The Top Court has refused to intervene in the order passed by the Bombay HC that gave relief to BSR & Associates limited liability partnership (LLP), a KPMG network firm, in the Infrastructure Leasing & Financial Services Limited (IL&FS) (IFIN) case.
The Ministry of Corporate Affairs had approached the Top Court after the Bombay HC granted a stay on National Company Law Tribunal (NCLT) proceedings against the auditors until further orders. The govt is seeking a 5-year ban on audit firms KPMG & Deloitte for their alleged roles in the Infrastructure Leasing & Financial Services Limited (IL&FS) failure.
“We are of the view that the controversy in question & the issues that have been raised before the HC need to be considered at an early date,” said the division bench of justices UU Lalit & Indira Banerjee. “We, therefore, direct the petitioners (govt) before us to put in their affidavits…and direct that the original writ petitioners (BSR & Associates) shall file their affidavits in rejoinder…The parties have assured us that they willn't seek any adjournment on any count & shall be ready to go ahead with the final hearing on 03.10.2019.”
The Supreme court further said that these directions are passed, so that the matter could be taken up for final disposal by the high court in Oct.
Earlier this month, a division bench of the Bombay HC stayed proceedings in National Company Law Tribunal (NCLT) against both firms. Earlier, National Company Law Tribunal (NCLT) had ruled that it had jurisdiction to ban both Deloitte Haskins & Sells & BSR for 5 years each for their alleged roles in the I-FIN case.
Investigations by the ministry’s probe agency had alleged a fraud case & estimated that the fraud involved a sum of more than Rs 90,000 crore.
The govt also told the Top Court that Infrastructure Leasing & Financial Services Limited (IL&FS) had passed a resolution to appoint Mukund M Chitale & Co as the statutory auditors, but the audit firm had expressed its inability to take up the assignment. In such a scenario, the board will have to propose the name of a new auditor that will be approved by National Company Law Tribunal (NCLT).
“We see no reason why steps in that behalf couldn't be undertaken with promptitude so that the interest of the company is not prejudiced on any count,” said the Top Court in its order.
Tushar Mehta, Solicitor General of India, is representing the govt along with L Vishwanathan of Cyril Amarchand Mangaldas. BSR & its partners are being represented by senior counsel Mukul Rohatgi & Darius Khambata & VP Singh of AZB & Partners.
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