N Sampath Ganesh vs Union of India, Ministry of Corporate Affairs

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(Bom) 249

B.P.DHARMADHIKARI, NITIN R.BORKAR
N Sampath Ganesh – Appellant
Versus
Union of India, Ministry of Corporate Affairs – Respondent

Advocates Appeared:
For the Petitioner:Mr. Navroz Seervai, Sr. Counsel a/w Mr. Zal Andhyarujina, Dr. Sujay Kantawala, Mr. V.P. Singh, Mr. Aditya Jalan, Raghav Seth, Mr.Aman Sharma, Ms.Anshula L. Bakhru, Ms. Vanya Chhabra and Mr.Hursh Meghani, Mr. Samarth K. Luthre and Mr. Ayush Chaddha i/b AZB & Partners, Advocate, Mr. Darius J. Khambata, Senior Advocate i/b AZB & Partners, Advocate for Mr. Janak Dwarkadas, Sr.counsel a/w Mr. Mustafa Doctor, Sr. counsel, Mr.Pranav Badheka, Ms.Rhishika Harish, Rahul Dwarkadas, Ms. Prachi Dhanani, Ms.Rohini Jaiswal, Ms. Juhi Bahirwani i/by Veritas Legal, Mr. Robin Jaisinghani i/by Dastur Kalambi & Associates, Mr. Amit Desai, Sr. counsel & Mr. Gopalakrishna Shenoy i/b Dastur Kalambi & Associates, Adv. Aabad Ponda a/w Vikran Negi, Ekta Tyagi, Pratik Thakkar, Bhomesh & Anjali Shah i/b DSK Legal
For the Respondent:Mr. Aspi Chinoy, Senior Advocate a/w Mr. Animesh Bisht, Mr.Aditya Sikka, Adv. Ashish Mehta Saloni Kapadia, Ms.Drishti Das, i/b Cyril Amarchand Mangaldas, Shri H.S.Venegaokar a/w Sneha Prabhu and Ajay Bhise for TR.No. 2 SFIO.

Table of Content
1. background of the case and parties involved (Para 1 , 2 , 3 , 4)
2. constitutionality challenge of section 140(5) (Para 5 , 6 , 7 , 8)
3. court's remarks on need for nclt proceedings (Para 9 , 10 , 14)
4. issues regarding audit findings and investigations (Para 12 , 13 , 18 , 22 , 23)
5. arguments for constitutional validity (Para 15 , 16 , 19 , 20)
6. implications of procedural missteps in auditor removal (Para 30 , 38 , 39 , 40)
7. final judgment and orders pronounced (Para 67 , 68 , 69 , 70 , 71 , 72 , 73)

JUDGMENT :

B.P. Dharmadhikari, J.

1. A prayer made under S. 140(5) of the COMPANIES ACT ,2013 or 2013 Act against the statutory auditors by the Union of India through Ministry of the Corporate Affairs (MCA) in an investigation/dispute regarding constant ever-greening of debts extended to its subsidiary Companies & third parties/companies by IL & FS Financial Services Limited (hereinafter referred to as “IFIN”) and alleged dubious role played by its CAs ie company auditors before National Company Law Tribunal ie NCLT and orders passed therein, gives rise to the present bunch of petitions. Petitioners state that said S. 140(5) is unconstitutional and in any case, can

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2020 Supreme(Bom) 249

B.P.DHARMADHIKARI, NITIN R.BORKARN Sampath Ganesh – AppellantVersusUnion of India, Ministry of Corporate Affairs – Respondent

Cases Referred (113)

B.P.DHARMADHIKARI, NITIN R.BORKAR
N Sampath Ganesh – Appellant
Versus
Union of India, Ministry of Corporate Affairs – Respondent