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NCLAT Agrees To Hear Pleas Of IL&FS Auditors Against Impleadment

The NCLT Mumbai bench had stayed its own order for four weeks to allow the auditors to appeal against the impleadment.

Deloitte was IL&FS’s financial auditor for 2017-18. BSR Associates is still the auditor of the company. (Photographer: Abhijit Bhatlekar/Bloomberg News)
Deloitte was IL&FS’s financial auditor for 2017-18. BSR Associates is still the auditor of the company. (Photographer: Abhijit Bhatlekar/Bloomberg News)

The National Company Law Appellate Tribunal has said it would hear the pleas of auditors of IL&FS -- Deloitte Haskins & Sells and BSR Associates -- against an order passed by NCLT to implead them in the ongoing case of oppression and mismanagement of the scam-hit firm.

The case will be heard on Aug. 19. A two-member bench of the NCLAT has directed the Ministry of Corporate Affairs and others to file their replies in the matter within a week. "Interim order dated 23rd July, 2019 passed by the National Company Law Tribunal, Mumbai Bench, Mumbai, in MA Nos. 2581 & 2071 of 2019 in CP 3638/241-242/2018 shall continue till next date," the NCLAT said.

It further added, "However, the interim order will not come in the way of the National Company Law Tribunal and the Union of India to proceed in accordance with law." Earlier, the Mumbai bench of the NCLT had on July 18 allowed the MCA's plea to prosecute Deloitte, BSR Associates and other auditors for their failure to detect and report the scams that took place at IL&FS under their watch as auditors.

Udayan Sen and Kalpesh Mehta, partners at Deloitte, and Sampath Ganesh, a partner at BSR & Associates, had also been impleaded as respondents by the NCLT order. On July 23, the NCLT Mumbai bench had stayed its own order for four weeks to allow the auditors to appeal against the impleadment.

In its order, the NCLAT, while seeking the government's response on the auditors' plea against impleadment, said the NCLT Mumbai bench's order of stay would continue till Aug. 19, when it would hear the case.

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