AZB & Partners represented a former partner of KPMG India Private Limited (“Petitioner”) in a Writ Petition that arose from criminal complaint filed by SFIO in 2018 against several individuals and entities, alleging fraud in the merger of Kingfisher Airlines Limited and Deccan Aviation Limited Air in 2008. Based on the SFIO Complaint, the Special Court in Bengaluru issued non-bailable warrants (“NBW”) against all persons named as accused in the SFIO Complaint. The Karnataka High Court was pleased to set aside and quash not just the order of the Special Court, but the SFIO Complaint as a whole.

The High Court, while allowing the batch of writ petitions laid down certain valuable findings under the Companies Act and Criminal Law. For example, it was held that the Special Court established under the Companies Act, 2013 is vested with jurisdiction to try offences under the Companies Act, 2013 only and that it lacks the jurisdiction to try offences under Companies Act, 1956. The High Court further held that jurisdiction of the Special Court established under the Companies Act, 2013 cannot be extended retrospectively. It was also held that professionals (such as the Petitioner) providing services to a company cannot be held liable on the ground of causing fraudulent inducement to the shareholders for giving consent to the scheme of amalgamation in question, if the opinion/advise provided by such professional is within their commercial discretion.

The team comprised of Kamal Shankar, Partner, Atul N Menon, Senior Associate and Arjun Narang, Associate.