The High Court has recently upheld the constitutionality of Section 140(5) of the Companies Act, 2013, which provides for the disqualification of statutory auditors involved in fraudulent activities. The Court held that the provision does not extend to statutory auditors who have formally resigned from their positions or are no longer serving as auditors for the company.

This judgment has significant implications for the regulation of auditors and the prevention of corporate fraud. The Court’s decision emphasizes the need for auditors to act with diligence and integrity, and the consequences of failing to do so. This ruling also highlights the importance of the Companies Act in promoting corporate governance and transparency.