take its own course.”
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