M/s. Bhagyodayam Company vs Shri Babu A Kallivayalil

09.12.2022: Heard the ‘Appellant’ through its ‘Administrator’ (Appearing in person) in the instant Unnumbered Company Appeal (AT) (CH) (D.No.900799/2022).

The ‘Appellant’ / ‘Applicant’ assails the ‘impugned order’, in IA(C/Act)/15(KOB/2022) in Company Petition TCP/21/KOB/2019 dated 18.04.2022, on the file of the ‘National Company Law Tribunal, Kochi Bench, Kochi’, whereby and whereunder, the National Company Law Tribunal, Kochi Bench, Kochi Bench, Kochi at ‘Paragraph No.22’, among other things, it was observed that: -

This ‘Tribunal’, although has ‘Heard’ the ‘Administrator’ of the ‘Appellant’ / ‘Applicant’ (Appearing in person) in this ‘Appeal’, for quite some time, this ‘Tribunal’, is of the considered view that, notwithstanding the fact, that the National Company Law Tribunal, Kochi Bench, Kochi Bench, Kochi had adverted to, at ‘Paragraph 17’ of the ‘impugned order’, the ‘Agreement’ for fixation of an ‘Audit Fee’ at Rs.1,00,000/- (Rupees One Lakh Only), as per the letter referred to by the ‘Auditor’, and further that the letter dated 01.06.2020, in which the clause appears is devoid of the informed consent of the ‘Administrator’, who objected to the same, when he, later took note of it, while scrutinising the same page by page, there is no reference to the said averment(s) in the ‘impugned order’ passed by the ‘Tribunal’ i.e., how it was adverted upon, pertaining to the ‘pros and cons’, of the said averment(s) made in the ‘Rejoinder’, as well as the ‘Documents’ filed by the ‘Appellant’ (Applicant).

Considering the fact, that the Letter dated 01.06.2020 was not discussed or dealt with in qualitative and quantitative terms, in regard to the ‘pros and cons’, of the said contents, by means of ‘Evaluation’, this ‘Tribunal’, comes to a ‘cocksure opinion’, that the conclusion arrived at, by the National Company Law Tribunal, Kochi Bench, Kochi, in the ‘impugned order’, dated 18.04.2022 in IA(C/Act)/15(KOB/2022) in Company Petition TCP/21/KOB/2019, by observing that an ‘Amount’ of Rs.2,00,000/- x 6 = 12,00,000/- (Twelve Lakh Only), along with an ‘Applicable Goods and Service Tax’ would be the reasonable ‘Amount’, to be paid by the ‘Appellant’ / ‘Applicant’, as ‘Fee’ of the ‘Auditor’, cannot be countenanced, in the eye of ‘Law’.

Be it noted, that a ‘Tribunal’ / an ‘Adjudicating Authority’, is required to pass a ‘reasoned order’, in a given case, after examining the ‘pros and cons’ of the ‘Pleas’, and the stand taken by the ‘Parties’. It cannot be gainsaid, that a ‘reasoned order’ will have an ‘Appearance of Justice’ and ‘unreasoned order’ is an invalid and not a correct one, from the point of view of the ‘Person’, who is dissatisfied with the same.

If a ‘Tribunal’, / ‘an Adjudicating Authority’, in a ‘given case’, passes a ‘detailed Order’, by adverting to the ‘necessary materials’, placed on ‘record’, then, it will enable the ‘Appellant’ / ‘Superior Forum’, to ‘test’ the benefit of the ‘Order’, so passed.

As far as the ‘present case’ is concerned, this ‘Tribunal’, on going through the ‘impugned order’ dated 18.04.2022 in IA(C/Act)/15(KOB/2022) in Company Petition TCP/21/KOB/2019 passed by the National Company Law Tribunal, Kochi Bench, Kochi comes to an ‘inevitable’, ‘irresistible’ and ‘inescapable’ conclusion, that the said ‘Order’, suffers from ‘Legal infirmity’, in that, the ‘contents’ of letter dated 01.06.2022 of the ‘Babu A. Kallivayalil & Co., Chartered Accountants were not adverted to b y the ‘Tribunal’ in detail, especially, touching upon, the aspect of ‘Fees’, Clause 2.1 (vide Page 47 Annexure 2 of ‘Appeal Paper Book’ D.No.376 dated 06.05.2022).

Viewed in that perspective, this ‘Tribunal’, is perforced to ‘interfere’ with the ‘impugned order’ dated 18.04.2022 in IA(C/Act)/15(KOB/2022) in Company Petition TCP/21/KOB/2019, wherein the ‘Amount’ of Rs.12,00,000/- (Rupees Twelve Lakh Only), along with an ‘Applicable GST’ was observed to be the ‘reasonable amount’, to be paid by the ‘Appellant’ / ‘Applicant’, as an ‘Auditor’s Fee’ and the same is hereby set aside, by this ‘Tribunal’, to secure the ends of ‘Justice’.

In the light of the foregoing, this ‘Tribunal’, directs the National Company Law Tribunal, Kochi Bench, Kochi, to restore the IA(C/Act)/15(KOB/2022) in Company Petition TCP/21/KOB/2019 to its ‘File’, within ‘Two Weeks’ from ‘Today’ and after restoring the said IA(C/Act)/15(KOB/2022) in Company Petition TCP/21/KOB/2019, is directed to ‘dispose of’ the same in ‘De NOVO’ fashion, ofcourse, after providing adequate opportunities, to the respective parties, by adhering to the principles of ‘Natural Justice’ in ‘true letter and spirit’.

In any event, the ‘Tribunal’ shall endevour to ‘dispose of’ the said IA(C/Act)/15(KOB/2022) in Company Petition TCP/21/KOB/2019, within a period of ‘Four Weeks’, from the date of ‘receipt’ of a copy of this ‘Order’, ofcourse, uninfluenced and untrammelled, with any of the ‘Observations’ made by this ‘Tribunal’ in the instant unnumbered Company Appeal.

Before parting with the Case, this ‘Tribunal’, make it clear that in view of the fact that this ‘Tribunal’ had set aside the ‘impugned order’ dated 18.04.2022 in IA(C/Act)/15(KOB/2022) in Company Petition TCP/21/KOB/2019, is set aside by this ‘Tribunal’, ‘Today’, the aspect of considering the ‘Appellant’ of a ‘new Auditor’ from the ‘List’ produced by the ‘Administrator’, does not arise, and as such, the ‘Direction’ issued by the National Company Law Tribunal, Kochi Bench, Kochi in the ‘impugned order’ in IA(C/Act)/15(KOB/2022) in Company Petition TCP/21/KOB/2019 dated 18.04.2022, in this regard, is hereby set aside, to prevent an ‘aberration of justice’ and in furtherance of ‘substantial cause of Justice’. The National Company Law Tribunal, Kochi Bench, Kochi is directed to permit the respective parties to raise all ‘factual and legal Pleas’, before it and then, to pass a ‘reasoned speaking Order’, afresh, in the subject matter, in issue.

With the above said ‘Observations’ and ‘Directions’ the unnumbered Company Appeal (AT) (CH) stands ‘disposed of’. No Costs.