The Supreme Court on Friday transferred a key commercial dispute from the National Company Law Appellate Tribunal (NCLAT) in Chennai to its Principal Bench in Delhi, following a explosive allegation from a sitting judicial member that he was approached by a retired High Court judge to “favour one of the parties.”
A Supreme Court bench comprising Justice Surya Kant and Justice Joymalya Bagchi intervened after the case stalled in Chennai. The bench has now requested the NCLAT President to list the appeal in Delhi and ensure it is decided “at the earliest” after notifying all parties.
The controversy centers on Justice Sharad Kumar Sharma, a judicial member of the NCLAT’s Chennai bench. In August, Justice Sharma disclosed in open court that one of the litigants had attempted to improperly influence him. He reportedly referred to a message received on his mobile phone and showed it to the lawyers present before recusing himself from the case on August 13.
The top court declared that the allegation of judicial interference was an issue of “vital public importance.” However, the bench opted to refer the matter for an internal inquiry rather than ordering a criminal investigation as one of the parties had sought. The court stated that Justice Sharma’s allegation “would be looked into on the administrative side” and treated the petition as a “representation” for the Chief Justice of India to consider.
“Let the law take its own course,” the Court said.
The underlying dispute is an appeal challenging a decision by the National Company Law Tribunal (NCLT) in Hyderabad. The NCLT had admitted KLSR Infratech Limited into the Corporate Insolvency Resolution Process (CIRP) based on a plea by its creditor, AS Met Corp Private Limited.
The appeal against this decision was heard by the NCLAT Chennai bench on June 18 and was reserved for final orders. However, due to Justice Sharma’s subsequent recusal, the decision could not be pronounced, leaving the case in limbo and prompting AS Met Corp to approach the Supreme Court.
This is not the first time Justice Sharma has recused himself citing external approaches or conflicts. In November 2024, he stepped away from a different case involving Jeppiar Cements, recording in an order that he had been approached by his “real brother” about the matter. Earlier in 2024, he also recused from hearings related to Byju’s insolvency, as he had previously represented the BCCI, a party to the case, in his capacity as a lawyer.
