Supreme Court to Review NFRA's Authority Over Auditors

The Supreme Court agreed to consider NFRA's plea regarding its power to discipline chartered accountants. The NFRA challenged a Delhi High Court ruling that quashed show-cause notices against auditing firms due to a lack of neutrality. The apex court underscored the need for separate investigating and adjudicatory functions.

The Supreme Court on Monday decided to examine a plea from the National Financial Reporting Authority (NFRA) over its authority to issue show cause notices and discipline chartered accountants and accounting firms.

The NFRA sought the apex court's intervention following a Delhi High Court ruling that upheld the NFRA's powers but invalidated notices against several auditing firms, citing procedural bias. The Supreme Court stressed the necessity of keeping investigative and adjudicatory roles within the NFRA distinct, echoing standard practice in customs and excise law.

Solicitor General Tushar Mehta represented the NFRA, highlighting the effect of the High Court's decision on the body's operational capacity. The Supreme Court emphasized fairness in NFRA's procedures and deferred the matter to April 28 for further proceedings.