Forensic audit evidence rejected where unsigned, disclaimer laden and uncommissioned by authorised parties; fresh audit relief denied.

The article addresses whether an unsigned, disclaimer laden forensic/transaction audit report commissioned by suspended management should be admitted and whether the Resolution Professional must undertake a fresh audit and re examine admitted claims. It explains that the Insolvency and Bankruptcy Code framework vests commercial decision making with the committee of creditors and imposes duties on the resolution professional; an unsigned report risks bias, conflict of interest and confidentiality breaches and the suspended management lacked authorised locus to commission it. The note concludes the adjudicating authority lawfully excluded the report and dismissed the IA after assessing procedural and evidentiary infirmities and maintainability under the Code.

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Issues: Whether the Adjudicating Authority erred in refusing to take on record the Baker Tilly forensic/transaction audit report and in dismissing IA No. 151 of 2025 filed by the suspended management seeking directions for a fresh transaction/forensic audit and re-examination of admitted claims.

Analysis: The appeal challenges only IA No. 151 of 2025 which sought recording and ruling upon a forensic audit report purportedly commissioned by the suspended management and reliefs directing the Resolution Professional to conduct fresh transaction/forensic audit and re-examine admitted claims. The statutory framework under the Insolvency and Bankruptcy Code, 2016 and the CIRP regulations recognises the role and duties of the resolution professional and the commercial decision-making authority of the committee of creditors. The Adjudicating Authority examined the Baker Tilly report and found it unsigned, unstamped, replete with extensive disclaimers and lacking indicia of independent audit ownership and authenticity. The Adjudicating Authority also noted that the suspended management had no authorized locus to commission a transaction/forensic audit at its own instance, that such a report risked conflict of interest and bias, and that confidentiality of CoC information could be breached by unilateral commissioning. The record showed that the resolution professional had formed and filed his opinion and had initiated appropriate avoidance proceedings, and that objections to those proceedings by the suspended management were already on record. The impugned order therefore assessed both procedural and evidentiary infirmities in treating the Baker Tilly report as reliable or admissible and evaluated maintainability of the prayer under Sections 60(5) and 65 of the Code in the context of the facts presented.

Conclusion: The Adjudicating Authority did not err in refusing to take on record the unsigned and disclaimer-laden forensic/transaction audit report commissioned by the suspended management and in dismissing IA No. 151 of 2025; the appeal is dismissed and the impugned order is affirmed.

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