The Supreme Court on Friday sought responses from the Centre, the Telangana government, and central investigative agencies on a plea seeking an independent probe into an alleged multi-crore corporate fraud, involving claims of collusion by state authorities and alleged judicial interference.
A bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi issued notices to several Union ministries, including Home Affairs, Finance, Law and Justice, and Corporate Affairs, after hearing submissions in the matter.
Notices were also issued to central probe agencies, the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), and the Serious Fraud Investigation Office (SFIO).
Allegations Linked to Insolvency Proceedings
The plea has been filed by Saurabh Agarwal, director of Bengal Cold Rollers Pvt Ltd, who alleged that the suspended management of an insolvent company siphoned off nearly ₹150 crore and used high-level influence to stall insolvency proceedings for over 30 months.
According to the petition, the alleged scheme relates to KLSR Infratech Limited, which was admitted into the Corporate Insolvency Resolution Process (CIRP) in July 2023.
Despite the statutory moratorium and suspension of the board, the plea claimed that the suspended directors allegedly manipulated Ministry of Corporate Affairs (MCA) records to show the company’s status as “active” instead of “under CIRP”. This, the petition alleged, enabled the raising of fresh loans amounting to ₹148.87 crore by mortgaging company assets.
Claims of Judicial Influence at NCLAT
The petition also referred to proceedings before the National Company Law Appellate Tribunal (NCLAT), Chennai.
It alleged that an NCLAT member, Justice Sharad Kumar Sharma, recused himself in open court after disclosing that he had allegedly been approached by a sitting Chief Justice of a High Court seeking a favourable order for the suspended directors of KLSR Infratech.
According to the plea, Justice Sharma reportedly displayed call logs and messages on his mobile phone to counsel in open court, allegedly evidencing the approach by a senior member of the judiciary.
Alleged Financial and Administrative Irregularities
The petition further claimed that during the insolvency period, KLSR Infratech allegedly secured government tenders worth around ₹6,000 crore without authorisation from the Interim Resolution Professional (IRP).
It also alleged that when the petitioner and another creditor refused to withdraw their claims, the suspended management used its alleged proximity to power in Telangana to exert pressure.
The plea accused state tax authorities of initiating “malicious” GST proceedings, conducting illegal searches, and arresting a family member of the petitioner using allegedly fabricated documents, actions described as coercive tactics to force a settlement.
Reliefs Sought by the Petitioner
Filed through advocate Ashwani Kumar Dubey, the plea seeks:
- A CBI and SFIO investigation into alleged collusion between state authorities, company management, and alleged judicial interference
- An ED probe into alleged money laundering by the suspended directors
- Directions to the NCLAT Registrar to release video recordings and transcripts of the August 13, 2025 proceedings
- A direction to the MCA to immediately correct the company’s status to “under CIRP” to prevent further asset stripping
The Supreme Court has sought detailed responses from all concerned authorities on the allegations raised.
Source: TaxTMI