Supreme Court Orders Probe into NCLAT Bribery Claim
SC launches inquiry into NCLAT judge's shocking favoritism allegation.
The Supreme Court has ordered a high-level inquiry into allegations made by a judicial member of the National Company Law Appellate Tribunal (NCLAT). Justice Sharad Kumar Sharma, a judicial member of the Chennai-based NCLAT, has claimed that he was approached by a highly respected member of the higher judiciary to issue a favorable ruling in a case pending before him. This explosive revelation has raised serious questions about the integrity of judicial processes in India and prompted immediate action from the apex court.
According to sources familiar with the matter, the Supreme Court has tasked its secretary general with conducting a thorough investigation into Justice Sharma’s allegations. The outcome of this probe will determine the next steps, which could have far-reaching implications for the judiciary. The allegations, if proven true, could undermine public trust in the impartiality of the courts and spark a broader debate about accountability within the higher echelons of India’s legal system.
The incident came to light when Justice Sharma, a former Uttarakhand High Court judge who joined the NCLAT on February 19, 2024, recused himself from a case involving Hyderabad-based KLSR Infratech, a company undergoing the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code. The case, which was being heard by a two-member NCLAT bench comprising Justice Sharma and Technical Member Jatindranath Swain, involved an appeal filed by A S Reddy, the suspended director of KLSR Infratech. The appeal challenged an order by the Hyderabad bench of the National Company Law Tribunal (NCLT), which had initiated CIRP against the realty firm on July 14, 2023, following a plea by its creditor, AS Met Corp Pvt Ltd.
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The NCLAT bench had reserved its judgment on June 18, 2025, after hearing arguments from both parties and granting them seven days to submit written submissions. However, when the case was listed for orders on August 13, 2025, Justice Sharma stunned the courtroom by announcing his recusal. In a brief but damning two-paragraph order, he disclosed that he had been approached by a revered member of the higher judiciary to sway the decision in favor of a particular party. “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 order stated. The tribunal then referred the matter to the NCLAT chairperson to assign a new bench for hearing.
Justice Sharma’s decision to publicly disclose the alleged attempt to influence him has sparked widespread concern. Legal experts have described the situation as unprecedented, noting that such claims are rare and could indicate deeper systemic issues. The Supreme Court’s swift response in ordering an inquiry underscores the gravity of the situation and its commitment to upholding judicial integrity.
This is not the first time Justice Sharma has recused himself from cases at the NCLAT. Since joining the tribunal, he has stepped aside from matters involving ed-tech firm Byju’s, due to his prior role as a lawyer for the Board of Control for Cricket in India, as well as cases related to Jeppiaar Cements and Ramalinga Mills. His consistent recusals reflect a cautious approach to avoiding conflicts of interest, but this latest incident has brought his tenure under intense scrutiny.
The case at the heart of the controversy involves KLSR Infratech, a realty firm facing financial distress. The NCLT’s Hyderabad bench had appointed an interim resolution professional and suspended the company’s board after initiating CIRP in July 2023. A S Reddy, the suspended director, challenged this order before the NCLAT, leading to the hearings that culminated in Justice Sharma’s dramatic recusal.
As the Supreme Court’s inquiry unfolds, the legal community and the public await answers. The allegations, if substantiated, could lead to significant reforms in how judicial appointments and oversight are handled in India. For now, the focus remains on the investigation, which is expected to shed light on the veracity of Justice Sharma’s claims and the broader implications for the judiciary.
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