When the appeal came up for hearing before a bench comprising Justices Huluvadi G Ramesh and Dhandapani, the latter recused himself as he had served as the counsel for the Enforcement Directorate before his elevation as high court judge.
The bench later directed the registry to place the appeal before the Chief Justice for allotment to some other bench.
In her appeal, Ms Nalini, a senior advocate, has challenged the April 24 order of Justice SM Subramaniam dismissing her petition against the ED's summons asking her to appear as a witness in its money laundering probe in the Saradha chit fund scam case.
He rejected her contention that women cannot be called for investigation out of their place of residence under CrPC Sec 160, saying such exemptions are not mandatory and are subject to facts and circumstances of a case.
The judge had also directed the ED to issue fresh summons, following which the agency had on April 30 issued the summons asking Ms Nalini to appear before it on May 7.
She was allegedly paid a legal fee of Rs 1 crore by the Saradha Group for her appearances in court and the Company Law Board over a television channel purchase deal.
In her appeal, Ms Nalini alleged it was an extremely dangerous trend whereby a premier investigating agency of the country had virtually unleashed a reign of terror by knowingly and deliberately subverting the process of law for wholly mala fide, extraneous and vexatious considerations.
"If this trend of summoning and calling advocates who have been engaged by their clients for rendering professional services is not nipped in the bud, it may lead to disastrous consequences," she has said.
In another related matter, the first bench comprising Chief Justice Indira Banerjee and Justice P T Asha adjourned petitions filed by Ms Nalini, her son Karti Chidambaram and his wife Srinidhi seeking to quash the prosecution initiated against them by the Income Tax Department under the Black Money Act for allegedly not disclosing their foreign assets.