Justice Naolekar, a third-generation law professional, was also notably a part of the Supreme Court benches which confirmed Afzal Guru's death penalty and helped decriminalise homosexuality, a report by Indian Express highlights.

However, it was as Lokayukta of Madhya Pradesh – a post he took up after retiring from the Supreme Court – that he saw the most controversy.

The Indian Express report notes that RTI activist Ajay Dubey had alleged in 2009, when Justice Naolekar had been named Lokayukta, that no selection panel had been made and mandatory procedure had not been followed.

While Madhya Pradesh Governor Ram Naresh Yadav had then ordered “necessary action,” Dubey and former state DGP Arun Gurtoo had moved a petition in the Supreme Court, alleging that former MP chief minister, Shivraj Singh Chouhan, had played a central role in Justice Naolekar’s appointment. This also came at a time when the Lokayukta was hearing a corruption case over the purchase and leave of four dumper machines against the chief minister.

By 2010, Indian Express had reported, the Lokayukta office under Justice Naolekar had exonerated Chouhan and his wife Sadhna Singh.

In 2018, the Madhya Pradesh high court dismissed a review petition filed by Congress leader K.K. Mishra against Chouhan and Singh.

In 2014, the Chouhan government amended the MP Lokayukta and Uplokayukta Act to allow incumbent Lokayuktas to continue in office beyond their statutory six-year term until a replacement was named. Justice Naolekar therefore demitted office in 2016 instead of 2015.

In 2005, a bench of Justice Naolekar and Justice M.B. Shah upheld the controversial death sentence awarded to Afzal Guru in the parliament attack case.

In 2006, a bench of Justice Naolekar and Justice Y.K. Sabharwal heard the Naz Foundation’s appeal against the Delhi high court dismissal of its petition against Section 377 of the Indian Penal Code, that criminalised consensual same-sex relations.

The bench determined that the high court could not refuse to hear a constitutional question just because it appeared to be abstract or lacked a pending prosecution. The high court eventually in 2009 declared Section 377 unconstitutional.