Take action against foreign accounting firms violating law: SC

The Supreme Court today asked the government to take action against those foreign accounting firms which are operating in India and found violating the law in any manner.

A bench, comprising Justices A K Goel and U U Lalit, was informed by the Centre that they were taking action against the firms which were violating the provisions of the Companies Act.

"Rule of law has to be established. You (government) see whether law is violated or not and take action. If you are taking action, nothing is required to be said by us. We are not looking into individual matters," the bench said.

"If the state is looking into it, we do not think we have to give any directions," the court said.

It, however, said that it would hear all the objections raised by the respective parties in the matter as it cannot "brush aside the objections" without hearing them.

"We will consider everybody's objection. We are open to decide all the objections but we do not want to delay," it said.

The court observed this after senior advocate Mukul Rohatgi, appearing for one of the parties, raised preliminary objection over the petition filed by NGO, Centre for Public Interest Litigation (CPIL), which has alleged that foreign accountancy firms were practising here in violation of law.

Rohatgi said that "nothing concrete" was there in the plea and the "petitioner has no right to come to the Supreme Court and go against private people".

"You have to decide my objections first. Article 32 of the Constitution was made for downtrodden and not for this," he said, adding that these firms have a reputation worldwide and they also have their rights.

Advocate Prashant Bhushan, appearing for CPIL, claimed that Institute of Chartered Accountants of India (ICAI) had prepared a report in 2011 and said these foreign firms were practicing in India in violation of the law.

"They are so-called big firms and very powerful, so they are able to stop action against them," he told the bench, adding that the ICAI was asked by the court earlier to file a status report which they have not furnished.

During the hearing, Bhushan also raked up the issue about the functioning of a prominent UK-based accounting firm operating in India.

Meanwhile, the ICAI's counsel told the bench that they have prepared their status report but they do not want to disclose the names of the firms in it.

The bench, which fixed the matter for hearing of October 31, asked ICAI to file its status report in the matter.

The NGO has sought a probe against foreign accountancy firms operating in India for allegedly indulging in financial irregularities and fudging of accounts.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

TAGS:

Economy