BSR & Associates LLP Vs Serious Fraud Investigation Office (NCLAT Delhi)
Summary: The National Company Law Appellate Tribunal, Principal Bench, New Delhi dismissed Company Appeal (AT) Nos. 182 and 183 of 2026 challenging the NCLT Mumbai order dated 17.03.2026 which had rejected the appellants’ objection to the maintainability of proceedings for attachment and disgorgement arising from the Serious Fraud Investigation Office investigation into IL&FS Securities Services Limited (“ISSL”). The first appeal was filed by BSR & Associates LLP, which had acted as auditor of ISSL. The principal contention was that SFIO had no power or locus to file an application before the NCLT seeking attachment/disgorgement under Section 212(14A) of the Companies Act, 2013, because that provision expressly empowers the “Central Government” to file such an application.
The appellants argued that Section 212(14A), read with Section 458 and Section 2(58) of the Companies Act, required any delegation of the Central Government’s statutory power to be made by a notification published in the Official Gazette. They contended that the Ministry of Corporate Affairs’ letter dated 26.09.2023 merely constituted an executive or administrative authorisation and could not confer upon SFIO a statutory power vested exclusively in the Central Government. Reliance was placed on Sant Ram Sharma Vs State of Rajasthan & Ors., Union of India & Anr. Vs Ashok Kumar Aggarwal, Dr. J.S. Raghuvanshi & Ors. Vs State of MP & Ors., and State of Haryana Vs PC Wadhwa, IPS, Inspector General of Police & Anr. for propositions concerning executive instructions, statutory provisions and delegation.
The NCLAT examined four material events. On 30.09.2018, the Central Government ordered an SFIO investigation into the affairs of IL&FS and its subsidiaries, including ISSL. On 14.07.2023, SFIO submitted its investigation report concerning ISSL under Section 212(12) to the Central Government.
