Supreme Court to Rule on Foreign Firms’ Role in Lok Sabha Elections

#Latest Published Story: Supreme Court Reserves Order In The Plea By Multinational Auditing Firms For Relaxation Of Lok Sabha Election Monopoly %

The Supreme Court of India has reserved its order on a plea filed by multinational auditing firms, Deloitte, KPMG and others, seeking to challenge the Election Commission's monopoly in conducting the Lok Sabha Elections.

The counsels for the petitioners, senior advocates Arvind Datar and Mukul Rohatgi, contended that the Central government has the authority to prescribe conditions for the audit and accountancy firms and the Election Commission should not have absolute monopoly to conduct the Lok Sabha elections.

A Bench comprising of Chief Justice of India, Ramana, Justice Surya Kant and Justice Aniruddha Bose informed the counsels that the Court is of the opinion that the issues pertaining to the injunction on foreign firms in India and the Election Commission's monopoly can be addressed separately.

Saleem Ahmed, senior counsel appearing for the Election Commission of India, argued that the issue has a wide-ranging impact and hence, the Court should not interfere with the statutory provision.

The Petitioners argued that with the enactment of the Companies Act, 2013, the definition of the term "Accountant" has changed and even foreign firms can hold the title. Furthermore, they contended that the Maharashtra State Bar Council has approved the admission of foreign lawyers to the practice of law in India, hence, the same can be applied to accountancy firms as well.

However, the Bench suggested to the Long Form Joint Auditors (LFJAs) that they can approach the Department of Economic Affairs for seeking any clarifications in this regard and if necessary, they could also file a writ before the high court.

The Court is likely to release its order soon.

The Election Commission of India has always had the monopoly in conducting Lok Sabha elections. However, with the changing scenario, there has been a need to assess whether foreign firms should be allowed to practice in the election process. The Supreme Court has reserved its order on a plea filed by multinational auditing firms, Deloitte, KPMG and others, seeking to challenge the Election Commission's monopoly in conducting the Lok Sabha Elections.

The petitioners, represented by senior advocates Arvind Datar and Mukul Rohatgi, questioned the absolute monopoly of the Election Commission in the conduct of Lok Sabha elections. They argued that the Central government has the authority to prescribe conditions for the audit and accountancy firms, and therefore, the Election Commission should not have complete control over the conduct of the elections.

The Bench, headed by Chief Justice of India, Ramana, and assisted by Justice Surya Kant and Justice Aniruddha Bose, has reserved its order on the matter. During the hearing, the Court maintained that the issues related to the injunction on foreign firms in India and the Election Commission's monopoly should be addressed separately.

Saleem Ahmed, senior counsel appearing for the Election Commission of India, argued that the issue has a far-reaching impact and, therefore, the Court should not interfere with the statutory provisions in place.

The petitioners' counsels argued that with the enactment of the Companies Act, 2013, the definition of the term "Accountant" has changed, and even foreign firms can acquire the title. They further asserted that the Maharashtra State Bar Council has already approved the admission of foreign lawyers to practice law in India, making a strong case for foreign firms to also practice accountancy.

The Bench, however, suggested to the Long Form Joint Auditors (LFJAs) that they could approach the Department of Economic Affairs for seeking clarifications, and if necessary, they could also file a writ petition before the high court.

The Supreme Court is likely to issue its order on the petition soon.

With the evolving business landscape and the increasing involvement of foreign firms in India, the issue of foreign firms practicing accountancy in the conduct of Lok Sabha elections has come into the spotlight. The petition filed by multinational auditing firms, Deloitte, KPMG and others, challenging the Election Commission's monopoly in conducting Lok Sabha elections, has brought this issue to the forefront. The Court has reserved its order, which will be a major turning point in determining whether foreign firms should be allowed to practice in the election process in India or not.