K Ray and Associates & Ors. vs Reserve Bank Of India & Anr.

Learned counsel for the petitioners prays for interim stay of the impugned list of 109 auditors, appointed by respondent no. 2. It is argued on behalf of the petitioners that such appointments are de hors the law and violate the fundamental right of equality of the petitioners, guaranteed under Article 14 of the Constitution of India, insofar as the appointed auditors are on similar footing as the petitioners.

Learned counsel appearing for the petitioners places reliance on the extant Rules in this regard and argues that the guidelines issued by the Reserve Bank of India contemplate that, although the appointments shall be on an annual renewal basis, termination prior to four years without the consent of the Reserve Bank of India and/or in the absence of failure of the auditors to fulfill the eligibility conditions is patently violative of such guidelines. Learned counsel places particular reliance on this score on guidelines 3 and 9 at pages 41 and 42 of the writ petition respectively.

Learned counsel further submits that the impugned appointments, in the teeth of a previous order of this Court regarding other similarly placed persons, tantamount to violation of the spirit of the previous order.

Learned senior counsel appearing for the Reserve Bank of India disputes such allegations and submits that the procedure adopted by the respondent no. 2 was not violative of any Reserve Bank of India guidelines.

Learned counsel appearing for respondent no. 2 takes a preliminary objection as to the non- maintainability of the writ petition due to non-joinder of necessary parties, being the 109 auditors already appointed, who will be directly affected by the outcome of the present writ petition. That apart, it is argued that if petitioner could wait for so long, there is no justification in arresting the audit process midway.

It is further submitted by learned counsel for the respondent no. 2 that the petitioners are mere fence- sitters and waited for the previous order being passed by this Court in a different matter, before moving the present writ petition.

Upon consideration of the submissions of the parties, it is apparent that the statutory audit process has already begun and the last date for submission of the reports is May 31, 2021. Although the risk remains that the audit process will be completed before this matter is heard out, that, ipso facto, does not justify staying the statutory audit process entirely due to alleged violation of the rights of certain individual auditors.

The balance of convenience and inconvenience is squarely against the grant of stay of the impugned list because the same will tantamount to arresting the entire statutory audit process, which is required to be concluded within a limited period as per law.

Hence, the prayer for interim order is refused at this stage.

The respondents shall file their affidavit(s)-in- opposition within a fortnight from date. Reply thereto, if any, shall be filed within three days thereafter.

The writ petition shall be enlisted next for hearing on May 06, 2021 for being taken up at 2.P.M.

All steps taken on the basis of the impugned list of auditors in the meantime shall abide by the result of the writ petition.