NCLT relied on "hallucinated citations" in its judgment: Suspended Essel director tells Supreme Court

A suspended director of Essel Infraprojects told the Supreme Court on Tuesday that the National Company Law Tribunal (NCLT) at Mumbai relied on "hallucinated" non-existent Supreme Court judgments/ citations in its order admitting Essel Infraprojects corporate insolvency resolution process (CIRP) [Pooja Ramesh Singh Vs Jammu & Kashmir Bank].

Senior Advocate Madhavi Divan, appearing for suspended director Pooja Ramesh Singh, told a Bench of Justices PS Narasimha and Alok Aradhe that the NCLT had relied on several judgments whose names and extracted portions were allegedly not genuine.

After hearing the argument, the Court observed that the issue strikes the core of the integrity of the proceedings itself.

Therefore, it directed the petitioner to file an affidavit highlighting the hallucinated citations.

The case arose from an appeal against a September 11, 2025 judgment of the National Company Law Appellate Tribunal (NCLAT). The NCLAT in that judgment upheld the NCLT’s August 28, 2024 order admitting Essel Infraprojects to CIRP on a Section 7 plea filed by Jammu and Kashmir Bank Limited.

The NCLT had admitted the insolvency plea for a claimed debt of ₹87.43 crore against the company.

The debt arose from a ₹200 crore facility granted by Jammu and Kashmir Bank to Pan India Utilities Distribution Company Limited.

The facility was secured by a corporate guarantee from Essel Infraprojects and a mortgage over land at Gorai, Borivali in Mumbai.

Essel Infraprojects had argued before the NCLT that its liabilities had been transferred to other group entities through a demerger and later amalgamation approved by the Bombay High Court in 2014.

It said the Gorai land and related project were transferred first to Essel Urban Infraprojects Limited and then to Pan India Infraprojects Private Limited.

A Bench of NCLT comprising Judicial Member Rita Kohli and Technical Member Madhu Sinha rejected this argument. It held that the corporate guarantee continued to bind Essel Infraprojects.

However, while arriving at that conclusion, the NCLT cited several Supreme Court judgments:

These included:

1) State Bank of India v. M/s Shree Ram Urban Infrastructure Ltd., cited as 2020 SCC OnLine SC 341;

2) Everest Kento Cylinders Ltd. v. Union of India, cited as (2015) 2 SCC 1;

3) ICICI Bank Ltd. v. Urban Infrastructure Real Estate Ltd., cited as (2019) 16 SCC 528;

4) V.S. Dempo & Co. Ltd. v. Reliance Communications Ltd., cited as (2021) 10 SCC 176;

5) Canara Bank v. N.G. Subbaraya Setty, cited as (2018) 16 SCC 228; and

6) Sarbjit Singh v. Union Bank of India, cited as (2022) 7 SCC 464.

The NCLAT did not rely on these citations. Instead, it only recorded that the NCLT had referred to them. It then rejected Essel's appeal.

In September 2025, the Supreme Court granted a status quo order on the CIRP.

Madhavi Divan appeared before the top court on Monday and said that barring two citations, the remaining judgments referred to in the NCLT order could not be verified. Therefore, she sought permission to file an affidavit placing the discrepancies on record.

The Court allowed this request after observing that the matter pertained to the integrity of the proceedings. However, it also clarified that it would consider the case on merits as well.

The case is now expected to come up for hearing on May 12.

Madhavi Divan was assisted by advocate Vishesh Kalra.

J&K Bank was represented by advocate Sumesh Dhawan.