On August 13, 2025, Justice Sharma issued a two-paragraph order stating that he had been approached by "one of the most revered members of the higher judiciary of this country" seeking a favourable order for a particular party. The order expressed the tribunal's "anguish" over the incident and noted that the matter would be referred to the NCLAT chairperson for the constitution of a new bench.
The case pertains to insolvency proceedings initiated against KLSR Infratech Ltd by its creditor, AS Met Corp Pvt Ltd, under the Insolvency and Bankruptcy Code. The creditor alleged that the company had defaulted on payments amounting to ₹2.88 crore. KLSR Infratech contested the claim, arguing that it was a profit-making entity with a turnover exceeding ₹300 crore over the past five years and thus not insolvent. The company also pointed to a pending FIR against the creditor's directors as evidence of a pre-existing dispute, which it contended should bar the initiation of insolvency proceedings.
Justice Sharma's recusal is not an isolated incident. He has previously stepped aside from cases involving Byju's, Jeppiaar Cements, and Ramalinga Mills, citing potential conflicts of interest due to his prior legal associations. This pattern has drawn attention to the challenges faced by members of the judiciary in maintaining impartiality amidst external pressures.
The Supreme Court of India has taken cognizance of the matter and ordered an investigation into the allegations. The court's intervention underscores the gravity of the situation and its commitment to upholding the sanctity of the judicial process.
The incident has also sparked political controversy in Telangana, where KLSR Infratech Ltd is based. Allegations have surfaced suggesting that the company has associations with a senior Congress leader in the state, raising questions about potential political interference in the case.
Legal experts have expressed concern over the implications of such attempts to influence judicial decisions. They warn that such actions, if left unchecked, could erode public confidence in the judicial system and undermine the rule of law.