The National Company Law Appellate Tribunal (NCLAT) at Chennai has recorded that it was approached by “one of the most revered members of the higher judiciary” seeking a favourable order for a party in an insolvency matter [Attluru Sreenivasulu Reddy Suspended Director of M/s. KLSR Infratech Ltd Vs M/s. AS Met Corp Pvt. Ltd. & Anr.].

NCLAT judicial member Justice Sharad Kumar Sharma recused himself from hearing the case on August 13 after disclosing that he was contacted for a favourable order.

The bench, also comprising Member (Technical) Jatindranath Swain, expressed its anguish over the same and directed that the matter be placed before the NCLAT chairperson for nomination of another bench to hear the case.

“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," the NCLAT order of August 13 said.

Sources told Bar & Bench that on August 13, Justice Sharma referred to a message he had received on his mobile phone and showed it to the lawyers involved in the case before stepping away from the case. The contents of the message were not disclosed in court and remain unknown.

The proceedings concern an appeal filed in 2023 challenging an order admitting a Hyderabad-based company into the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC).

The appeal was listed before a two-member coram at the NCLAT Chennai and was listed for orders. However, with Justice Sharma's recusal, the matter is now expected to be placed before the chairperson for constitution of a fresh coram to hear the case.

This is not the first time Justice Sharma has recused himself citing attempts to influence adjudication.

On June 11, while hearing a batch of appeals arising out of disputes involving Shri Ramalinga Mills and related companies, Justice Sharma noted that one of the respondents had attempted to approach him for a favourable judgment. In that case too, he recused himself and directed that the matters be placed before the chairperson for re-allocation.

In November 2024, the same member had recused from a different matter involving Jeppiar Cements after recording in an order that he had been approached by his brother with a request to reserve the case for orders.

The order dated November 18, 2024, stated:

“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. Let the matter be placed before the Hon’ble Chairperson for the nomination of another bench.”

That case was being heard by Justice Sharma and Technical Member Jatindranath Swain. It arose from a plea by Jeppiar Cements’ former director to set aside the CIRP initiated against the company on the ground that all dues to financial creditors had been settled. The matter had been pending before the Chennai Bench since October 2022.

Earlier in 2024, Justice Sharma recused from hearing matters pertaining to the CIRP of Byju's as it was initiated on a plea filed by Board of Control for Cricket in India (BCCI), for whom he had previously appeared as a lawyer in many cases.

[Read Order]