NCLAT Member Recuses Himself After Being Approached by “Most Revered Member of Higher Judiciary”

NCLAT Member Recuses Himself After Being Approached by “Most Revered Member of Higher Judiciary”

Introduction

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, recorded that its Judicial Member Justice Sharad Kumar Sharma was approached by “one of the most revered members of the higher judiciary” seeking a favourable order in an insolvency matter. Expressing anguish over the attempt to influence adjudication, Justice Sharma recused himself from the proceedings.

Factual Background

The case arose from an appeal filed in 2023 against an order admitting a Hyderabad-based company into the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). The matter was listed before a two-member coram of Justice Sharad Kumar Sharma (Judicial) and Jatindranath Swain (Technical) and was posted for orders.

Procedural Background

On August 13, 2025, Justice Sharma disclosed in open court that he had been approached by a respected member of the higher judiciary seeking a favourable order. He even referred to a message received on his phone, shown to the lawyers present (though its contents were not disclosed). Following this, he formally recused himself, and the bench directed that the matter be placed before the NCLAT Chairperson for reallocation to another coram.

Contentions and Observations

• Justice Sharma’s Recusal: Justice Sharma noted: “I have 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.”
• Bench’s Response: The coram, also comprising Member (Technical) Jatindranath Swain, recorded its anguish at the attempt to influence adjudication and directed the Registry to place the matter before the Chairperson for nomination of another bench.

Issues

1. Whether the attempt to influence adjudication by a higher judiciary member undermines the integrity of the judicial process?

2. Whether recusal was the correct judicial response in ensuring impartiality and independence?

Reasoning and Analysis

The Tribunal emphasized that the judiciary must be free from external pressures. By recusing himself, Justice Sharma ensured that the matter would be adjudicated without bias or undue influence. The directive to reassign the case upholds both the fairness of proceedings and public confidence in the system.

Outcome

• Recusal: Justice Sharma formally stepped aside from the matter.
• Reallocation: The case will now be heard by a fresh bench, to be constituted by the NCLAT Chairperson.

Pattern of Recusals

This is not the first instance where Justice Sharma has faced attempts at external influence:

• June 11, 2025 – Recused himself in appeals involving Shri Ramalinga Mills, citing a respondent’s attempt to approach him for a favourable judgment.
• Nov 18, 2024 – Recused from Jeppiar Cements matter after disclosing that his own brother had approached him to “reserve” the case.
• Early 2024 – Recused from matters related to Byju’s CIRP, as he had earlier represented the BCCI, which had initiated the insolvency plea.

Implications

The case underscores the fragile balance between judicial independence and external influence. It highlights the responsibility of judges and tribunal members to recuse in such circumstances, thereby reinforcing institutional integrity.

Representation

In this case the appellant was represented by Mr. Mayan H. Jain, Advocate. Meanwhile the respondent was represented by Mr. R. Venkatavaradan and Mr. Chandramouli Prabhakar, Advocate for R2.