Case Note & Summary
The appeal was filed by Mufin Green Finance Ltd. against an order dated 14/09/2026 from the National Company Law Tribunal, Ahmedabad, which appointed a forensic auditor to examine the accounts related to a security deposit of Rs. 1,34,14,800. The appellant, a listed RBI-regulated non-banking financial company, had entered into a lease agreement with Gensol Engineering Ltd. for 100 electric vehicles, with a security deposit paid by the corporate debtor. Following defaults in payments from March 2025, the appellant forfeited the security deposit and terminated the lease agreement. The corporate debtor's corporate insolvency resolution process commenced on 13/06/2025, and the appellant filed a claim on 10/07/2025. Discrepancies arose regarding the date of adjustment of the security deposit, leading the resolution professional to seek a forensic audit. The appellant contended that the direction for a forensic audit exceeded the adjudicating authority's jurisdiction, arguing that the authority could only address claims related to the insolvency resolution. The respondent countered that the forensic audit was necessary to clarify the date of appropriation of the security deposit, which was disputed. The court found that the adjudicating authority acted within its jurisdiction, as the appointment of a forensic auditor was warranted to resolve factual discrepancies. The appeal was dismissed, affirming the authority's decision to appoint a forensic auditor to ascertain the actual date of adjustment of the security deposit.
Headnote
A) Insolvency Law - Forensic Audit - Jurisdiction of Adjudicating Authority - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - The adjudicating authority appointed a forensic auditor to verify the date of adjustment of a security deposit amidst contradictory claims by the appellant regarding the date of appropriation. The court held that the authority had the jurisdiction to direct a forensic audit to resolve factual disputes arising in the insolvency proceedings (Paras 21-24).
Issue of Consideration
Whether the direction for a forensic audit exceeded the jurisdiction of the adjudicating authority under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.
Final Decision
The appeal was dismissed, affirming the order of the adjudicating authority to appoint a forensic auditor to examine the relevant records and ascertain the date of adjustment of the security deposit.
Law Points
- jurisdiction of adjudicating authority
- forensic audit
- corporate insolvency resolution process
- adjustment of security deposit
