SC Probes Massive Fraud & Judicial Meddling Allegations
The petition sought a CBI and SFIO investigation into the alleged collusion between state authorities, the suspended management of KLSR Infratech, and the alleged judicial interference: Reports
NEW DELHI: The Supreme Court on Friday sought responses from the Centre and the Telangana government, besides the CBI, the ED and the Serious Fraud Investigation Office (SFIO), on a plea seeking an independent investigation into an alleged multi-crore corporate fraud involving suspected collusion by state authorities and a senior member of the judiciary.
A two-judge bench of the apex court comprising Justice Surya Kant and Justice Joymalya Bagchi took note of submissions made by advocate Ashwini Upadhyay and issued notices to several Union ministries, including home, finance, law and justice, and corporate affairs.
The petition, filed by Saurabh Agarwal, director of Bengal Cold Rollers Pvt. Ltd, alleged that a sophisticated scheme was in place in which the suspended management of an insolvent company siphoned off nearly ₹150 crore and used high-level “judicial influence” to stall insolvency proceedings for more than 30 months.
The petitioner alleged that when he and another creditor refused to withdraw their claims, the suspended management, using its “proximity to power” in Telangana, launched retaliatory action. This allegedly included “malicious” GST proceedings, illegal searches, and the arrest of a family member using what were described as “fabricated documents” on plain paper. These actions, the plea claimed, amounted to “arm-twisting tactics” intended to force a settlement.
The petition sought a CBI and SFIO investigation into the alleged collusion between state authorities, the suspended management of KLSR Infratech, and the alleged judicial interference. It also sought an ED probe into alleged money laundering by the suspended directors.
The case pertains to KLSR Infratech Ltd, which was admitted into the corporate insolvency resolution process (CIRP) in July 2023. Despite a statutory moratorium and suspension of the company’s board, the plea alleged, the suspended directors manipulated the ministry of corporate affairs (MCA) records to show the company as “active” instead of “under CIRP”.
By doing so, the directors allegedly raised fresh loans amounting to ₹148.87 crore from various banks by mortgaging company assets. The plea claimed that the company secured government tenders worth about ₹6,000 crore during the insolvency period without authorisation from the interim resolution professional (IRP).
The plea referred to proceedings before the National Company Law Appellate Tribunal (NCLAT), Chennai, and claimed that NCLAT member Justice Sharad Kumar Sharma recused himself in open court after disclosing that he had allegedly been approached by a Chief Justice of a High Court seeking a “favourable order” for the suspended directors of the corporate debtor, KLSR Infratech Ltd.
According to the petition, Justice Sharma went to the extent of showing his mobile phone in open court, containing call logs and messages purportedly from the senior judicial functionary, to counsel.
Additionally, the plea sought directions to the NCLAT registrar to release video recordings and transcripts of the August 13, 2025, proceedings in which the alleged judicial influence was disclosed, and to the MCA to immediately correct the company’s status to “under CIRP” to prevent further asset stripping.
