A shocking allegation by an NCLAT judicial member, claiming he was approached through a “higher judiciary” figure, prompted the Supreme Court to transfer the case to Delhi. The Court said all related issues will be examined by the CJI administratively.
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NEW DELHI: The Supreme Court on Friday ordered the transfer of a company appeal from the NCLAT Chennai Bench to the Principal Bench of NCLAT in New Delhi, after a judicial member of the Chennai Bench recused himself stating that he had been approached by “one of the most revered members of the higher judiciary” seeking a favourable order for a party to the case.
The transfer follows serious allegations by Justice Sharad Kumar Sharma, a judicial member of the Chennai Bench, who stated in open court that he was approached, through a message sent via a retired High Court judge, to deliver a favourable order for one of the litigating parties.
A Bench of Justice Surya Kant and Justice Joymalya Bagchi passed the order while hearing a writ petition highlighting the alleged attempt to interfere in the judicial process. He also emphasised that the broader issues raised, touching upon judicial propriety and attempted influence, would be examined on the administrative side by the Chief Justice of India (CJI).
The Court said that the “foremost issue” was ensuring fair adjudication of the underlying company appeal, which had already been heard by the NCLAT Chennai Bench but could not be decided because of the recusal.
The matter, which arises from the Corporate Insolvency Resolution Process (CIRP) initiated against KLSR Infratech Ltd on a plea by AS Met Corp Pvt Ltd, had been heard and reserved for orders on June 18. However, Justice Sharma’s recusal on August 13 stalled the pronouncement.
The Court added that although notice had not been issued to respondents numbers 4 and 5, the transfer would not cause prejudice to them.
Taking note of the “peculiar facts of the case,” the Supreme Court ordered:
- The company appeal pending before NCLAT Chennai is transferred along with all records to the Principal Bench, NCLAT New Delhi.
- The Court requested the President, NCLAT, to list the appeal before his Bench and decide it “at the earliest” after issuing notice to the contesting parties.
- Respondent numbers 4 and 5 have been directed to ensure that no impediment is caused in the expeditious disposal of the appeal.
The Bench observed that the allegations regarding the attempted influence raise issues of “vital public importance.” It noted that the competent authority must have examined the material already available and taken necessary steps.
The Supreme Court said that these wider concerns can be addressed by the Chief Justice of India on the administrative side.
The writ petition has been kept as a representation bringing the information on record for consideration by the CJI. The Court concluded:
“We deem it appropriate to treat this writ petition as a representation bringing on record vital information for consideration by the CJI. Let the law take its own course,”
the Court stated.
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Previous Recusals by Justice Sharma
This is not the first time Justice Sharad Kumar Sharma has recused from high-stakes insolvency matters:
▪ 2024 Byju’s CIRP proceedings
He withdrew after noting that he had earlier appeared as counsel for the BCCI, the applicant in that case.
▪ November 2024 – Jeppiar Cements matter
Justice Sharma recused after placing on record that he had been approached by his real brother with a request relating to the case.
The latest incident, involving an alleged attempt by a former High Court judge to influence adjudication, is the most serious yet and has prompted scrutiny at the highest levels of the judiciary.
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