New Delhi: The Supreme Court seeks response from the Centre and others on plea alleging multi-crore corporate fraud involving judiciary, marking a rare and serious legal intervention into claims of high-level collusion.
The top court asked key government ministries and central investigative agencies to reply to a petition that alleges a sophisticated fraud scheme involving misuse of insolvency proceedings and alleged judicial influence to stall justice.
The move underscores growing judicial scrutiny over alleged corporate—judicial linkages and integrity in high-value financial disputes.
Details of the Supreme Court Corporate Fraud Plea
On January 23, 2026, a bench of the Supreme Court led by Chief Justice Surya Kant and Justice Joymalya Bagchi issued notices to the Union of India (Centre), the Telangana government, and central probe agencies — including the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), and the Serious Fraud Investigation Office (SFIO).
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The court directed these authorities to file their responses on a petition seeking an independent investigation into a major corporate fraud case.
The intent of these notices is to generate official replies and clarify the stand of each authority before the court proceeds further with the matter.
Background of the Supreme Court Corporate Fraud Plea
The petition was filed by Saurabh Agarwal, a director of Bengal Cold Rollers Pvt Ltd. It alleges that the suspended management of M/s KLSR Infratech Limited — a company under the Corporate Insolvency Resolution Process (CIRP) — siphoned off nearly Rs 150 crore.
According to the plea:
- The suspended directors continued to operate the company despite a statutory moratorium.
- They allegedly manipulated the Ministry of Corporate Affairs (MCA) records to show the company as “active” instead of under CIRP.
- These actions allegedly allowed the company to secure fresh loans of around Rs 148.87 crore and win government tenders worth nearly Rs 6,000 crore without proper oversight.
Allegations of Judicial Influence
One of the most controversial aspects of the plea involves alleged “judicial influence”.
The petition refers to proceedings at the National Company Law Appellate Tribunal (NCLAT), Chennai, where one of its members reportedly recused himself in an open court hearing.
The member disclosed that a sitting Chief Justice of a High Court had approached him seeking a favorable order for the suspended directors.
The petitioner claims this demonstrates serious influence and interference, and has asked the Supreme Court to ensure a transparent investigation.
What the Petition Seeks
The plea calls for:
- A full, independent probe by the CBI and SFIO into the alleged fraud and collusion.
- An Enforcement Directorate (ED) investigation into possible money laundering and related offenses.
- Immediate correction of KLSR Infratech’s status on the MCA portal to prevent further asset stripping.
- Production of court records and videos including transcripts of critical NCLAT hearings where alleged misconduct was raised.
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