Can mutli-threading java client cause high CPU utilization of SQL Server 2008?
Potentially - yes. Especially on a totally underscaled database server. I would expect problems with 1000 connections, not with something as low as 50.

I would start investigating the SQL sent and see for optimizations there (using precompiled statements) to take load off. Also certain kinds of sub-optimal SQL can lead to significant CPU usage (due to table scans doing tons of processing instead of using an index). For that you need to find the resource intensive queries and analze them (or ask for help here).

Generally: CPU is normally not the limiting factor of a database server, IO etc. come first. But it is possible, to answer your question. Start analyzing.

Last time I had this issue on a large oracle we used 24 cores at nearly 100%, hitting the oracle server with close to 200 threads - and the CPU limitation came out to be an oracle configuration error limiting the database server to ONE CORE. That is how efficient databases are.

And obviously the java app may not even be taxed - if all it does is sending inefficient SQL to the sql server it has not a lot to do except to wait.