DISMISSED!! NCLAT Upholds SFIO Report in Deloitte Haskins’ IFIN Case
The NCLAT has dismissed petitions by Deloitte Haskins and Sells LLP and two associates challenging the admissibility of the Serious Fraud Investigation Office’s (SFIO) second interim report.
The National Company Law Appellate Tribunal (NCLAT) has dismissed petitions by Deloitte Haskins and Sells LLP and two associates challenging the admissibility of the Serious Fraud Investigation Office’s (SFIO) second interim report on Infrastructure Leasing and Financial Services (IFIN). The ruling also upheld a document compilation submitted by the Ministry of Corporate Affairs (MCA), affirming a July 22, 2024, decision by the Mumbai Bench of the National Company Law Tribunal (NCLT).
The NCLAT’s two-member bench ruled that the SFIO report and related documents are admissible under Section 212 (14A) of the Companies Act, which allows the government to seek asset disgorgement or personal liability in fraud cases. “No error was committed by the NCLT in rejecting Deloitte’s objections,” the tribunal stated in its 44-page order, dismissing the firm’s claim that the report lacks legal standing as evidence. It added that such issues would be assessed when the case is decided on merits.
Deloitte, IFIN’s former auditor, argued the interim report and documents were inadmissible, but the NCLAT disagreed. The firm responded, calling the ruling technical, not a judgment on allegations, and said it is exploring legal options. “Our audits adhered to applicable laws and standards,” Deloitte emphasized.
The SFIO probe began after the 2018 IL&FS crisis, triggered by defaults on a Rs 94,000 crore debt. The agency submitted its second IFIN report on May 28, 2019, prompting MCA action under Section 212 (14) the next day, including a criminal complaint and asset-freeze plea. Deloitte was impleaded in July 2019. After unsuccessful challenges at the NCLAT and a withdrawn Supreme Court appeal in February 2024, the MCA amended its application, leading to the current dispute.
The IL&FS meltdown led to the NCLT superseding its board in October 2018, with the NCLAT later framing a resolution plan. The latest ruling keeps the SFIO findings central to the case, paving the way for a detailed merits review.
