Here is why Justice KV Viswanathan recused from a case after reserving judgment

In an rare move, Justice KV Viswanathan of the Supreme Court recently recused from hearing an insolvency appeal two weeks after reserving judgment in the case..On March 17, 2026, a Bench of Justices JB Pardiwala and Viswanathan had reserved judgment in an appeal arising from insolvency proceedings against Dugal Projects Development Company, a corporate guarantor. The order was later recalled after Justice Viswanathan recused and the case was directed to be listed before another Bench. The order said, "After the judgment came to be reserved, it has come to the notice of Hon’ble K.V.Viswanathan, J. is that His Lordship had appeared as a counsel for the appellant herein in the Corporate Insolvency Resolution Process (CIRP) against the Principal borrower (corporate debtor).".The recusal, first brought to light by journalist V Venkatesan, traces back to Justice Viswanathan’s earlier appearance as a Senior Advocate for Alchemist Asset Reconstruction Company (AARC) in proceedings concerning Sima Hotels and Resorts, the principal borrower.In those proceedings, the appellate tribunal had held that AARC’s insolvency application against Sima Hotels was barred by limitation, a finding that was later affirmed by the Supreme Court in 2020. .The present case arises from parallel proceedings on the same debt. On May 8, 2019, the National Company Law Tribunal passed two orders: it rejected the insolvency plea against Sima Hotels as time-barred, but admitted the same claim against Dugal Projects, which had guaranteed the loan.This divergence led to appeals before the National Company Law Appellate Tribunal (NCLAT), which dismissed the creditor’s case against the principal borrower as time-barred, holding that the default dated back decades and the insolvency application filed in 2018 was beyond limitation. This finding was later upheld by the Supreme Court. Crucially, Justice Viswanathan appeared in this case for AARC. In the separate appeal concerning the guarantor, the NCLAT set aside the admission of insolvency proceedings against Dugal Projects, holding that the Section 7 application was also barred by limitation. It found that the default dated back to 1989 and the recovery certificate was issued in 2011, making the 2018 insolvency plea time-barred. This is the case Justice Viswanathan recused from on April 1. .The central issue before the Supreme Court is whether a creditor can initiate insolvency proceedings against a corporate guarantor when its claim against the principal borrower has already been held to be time-barred.This is where the conflict arose..Justice Viswanathan had earlier appeared for AARC in the borrower-side dispute, defending its attempt to initiate insolvency proceedings based on the same debt. As a judge, he would now be deciding whether that very debt could still be enforced against the guarantor.Although the parties are different - borrower and guarantor - the law treats a guarantor’s liability as co-extensive with that of the borrower, meaning that both arise from the same underlying obligation.As a result, the dispute before the Court involved:the same creditorthe same loan and defaulta closely linked limitation issue that had already been litigated earlier.Given this overlap, Justice Viswanathan’s prior role as counsel prompted him to recuse, even though the present case involved a different entity.Notably, the recusal came after judgment had already been reserved, an uncommon situation that required the earlier reservation to be set aside and the matter to be heard afresh.The case will now be listed before a different Bench of the Supreme Court..[Read NCLAT order].[Read 2020 order].[Read 2026 recusal order]