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Judgment
ORDER
Company Appeal (AT) (CH) No.27/2024:
After arguing for some length, the Learned Senior Counsel Mr. P.H. Arvindh Pandian, prays that he may be permitted to withdraw the Appeal. The said prayer is accepted, and is permitted to be dismissed as withdrawn, and accordingly, the same is dismissed as withdrawn.
Company Appeal (AT) (CH) No.28/2024:
In the Comp App (AT) (CH) No.28/2024, the Impugned Order dated 02.05.2024 as it was passed by the National Company Law Tribunal, Kochi Bench, in IA No. (C/ACT)/64/KOB/2024 in CP No.02/KOB/2020 is sought to be challenged. In the proceeding of the CP No.02/KOB/2020, the Forensic Audit was directed to be conducted and as a consequence thereto, the Interim Forensic Audit Report was initially submitted on 02.04.2024 and thereafter, the same was substituted by a Final Forensic Audit Report dated 24.04.2024. The proceedings of the said Company Petition was taken up before the learned NCLT, Kochi Bench on 27.05.2024, and in an order passed by the learned Adjudicating Authority, the Interim Audit Report, as well as the Final Report, submitted by the auditors were taken on record and a weeks’ time was granted to the appellant to file the objection to it. The said order of 27.05.2024, has made it clear that if the Appellant does not file any objection against the Forensic Audit Report within the aforesaid time period as indicated in the order of 27.05.2024, he would be precluded to file any objection further and the matter would be considered and proceeded with finally, since the Company Petition itself was pending consideration since 2020.
This order of 27.05.2024 stipulating the time limit to file objection to the Forensic Audit Report has attained finality, because that has not been put to the challenge by the Appellant any stage. The Appellant in the Interlocutory Applications IA 64/KOB/2024 in which the Impugned Order came to be passed has prayed for two-fold reliefs :-
Direction to the Forensic Auditor to forthwith supply copies of all the documents and records already received or obtained from all the members of the Audit Committee to him.
The other direction that was sought was to stay the audit process which was being taken up.
The said IA as preferred by the Appellant was dismissed as infructuous observing thereof that the Final Forensic Audit Reports has already been submitted on 24.04.2024 and the copy of the same has been served to the parties, including the Appellant. Further an application by the Appellant, a copy of Interim Audit Report was served upon the Appellant on 27.05.2024 with a stipulation to file objections if any within a week. The objections to the findings in Forensic Audit Report, if any ought to have been filed by the Appellant within the time period which was granted by the Order of 27.05.2024 i.e, within a weeks’ time. However, the Appellant contends that the consequential effect of passing of the Impugned Order dated 02.05.2024, would be that the Appellant is deprived of his right to file an objection to the Final Forensic Auditors Report as he was not given copy of Interim Forensic Audit Report and when he was provided with the same, he was called upon to file his objections within one week by an order of 27.05.2024 which is too short a timeframe. There are various contentions and rival contentions which had been raised by the Learned Counsel for the parties, particularly from the Appellants counsel, in the matter for extension of the time period, required to be granted to the Appellant for the purpose of filing the objections to the Final Forensic Auditors Report dated 24.04.2024.
It was emphasized by the Learned Senior Counsel for the Respondent, that the time period which has been granted on 27.05.2024, ought not to be extended, as it has been earlier granted by the order under challenge, that is, the Impugned Order dated 02.05.2024, because, of the fact that the Order of 27.05.2024 itself has observed that in case the objection is not filed within the given time therein, the matter would be proceeded finally, Further, it has been argued by the learned counsel for the Respondent, that since the CP itself is pending since 2020, the same ought be directed to be considered by the Adjudicating Authority, expeditiously for final adjudication on merits.
At this stage, we are of opinion that so far as the veracity of the Interim Forensic Audit Report, which had ultimately culminated into the Final Forensic Audit Report order of 24.04.2024 is concerned, it is not required to be judicially addressed by this Appellate Tribunal on merits at this stage, because that would still be a subject matter, open to be decided by the Adjudicating Authority an merits in the pending CP before it.
But then, in order to balance the equities and particularly in order to provide sufficient time period for the Appellant to file their objections against the Interim and Final Forensic Auditors Reports, we are of the view that the embargo which was imposed upon in the order dated 27.05.2024, pertaining to the time period prescribed for filing an objection requires consideration and that, in order to meet the ends of Justice, the same is required to be reasonably extended, to which the Respondents’ counsel has agreed and stated that in the case this Appellate Tribunal grants further two weeks’ time, to the Appellant to file their objection to the Interim, as well as, the Final Forensic Auditors Report, he may not have any quarrel as such against it, but the only precaution which he wanted to be imposed by this Tribunal is that no further extension beyond the period as it has been granted by the Tribunal, for two weeks from today, would be granted or extended in any manner whatsoever and for any reasons. Thus, owing to the generosity expressed by the Learned Counsel of the Respondent and also because we are also in view that since the lis has to be adjudicated on merits and particularly when the Interim Forensic Audit Report and the Final Forensic Audit Report filed by the Forensic Auditors will have a direct bearing on the merits of the Company Petition, the period for filing objections to such reports by the Appellant, as granted by the Order of 27.05.2024 deserves to be extended by two weeks. Hence, this Appeal is closed subject to the conditions as below:-
The Appellant would ensure to file objections if any against the Interim Forensic Audit Report and Final Forensic Audit Report submitted by the Forensic Auditors, within the period of two weeks from today.
It is made clear that henceforth after the expiry of the aforesaid two weeks period as granted by the observations made in clause 1, no further extension would be granted in any manner whatsoever.
Since the Company Petition is pending consideration since 2020, it goes without saying that the National Company Law Tribunal, is requested to decide the matter as expeditious as possible.
Subject to the above observations and exceptions, this appeal would stand closed.