Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLT) 1831

NATIONAL COMPANY LAW TRIBUNAL
Prabhat Kumar, Technical Member, Sushil Mahadeorao Kochey, Judicial Member
SRBC & Co LLP – Appellant
Versus
Infrastructure Leasing And Financial Services Ltd. – Respondent
IA 1/2022|IA 2/2022|COMP.APPL/313(MB)2025|COMP.APPL/314(MB)2025|CP/3638(MB)2018

Advocates:
For the Appellants/Petitioners: Aditya Sikka, Onshi Jakhar, Mustafa Doctor, Sagar Divekar, Abhimanyu Mhapankar, Saumya Mishra, Koshy J., Robin Jaisinghani, Prachi Dhanani, Raushan Kumar, Navroz Seervai, VP Singh, Aditya Jalan, Raghav Seth, Ambareen Mujawar, Shreya Choudhary, Akash Manwani, Aksh Jain, Janak Dwarkadas
For the Respondents: Union Of India

The term "any person" in Section 339 of the Companies Act, 2013, is a catch-all provision that extends civil liability to third parties, including statutory auditors, who knowingly participate in, facilitate, or assist in the fraudulent carrying on of a company's business, irrespective of their formal managerial status.

Headnote:(A) Companies Act, 2013 - Sections 241, 242, 246, 339 - Principles of Statutory Interpretation - Applicability of Section 339 to third parties - The Tribunal held that the expression "any person" in Section 339 is not to be interpreted ejusdem generis with "director, manager, or officer" but serves as a catch-all provision to include outsiders who participate in or facilitate the fraudulent carrying on of a company's business. Legislative intent to recover losses from those complicit in fraud precludes a restrictive interpretation that would exempt participants merely because they hold no managerial role. (Paras 12, 18, 26, 41)

(B) Interpretation of Statutes - Ejusdem generis rule - Application of the rule is excluded where it would defeat the object of the provision or where specific words exhaust the class. The context and purpose of the section require that individuals who knowingly aid or abet fraud be held accountable, regardless of their lack of official designation within the company. (Paras 19, 21, 26)

Facts of the case:
Applications were filed challenging the maintainability of proceedings under Sections 241 and 242 of the Companies Act, 2013, seeking to implead statutory auditors and other third parties in investigations into the affairs of a company and its subsidiaries. The applicants argued that statutory auditors and third parties are not "officers" or "managers" and thus fall outside the purview of Section 339 liability.

Findings of Court:
The Court observed that while statutory auditors are not automatically liable for company fraud, they cannot claim immunity if they knowingly participate in or facilitate fraudulent conduct. The determination of "knowledge" and "participation" is a factual issue requiring examination of evidence rather than a threshold jurisdictional matter. (Paras 43, 46)

Issues: Whether the provision regarding personal liability for fraudulent conduct extends to third parties, including statutory auditors, who are not directors, managers, or officers, and whether the term "any person" is limited by the rule of ejusdem generis.

Ratio Decidendi: Section 339 acts as a remedial provision to recoup losses from fraudulent activities; therefore, "any person" encompasses outsiders who actively facilitate or assist in known fraud. Exclusion of such parties at the threshold is premature, as culpability depends on proven knowledge and participation in the fraudulent business conduct.

Result: Applications disposed of; third parties/auditors remain subject to evaluation of their role and culpability during the proceedings.

Table of Content
1. procedural background and parties standing in the il&fs matter. (Para 1 , 2 , 3 , 4 , 8)
2. parties' contentions regarding the scope and applicability of section 339 of the companies act, 2013. (Para 5 , 6 , 7 , 9 , 10 , 11 , 12 , 13)
3. statutory interpretation of 'any person' under section 339; rejection of ejusdem generis doctrine. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27)
4. liability of third-party outsiders for knowing participation in fraudulent business activities. (Para 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41)
5. auditor culpability and necessity of evidentiary examination for section 339 liability. (Para 42 , 43 , 44 , 45 , 46 , 47)

ORDER

1. The Applications CA 313 of 2025, CA 314 of 2025, IA 1 of 2022 and IA 2 of 2022 are filed by M/s SRBC & Co LLP (“SRBC”) (the Respondent No. 29 in CA 162 of 2025), Mr. Ravi Bansal, Partner of SRBC, (“RB”) (the Respondent No. 5 in CA 162 of 2025), Mr. N. Sampath Ganesh, Partner of BSR (“NSG”) (the Respondent No. 325 in CP 3638 of 2018), and M/s BSR & Associates LLP (“BSR”) (the Respondent No. 327 in CP 3638 of 2018) challenging the maintainability of application/petition qua them in CP 3638 of 2018 filed by Union of India in the affairs of Infrastructure Leasing & Financial Services Limited (“IL&FS”) and its subsidiaries under Section 241 and 242 of the Companies Act, 2013. These persons were Statutory Auditor Firm and Partners representing said Statutory Auditor firm of IL&FS Financial Services Limited (“IFIN”) and IL&FS Transportation Network Limited (“ITNL”).

2. The Applicants, SRBC and RB, are sought to be impleaded in terms of CA 162 of 2025 filed by Union of India pursuant to Final Investigation Report received from the SFIO on 18.5.2023 based on its investigation into the affairs of IL&FS Transportation Network Limited (“ITNL”). The SRBC was appointed as ITNL’s Joint Statutory Auditors along with M/s Deloitte Haskins & Sells LLP (“DHS”) for the Financial Year 2016-17 and was appointed again on August 29, 2017 as the sole Statutory Auditor for Financial Year 2017-18.

3. The Applicants BSR and NSG had contested MA 2070 of 2019 qua them, inter alia, on ground of applicability of Section 339 of the Companies Act, 2013 to the Statutory Auditors and their Partners of IL&FS companies as well as Order dated 29.5.2019 passed by this Tribunal forming basis of filing of MA 2070 of 2019 having been set aside by Hon’ble High Court vide order dated 21.4.2020 passed in W.P. (Crl.) 4144 & 4145 of 2019 (“BHC Order”). However, the Ld. Counsel for these applicants fairly concede that BHC order has been set aside by Hon’ble Supreme Court vide its order dated 03.05.2023, accordingly, their objection basis said order does not survive as on date, but they reserve their right to re-agitate this issue again in case the order dated 03.05.2023 is modified by Hon’ble Supreme Court in a review application pending consideration thereat.

4. The Applicants BSR and NSG are already impleaded as Respondent parties in CP 3638 of 2018 in terms of order, passed in MA 2071 of 2019 filed by Union of India pursuant to Final Investigation Report received from the SFIO based on its 2nd investigation report on IL&FS and its subsidiaries titled “Investigation Report IL&FS Financial Services Limited”, and order impleading them as party respondents has subsequently been upheld by Hon’ble NCLAT as well as Hon’ble SC. BSR was appointed as IFIN’s Joint Statutory Auditors along with DHS for the Financial Year 2008-09 to 2012-13 and 2017-18.

5. It is contended by SRBC and RB that the order passed by this Tribunal in MA 2071 of 2019, subsequently upheld by Hon’ble NCLAT as well as Supreme Court qua DHS, BSR and RB, has not taken into consideration the applicability of section 339 of the Companies Act, 2013 to the Statutory Auditors and its signing/engagement Partners, and accordingly this Tribunal ought to consider the scope of Section 339 in relation to

Click Here to Read the rest of this document

2026 Supreme(Online)(NCLT) 1831

NATIONAL COMPANY LAW TRIBUNALPrabhat Kumar, Technical Member, Sushil Mahadeorao Kochey, Judicial MemberSRBC & Co LLP – AppellantVersusInfrastructure Leasing And Financial Services Ltd. – RespondentIA 1/2022|IA 2/2022|COMP.APPL/313(MB)2025|COMP.APPL/314(MB)2025|CP/3638(MB)2018

Cases Referred (1)

NATIONAL COMPANY LAW TRIBUNAL
Prabhat Kumar, Technical Member, Sushil Mahadeorao Kochey, Judicial Member
SRBC & Co LLP – Appellant
Versus
Infrastructure Leasing And Financial Services Ltd. – Respondent
IA 1/2022|IA 2/2022|COMP.APPL/313(MB)2025|COMP.APPL/314(MB)2025|CP/3638(MB)2018