Ayyagarii Krishna Rao Vs National Financial Reporting Authority (Telangana High Court)
Telangana High Court held that writ petition cannot be entertained against show cause notices issued by National Financial Reporting Authority [NFRA]. The same should be questioned before appropriate forum.
Facts- The petitioner is Chartered Accountant. The respondent-National Financial Reporting Authority while exercising the power as regulatory authority has issued impugned show cause notice dated 09.11.2022 to the petitioner directing him to submit audit files for Statutory Audit of M/s. Concord Drugs Limited for the Financial Years 2015-16 and 2016-17. Notably, the petitioner has provided all the documents relating to the said Financial Years vide letters dated 23.11.2022, 05.01.2023 and 17.01.2023. The grievance of the petitioner is that even after receipt of the said letters, the respondent has issued impugned show cause notice dated 04.10.2023 calling for explanation from him. Challenging the same, the writ petition is filed.
Conclusion- It is a well-settled principle of law that the legislature has the authority to enact laws with either prospective or retrospective effect. However, while it may retrospectively declare an act to be an offence, it cannot impose a punishment greater than what was prescribed at the time the act was committed. Article 20(1) of the Constitution of India protects individuals from ex post facto penal laws in respect of conviction and punishment. Although this protection does not extend to civil consequences such as forfeiture of property, cancellation of licenses, or debarment from business activities, any retrospective application of a penal or quasi-penal provision must be narrowly interpreted. Therefore, while NFRA may be permitted to initiate disciplinary inquiries for misconduct committed prior to its constitution, it cannot impose enhanced punishments that were not in force at the relevant time.
