Case Details

Case Name: Udayan Sen & Ors. vs. Union of India

Court/Authority: National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi

Case Numbers: Comp. App. (AT) Nos. 192, 193, 199, 200, 201, and 214 of 2026 (with connected I.A. Nos. 3566 & 3570 of 2026)

Date of Order: 26th May 2026

Underlying Case: Arising from order dated 24/03/2026 in Company Petition No. 3638/MB/2018 filed before the Adjudicating Authority (NCLT)

Period of Dispute: Relates to the auditing of IL&FS Companies.

Parties Involved

Appellants (Challenging the Order):

  • Udayan Sen (Individual)
  • Kalpesh Mehta (Individual)
  • Deloitte Haskins and Sells LLP (Audit Firm)
  • SRBC & Co LLP (Audit Firm)
  • B S R & Associates LLP (Audit Firm)

Respondent: Union of India, represented by the Ministry of Corporate Affairs.

Legal Counsel:

  • For Appellants: Multiple Senior Advocates including Mr. Arun Kathpalia, Mr. Niranjan Reddy, Mr. Jayant Mehta, Mr. Kosh John, and Mr. Sajan Poovayya.
  • For Respondent: Mr. Aditya Sikka, Ms. Onshi Jakhar, and Ms. Yuganshi Singh, Advocates.

Issues / Allegations / Violations

The core issue is the maintainability of proceedings initiated against the appellant auditors under Section 339 of the Companies Act, 2013. The appellants, who audited the IL&FS companies, were impleaded in the main company petition (CP 3638/MB/2018) filed under Sections 241/242 of the Act. Based on reports received, applications were filed to proceed against them under Section 339. The appellants contend that as auditors, they are not covered by the expression "any person, who are knowingly Parties to the carrying on the business" as used in Section 339(1). They argue that specific disqualifications for auditors are already provided under Section 141 of the Act, and thus, they cannot be proceeded against under Section 339.

Findings & Observations

The Adjudicating Authority (NCLT) had rejected the appellants' application objecting to the maintainability of the Section 339 proceedings against them, which is the order being challenged in this appeal. The respondent (Union of India) refutes the appellants' submission, arguing that the expression "Persons who are knowingly Parties to the carrying on the business" is wide and can cover any participant in the business, including auditors. The appellants have relied on two Supreme Court judgments to support their position:

  • 2024 SCC 122: Usha Ananthasubramanian v. Union of India
  • 2023 (8) SCC 56, Union of India v. Deloitte Haskins and Sells LLP and Ors (Paragraph 108)

The NCLAT has noted that these submissions require consideration.

Penalties / Settlements / Directions

This is an interim order; no final penalties or settlements have been decided. However, the NCLAT has issued a significant interim direction: "no further action under Section 339 can be taken against the Appellant" until the question of maintainability, which is the subject of this appeal, is decided. The tribunal clarified that parties are free to press other pending applications for impleadment or interim reliefs, but proceedings specifically under Section 339 are stayed.

Corrective Actions & Future Obligations

The tribunal has set a timeline for the filing of pleadings:

  • The Respondent (Union of India) is allowed two weeks to file a Reply.
  • The Appellants may file a Rejoinder within two weeks after the Reply is filed.

This establishes the procedural obligations for both parties leading up to the next hearing.

Final Ruling & Enforcement

The appeal has not been finally disposed of. The NCLAT has adjourned the matter and listed these appeals for admission or disposal on 15th July 2026. The interim protection granted, which halts any further action under Section 339 against the appellant auditors, will remain in effect until the next date of hearing or until a further order is passed.