Influence Attempt by Senior Judge Leads to Recusal of NCLAT Member

Influence Attempt by Senior Judge Leads to Recusal of NCLAT Member

Introduction

The National Company Law Appellate Tribunal (NCLAT), Chennai, faced an extraordinary situation in an insolvency appeal involving KLSR Infratech Ltd. when Justice Sharad Kumar Sharma recused himself after disclosing that he was approached by a highly respected member of the higher judiciary seeking a favourable order for one of the parties.

Factual Background

The case arose from an appeal filed by Attluru Sreenivasulu Reddy, suspended director of KLSR Infratech Ltd., against a July 2023 order admitting the Hyderabad-based company into Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code (IBC).

The order had earlier been stayed by another NCLAT bench in July 2023, and the matter came up before Justice Sharma for final orders.

Procedural Background

On 13 August 2025, Justice Sharma disclosed that he had received a message from a senior judicial figure requesting a favourable order.

The disclosure was made in open court; the message was shown to the lawyers present, though its contents were not recorded.

The bench, also comprising Technical Member Jatindranath Swain, expressed deep anguish and directed that the case be sent to the Chairperson for reallocation.

Contentions and Observations

Attempt to Influence: The tribunal noted that the attempt to influence judicial work by a “highly revered” member of the judiciary was deeply disturbing.

Recusal: Justice Sharma stated that his conscience did not permit him to continue hearing the matter in such circumstances.

Reasons for Recusal

1. Preservation of Judicial Integrity: To ensure impartiality and public confidence in the judicial process.

2. Past Precedents of Recusal:

o June 2024: Recused in Shri Ramalinga Mills dispute after a party attempted to approach him.

o Nov 2024: Withdrew from Jeppiar Cements appeal after disclosing a request from his own brother for favourable orders.

o Earlier recused in Byju’s CIRP proceedings, citing conflict of interest due to his prior role as counsel for BCCI.

Implications

• The episode underscores the fragility of judicial independence in the face of external pressures.
• It also highlights the need for institutional safeguards to insulate members of tribunals and courts from improper influence.
• Justice Sharma’s consistent stance reinforces the principle that recusal is sometimes necessary to preserve fairness and public confidence in the justice delivery system.