Relief to Deloitte: NCLAT Sets Aside NCLT Order Allowing Amendment in IL&FS Case Without Judicial Approval [Read Order]

The National Company Law Appellate Tribunal (NCLAT) has granted relief to Deloitte Haskins & Sells LLP and has set aside an order passed by the National Company Law Tribunal (NCLT), which had permitted the Union of India to amend the Company Petition (CP) No. 3638 of 2018 related to the IL&FS (Infrastructure Leasing & Financial Services Limited) case without seeking prior leave of the court. The NCLAT held that the inclusion of a new prayer clause (e) in the amended petition was unsustainable as it was added without filing a formal application or obtaining judicial approval.

In this case, Deloitte Haskins & Sells LLP, Manu Kochhar, Udayan Sen, Rajesh Kotian, Kalpesh Mehta, and Milind Patel filed appeals against the order passed by the NCLT on 22-7-2024.

The NCLT had rejected their applications objecting to the amendment made by the Union of India in CP No. 3638 of 2018, which sought to declare certain respondents, including the appellants, as knowingly involved in fraudulent conduct under Section 339 of the Companies Act, 2013.

It was contended by the appellants that the amendment was carried out without following due process, violating Rule 155 of the NCLT Rules, 2016, and principles of natural justice.

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In this case, the original petition was filed by the Ministry of Corporate Affairs (MCA) in 2018, which sought to investigate IL&FS and its subsidiaries for alleged financial irregularities. Over time, the petition was amended multiple times, including an amendment allowed on 25-11-2019, which permitted the Union of India to supplement or modify reliefs by filing further applications. The contentious amendment in February 2024 introduced prayer clause (e) without a formal application or court leave, leading to the appellants' objections.

The NCLAT noted that Rule 155 of the NCLT Rules mandates that any amendment to pleadings requires leave of the court. The bench noted that “It is submitted that the provision of Rule 155 of NCLT Rules, 2016, empowers amendment in the petition to the effect that amendment is

required to be carried out with leave of the court. Without leave of the Court,

no application can be amended.”

The NCLAT concluded that the NCLT erred in allowing the amendment without due process. It directed the Union of India to delete prayer clause (e) from the amended petition and clarified that the government could file a fresh application for amendment, subject to judicial scrutiny.

The bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), allowed the appeals.

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