Supreme Court Refers NCLAT Judge's Judicial Influence Claim to CJI for Administrative Action

New Delhi – The Supreme Court of India has opted to address a matter of profound judicial significance on its administrative side, after a judicial member of the National Company Law Appellate Tribunal (NCLAT) made an explosive in-court disclosure about being approached by a senior judge to influence a pending insolvency appeal. The Court transferred the underlying case and directed that the writ petition seeking a criminal probe be treated as a representation to the Chief Justice of India, placing the sensitive issue of judicial accountability squarely in the hands of the judiciary's top administrative authority.

A bench comprising Justice Surya Kant and Justice Joymalya Bagchi, while acknowledging the gravity of the allegations, disposed of a writ petition filed by M/s A.S. Met Corp Pvt Ltd. The petition sought a court-monitored investigation into the claims made by NCLAT Judicial Member, Justice Sharad Kumar Sharma.

"As regards the other issues, all such issues are of vital importance," the bench observed. "We believe that the competent authority must have examined the matter and taken necessary steps. All these issues can be effectively dealt with on the administrative side."

This decision effectively transforms the plea for a criminal investigation into an internal matter for the judiciary, a move that will be closely scrutinized by the legal community for its implications on transparency and accountability.

The Unprecedented Disclosure at the NCLAT

The controversy erupted during a hearing on August 13, 2025, before the Chennai Bench of the NCLAT in a matter concerning the insolvency of KLSR Infratech Ltd. Justice Sharad Kumar Sharma, presiding over the case, made a startling revelation in open court. He stated that he had received messages on his mobile phone from what he described as “one of the most revered members of the higher judiciary,” pressing him to deliver a favourable order for one of the parties.

According to the petitioner, Justice Sharma showed the messages to counsel present in the courtroom before promptly recusing himself from the case. While the judge’s subsequent written order recorded the approach, it omitted details regarding which party the alleged influence was intended to benefit, an ambiguity the petitioner flagged as a significant concern. The recusal left the insolvency appeal, which had been reserved for final orders, in a state of indefinite suspension, compelling the petitioner, A.S. Met Corp, to approach the Supreme Court.

Arguments Before the Supreme Court: Criminal Probe vs. Internal Inquiry

Appearing for the petitioner, Advocate Prashant Bhushan pushed for an independent, court-monitored criminal investigation. He submitted that an elaborate probe might not even be necessary, as Justice Sharma had reportedly preserved the crucial electronic evidence. "According to our information, the message came from the Chief Justice of a High Court," Bhushan asserted, highlighting the seniority of the judge allegedly involved.

The writ petition, filed under Article 32 of the Constitution, argued for the registration of an FIR under relevant provisions of the Prevention of Corruption Act and the Bharatiya Nyaya Sanhita. Citing the landmark Supreme Court rulings in Lalita Kumari v. Govt. of U.P. and K. Veeraswami v. Union of India , the petitioner contended that an internal "in-house" inquiry is an inadequate substitute for a formal criminal investigation when allegations of judicial corruption arise.

The petitioner, A.S. Met Corp, explained its inability to follow the established procedure of seeking sanction from the CJI for an investigation against a judge, as the identity of the senior judicial figure remains unknown to them. The plea sought specific directions for: 1. Registration of an FIR. 2. Preservation and production of electronic records from the NCLAT proceedings, including audio and video recordings, which the Registrar had allegedly refused to provide. 3. A court-monitored investigation led by a retired Supreme Court judge. 4. Protective orders to ensure the neutral management of the corporate debtor, KLSR Infratech, pending the outcome of the probe.

The petition also referenced media reports suggesting that an internal inquiry had already been initiated by the Supreme Court's Secretary General, but criticized the process for its lack of transparency and public disclosure.

The Supreme Court's Two-Pronged Approach

The bench of Justice Kant and Justice Bagchi adopted a bifurcated approach to the complex issues presented.

1. Transfer of the Substantive Appeal: Recognizing that the recusal had stalled the insolvency proceedings, the Court ordered the immediate transfer of the appeal from the NCLAT’s Chennai Bench to its Principal Bench in New Delhi. The Court requested the NCLAT President to list the matter for an early decision, ensuring the commercial dispute at the heart of the matter is not further delayed by the controversy.

2. Handling the Allegation of Interference: On the more delicate issue of judicial interference, the Court refrained from ordering a criminal probe. By directing the writ petition to be treated as a representation to the CJI, the bench has channeled the grievance into the judiciary's internal mechanism for addressing misconduct. This "administrative side" handling means the CJI will likely examine the material and decide on the appropriate course of action, which could range from an informal inquiry to the constitution of an in-house committee.

This route avoids the immediate registration of an FIR against an unnamed senior judge but raises critical questions about the transparency and ultimate outcome of the process.

Legal and Institutional Implications

The Supreme Court's decision navigates a treacherous legal landscape, balancing the need to protect judicial independence from unsubstantiated attacks with the imperative of upholding the institution's integrity.

• The K. Veeraswami Precedent: The 1991 judgment in K. Veeraswami established that no criminal case can be registered against a sitting judge of a High Court or the Supreme Court without the prior written consent of the Chief Justice of India. The petitioner's inability to name the judge created a procedural roadblock, which the Court has now bypassed by referring the entire matter to the CJI.
• Administrative vs. Judicial Side: The distinction is crucial. A decision on the judicial side would create a binding precedent, whereas an administrative decision by the CJI is an internal matter. While effective, this process is often opaque, and its findings are not always made public. This has led to calls from legal scholars and activists for greater transparency in judicial accountability mechanisms.
• A Pattern of Recusals?: The source material notes that this is not the first instance of Justice Sharma recusing himself due to external approaches. He had previously stepped away from other cases citing approaches from his own brother and a conflict of interest. This pattern, now culminating in a matter before the Supreme Court, underscores the immense pressures faced by members of tribunals and the judiciary at large.

The legal community will now await the decision of the Chief Justice of India. The handling of this unprecedented allegation will serve as a powerful statement on the Indian judiciary's commitment to self-regulation and its ability to maintain public confidence in the face of serious internal challenges.