Supreme Court orders probe after NCLAT member alleges judge from higher judiciary attempted to influence him

The Supreme Court has ordered an inquiry into allegations that a judge of the higher judiciary contacted Justice Sharad Kumar Sharma of the National Company Law Appellate Tribunal (NCLAT) in Chennai to seek a favourable order in an insolvency matter.

The inquiry will be conducted by the Secretary General of the Supreme Court and will ascertain whether the call was indeed made by a High Court or Supreme Court judge, and if so, by whom.

Sources close to the development said that the top court will decide on further course of action based on the findings.

The direction follows an order passed on August 13 by Justice Sharad Kumar Sharma, Judicial Member of the NCLAT, who recused himself from hearing an insolvency appeal.

The appeal was filed by Attluru Sreenivasulu Reddy, suspended director of KLSR Infratech Ltd., against AS Met Corp Pvt. Ltd. and another respondent.

In that order, Justice Sharma recorded:

“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 bench, which also comprised Member (Technical) Jatindranath Swain, referred the matter to the NCLAT Chairperson for reallocation.

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.

Interestingly, Justice Sharma has in the past recused from matters citing similar concerns.

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, he 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.