IL&FS scam: NCLT allows government to ban Deloitte, BSR for five years

NCLT has rejected the plea made by IL&FS auditors Deloitte and BSR Associates, who had challenged the tribunal’s jurisdiction to ban them for five years.

In June, the Ministry of Corporate Affairs (MCA) had moved NCLT, seeking a ban on the IL&FS auditors for five years.

Deloitte’s counsel Janak Dwarakadas and BSR counsel Darius Khambata had challenged the jurisdiction of NCLT to ban the auditors, pointing out that Section 140 (5) of the Companies Act is applicable only to auditors who are still auditing the company in question, while they have already resigned from the service. Thus they cannot be banned under the circumstances. Section 140(5) of Companies Act states that