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We know that NCLT has passed an order under Section 140 (5) of the Companies Act, 2013 against Deloitte Haskins and Sells LLP, a Network Firm of Deloitte India and BSR Associates, a Network Firm of KPMG India in August, 2019.

 Deloitte Haskins and Sells challenged the constitutional validity of Section 140 (5) of the Companies Act as well as the Centre’s plea at NCLT that seeks a five-year ban on former auditors of IL&FS Financial Services (IFIN).

 Senior advocate Amit Desai, who appeared for the Deloitte, told the court that the facts of the case are very much similar to the plea filed by BSR & Associates LLP, an affiliate firm of KPMG.

 Last month, in temporary relief to BSR, the court stayed the proceedings against the audit firm in the Mumbai bench of the NCLT until further order.

 Law firm Veritas Legal is advising Deloitte in the case, while VP Singh, partner of law firm AZB & Partners, is advising BSR & Associates in the dispute.

In August, BSR & Associates and N Sampath Ganesh, a partner with the firm, filed a case against the government after the tribunal allowed its proposed removal as auditors of IFIN — a position BSR had already resigned from— for alleged role in financial irregularities in the firm.

 LETS FIND OUT THE GROUNDS ON WHICH DELOITTE HASKINS AND SELLS LLP IS APPEALING

 Section 140(5) of the Companies Act,2013 states:
"Without prejudice to any action under the provisions of this Act or any other law for the time being in force, the Tribunal either suo moto or on an application made to it by the Central Government or by any person concerned, if it is satisfied that the auditor of a company has, whether directly or indirectly, acted in a fraudulent manner or abetted or colluded in any fraud by, or in relation to, the company or its directors or officers, it may, by order, direct the company to change its auditors"

 Crux of the Deloitte Appeal:
On reading this section one can understand the power of Tribunal (NCLT) is to remove those who are continuing as auditors but not those who have already resigned.