SC Orders Probe After NCLAT Judicial Member Claims ‘Approached For Favour’

The Supreme Court has stepped in to investigate a serious allegation made by a judicial member of the National Company Law Appellate Tribunal (NCLAT), who claimed that a senior figure from the higher judiciary sought to influence him in a pending case.

Sources confirmed that the Secretary General of the Supreme Court has been tasked with conducting the inquiry. The top court will decide its next steps based on the report’s findings.

The allegation was raised by Justice Sharad Kumar Sharma, Judicial Member of NCLAT’s Chennai bench, who recorded the incident in an order dated August 13 before recusing himself.

“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 (sic),” the order stated.

Following his withdrawal, the tribunal directed that the matter be reassigned by its chairperson to another bench.

The appeal before Justice Sharma and Technical Member Jatindranath Swain was filed by A S Reddy, suspended director of KLSR Infratech, a Hyderabad-based real estate company.

The Hyderabad bench of the NCLT had initiated Corporate Insolvency Resolution Process (CIRP) against the firm on July 14, 2023, after a plea by its creditor AS Met Corp Pvt Ltd.

The tribunal had suspended the board and appointed an interim resolution professional.

Reddy later approached NCLAT challenging this order.

Hearings concluded on June 18, with judgment reserved after both sides were given a week to file written submissions. The order was listed for pronouncement on August 13, but Justice Sharma stepped aside citing the alleged approach from a higher judicial authority.

Justice Sharma’s Track Record

Justice Sharma retired as a judge of the Uttarakhand High Court in December 2023 and joined NCLAT in February 2024. Since then, he has recused from several sensitive cases.

He opted out of hearing the Byju’s insolvency proceedings due to his past role as a lawyer for the Board of Control for Cricket in India (BCCI).

He has also stepped aside from matters related to Jeppiaar Cements and Ramalinga Mills.

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