Supreme Court Reviews NFRA's Authority Over Chartered Accountants

The Supreme Court has agreed to review the National Financial Reporting Authority's (NFRA) plea regarding its authority to issue show cause notices and discipline chartered accountants and accounting firms. This comes after a Delhi High Court ruling that upheld NFRA's powers under the Companies Act but quashed specific show cause notices due to procedural bias. The High Court criticized the NFRA for having the same officials issue notices and adjudicate penalties, which it deemed compromised fairness. During the Supreme Court proceedings, Chief Justice Sanjiv Khanna emphasized the need for separating investigatory and adjudicatory roles within the NFRA to ensure impartiality. Solicitor General Tushar Mehta raised concerns about the operational impact of the High Court's ruling on the NFRA, which is a small body of three members. The case is set for further hearing on April 28.