Delhi High Court - Orders
Deloitte Haskins & Sells Llp vs Union Of India & Anr on 12 September, 2023
Author: Yashwant Varma
Bench: Yashwant Varma, Dharmesh Sharma
$~24
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 1065/2021 & CM APPL. 9896/2021 (Direction)
DELOITTE HASKINS & SELLS LLP ..... Petitioner
Through: Appearance not given for
petitioner in W.P.(C)
1065/2021.
Mr. Arun Kathpalia, Sr. Adv.
with Ms. Aayushi S.
Khazanchi, Mr. Vinayak
Chawla and Mr. Aditya
Dhupar, Advs. in W.P.(C)
1522/2020.
versus
UNION OF INDIA & ANR. ..... Respondents
Through: Mr. Chetan Sharma, ASG with
Mr. Vikram Jetly, Mr. Kirtiman
Singh, Mr. Ravi Prakash, Ms.
Siva Lakshmi, CGSCs with Mr.
Amit Gupta, Ms. Shreya Jetly,
Mr. Vinay Yadav, Mr.
Ghanshyam Jha, Mr.
Vikramaditya Singh, Mr. Waize
Ali Noor, Mr. Varun Rajawat
and Ms. Vidhi Jain, Advs. for
NFRA.
Mr. Zoheb Hossain, Mr. Vivek
Gurnani, Ms. Manisha Dubey
and Ms. Farheen Penwale,
Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE DHARMESH SHARMA
ORDER
% 12.09.2023 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 18:29:54
1. One of the issues which had arisen in the course of hearing submissions addressed on behalf of the petitioners was of the Audit Quality Review Report [AQRR] and the ultimate initiation of disciplinary proceedings being regulated and controlled by the same authority.
2. Our attention was drawn to the provisions of Section 132 of the Companies Act, 2013 [the Act] as well as the National Financial Reporting Authority Rules 2018 ["2018 Rules"] and which allude to Divisions of the Authority carrying out investigation, inquiry and disciplinary proceedings. In order to obtain clarity on the factual position as it existed at the time when the impugned Show Cause Notices had been issued, we had invited Mr. Hossain, learned counsel to obtain instructions.
3. Mr. Hossain, on instructions, apprises us today that as contemplated under Section 132 of the Act, all functions relating to auditors falling under the purview of the National Financial Reporting Authority ["the Authority"] and which include monitoring, enforcement, investigation, disciplinary action are carried out by or on behalf of the Authority by the Executive Body. Mr. Hossain further submitted that it would be the contention of the Authority that the Executive Body stands duly empowered to take appropriate measures as contemplated under Section 132(4) of the Act.
4. In fact, and according to Mr. Hossain, the Executive Body would in itself constitute a Division as defined and contemplated under the Act and the 2018 Rules. It was further contended that neither Section 132 nor the 2018 Rules contemplates a strict "separation of powers" or a bifurcation of functions relating to This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 18:29:54 investigation, inquiry and conduct of disciplinary proceedings.
5. On facts, it was stated that the body which drew up the AQRR is the one which initiated proceedings under Section 132(4) of the Act.
6. Mr. Hossain, in light of the submissions aforenoted, is accorded liberty to file an additional affidavit placing on the record the details with respect to proceedings drawn and initiated by the Authority and drawn against the petitioners here. That affidavit shall place on the record complete details of the personnel who penned the AQRR in each particular case as well as the complement of persons who initiated action under Section 132(4) and ultimately passed the orders impugned.
7. Mr. Kathpalia, learned senior counsel is continuing with his submissions. Let the matter be called again on 09.10.2023 as part heard in the category of "End of Board" matters.
YASHWANT VARMA, J.
DHARMESH SHARMA, J.
SEPTEMBER 12, 2023 SU This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 18:29:54