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Judgment
Heard Ms. Asmita Singh, Advocate, for the complainant, Mr. A.D.N. Rao, Sr. Advocate assisted by Mr. Rahul Mishra, Advocate, for opposite party-1 and Dr. K.S. Ravichandran, AR for opposite party-2 &3.
Trinity Arcade Private Limited has filed above complaint for directing S.R. Mohan & Company Chartered Accountants (OP-1) to pay (i) Rs.133993738/- as compensation for the loss suffered due to giving incorrect audit report and negligence in not filing Income tax return on time; (ii) Rs.two crores, as compensation for mental agony and harassment; (iii) litigation costs; and (iv) any other relief, which is deemed fit and proper, in the facts and circumstance of the case.
The complainant stated as follows:
(a) Trinity Arcade Private Limited (for short the company) was a private company, registered under the Companies Act, 1956 and engaged in the business of development, construction and sale of villas and apartments. Initially Board of Director of the company consisted K.J. Kuriakose, Chairman, Roy Joseph, Managing Director, K.J. Paul, Director and M.J. Luiz, Director. After retirement of K.J. Kuriakose on 07.04.2009, C.J. Mathew was appointed as the Chairman on 10.08.2009. S.R. Mohan & Company (OP-1) was a Chartered Accountants Partnership Firm, registered under Partnership Act, 1932 and had a branch office at Kochi. Tinu Anto and K.J. Anto (the auditors) (OP-2 & 3) were partners in Abraham and Jose, who later on became signing partner in S.R. Mohan & Company. K.J. Kuriakose and K.J. Paul were brothers and Tinu Anto was their nephew. Tinu Anto was also relation of M.J. Luiz. Tinu Anto and K.J. Anto are son and father.
(b) Board of Director of the company, in its annual general meetings (for short AGM) dated 30.09.2008, 25.09.2009 and 14.09.2010 appointed OP-1 as statutory auditor as per Section 224 of the Companies Act, 1956, for audit of the accounts for the year 2008-09, 2009-10 and 2010-11, respectively. Tino Anto and K.J. Anto (OP-2 & 3), being local auditors performed all the works of audit on behalf OP-1. The company also availed services of the OPs for filing sales tax and income tax returns during this period. Tino Anto (OP-2), being nephew of K.J. Paul, the director, colluded with and helped him, in misappropriating the fund of the company. The OPs by their act and omission in filing sales tax return and income tax return also caused heavy loss to the company; details of which are as follows:-
(i) The company availed services of the OPs for preparing Audit Report dated 15.12.2008 in Form No.13 and 13A of Kerala Value Added Tax Rules, 2005 and for filing periodical return. In the audit report, the OPs wrongly shown the figure of ‘balance cost of the work contract’ as Rs.724715473.39 in place of correct figure of Rs.236508013/-. This mistake resulted into huge liability of VAT and interest of Rs.129200000/- in Sales Tax Assessment orders dated 02.11.2009, 05.12.2009 and 05.12.2009. The company challenged the assessment order. Finally Kerala High Court ordered for payment of 25% of tax and interest as assessed. The company had to pay Rs.30679510/-. This act of the OPs not only caused huge financial burden upon the company but also damaged reputation of the company.
(ii) K.J. Paul diverted more than Rs.18/- crores from account of the company in his personal account i.e. “K.J. Paul Ledger Account” during 01.04.2005 to 31.03.2009 through transfer of fund. This amount was transferred in the guise to purchase land for the company but K.J. Paul acquired the land in his name from this amount. Tino Anto (OP-2) opened a second ledger in the name of “K.J. Paul Land Purchase A/c” in connivance K.J. Paul and made an adjustment entry of Rs.56000000/- on 31.03.2007 to wipe out debit balance. He further showed a credit entry of Rs.31250000/- dated 31.03.2009 transferring from the regular ledger account of K.J. Paul. To cover the amount misappropriated by K.J. Paul, the company had to borrow huge amount, on which the company paid Rs.20609140.64 towards interest on the loan.
(iii) The OPs started audit of the accounts for the financial year ending on 31.03.2010 right earnest in July, 2010 and completed till August, 2010. On 06.09.2010, Tino Anto (OP-2) came to the office of the company and handed over copies of Profit and Loss Account, Balance sheets, Statement of Adjusted Income and computation of Income tax payable for the year ending on 31.03.2010 etc. Board of Directors adopted these audited financial statement and called for an AGM on 30.09.2010 for approval of the audit. All the necessary documents for filing income tax return along with an amount of Rs.5411750/- of income tax were handed over to the OPs on 29.09.2010 for filing income tax return. Last date of filing the return was 15.10.2010 but the OPs neither submitted the return till 15.10.2010 nor informed to the company in this respect till last date. Due to not filing income tax return till 15.10.2010, Income Tax Officer did not grant the income tax exemption under Section 80-1B of Income Tax Act, 1961. The company could not avail credit of Minimum Alternate Tax of Rs.4873259/-, already paid for the relevant assessment year and also had to pay additional demand of Rs.6582850/-, causing total loss of Rs.11456109/-.
(c) Although audit was completed in August, 2010 but the OPs did not submit ‘Audit Report’ deliberately in order to conceal their misdeeds till their fresh appointment in AGM dated 14.09.2010. Tinu Anto (OP-2) handed over a hand written notes, on 06.09.2010, listing out certain items of work to be completed, wherein first item was “labour bills” for an amount of Rs.31250000/-. By this note, Tinu Anto (OP-2) attempted to trap the other directors of the company for fabricating record but he could not succeed. K.J. Paul gave a letter dated 29.09.2010, making false allegations against the company and its other directors, alleging misappropriation of Rs.4.5 crores of the fund of the company after March, 2010. K.J. Paul also filed a complaint in this respect before the Registrar of Company and Company Law Board, Chennai. Chairman of the company, immediately called Tinu Anto (OP-2) on telephone on 29.09.2010 and asked him to furnish Audit Report as AGM was scheduled for 30.09.2010 but he did not submit Audit Report and AGM was postponed for 20.11.2010. Chairman again wrote a letter dated 29.10.2010 to the OPs, requesting to furnish Audit Report.
(d) OP-1 wrote a letter dated 25.10.2010 to the company (received on 27.10.2010) attaching a copy of the letter dated 06.09.2010, allegedly handed over by OP-2 to the Chairman. By this letter OP-1 gave explanation for not filing income tax return till 15.10.2010 as various queries made by OP-2 and 3 were not answered by the company before due date. Alleged letter dated 06.09.2010 was never handed over by OP-2 & 3 to the company. By fabricating letter dated 06.09.2010, the OPs invented false excuse for not filing income tax return till due date. The queries raised in the letter dated 06.09.2010 were already clarified during audit. If the letter dated 06.09.2010 was given to the company then a reminder ought to have been given before 30.09.2010 or 15.10.2010 and not after expiry of the date for filing Income tax return.
(e) Sensing collusion between K.J. Paul and OP-2 & 3, the company, vide letter dated 29.10.2010, advised the OPs to resign from the auditor ship of the company but they did not tender resignation. The company filed a complaint dated 17.01.2012 before Regional Director, Ministry of Corporate Affair, seeking removal of the OPs from Auditor ship of the company. The company also filed a complaint before Institute of Chartered Accountants of India for disciplinary action against OP-2 & 3 for committing professional misconduct. In retaliation of it, OP-2 filed a criminal complaint against the existing directors of the company.
(f) After receiving the letter from K.J. Paul dated 29.09.2010 Chairman wrote a letter dated 21.10.2010 to Chief Manager, State Bank of Travancore, Edappally for apprising with the name of the person, who had affected fund transfer from the account of the company. The Chief Manager, vide letter dated 26.10.2010, informed, the company issued a bearer cheque of Rs.22000000/- dated 27.03.2010, on which, Rs.8000000/- was paid in cash, Rs.6000000/- was credited to the account of K.J. Paul and Rs.8000000/- was credited to the account of M/s. Sanathan Infrastructure & Developers Pvt.Ltd. On the basis of bearer cheque No.132476, Rs.2500000/- was en-cashed on 29.09.2009 and on withdrawal, Rs.1500000/- was en-cashed on 07.10.2009. Then this complaint was filed on 09.08.2012, alleging deficiency in service.
S.R. Mohan & Company (OP-1) filed its written reply on 15.05.2013 and stated that Tinu Anto and K.J. Anto, who were partners of the firm Abraham & Jose, had acted as chartered accountants for the company prior to joining the firm of OP-1. Tinu Anto, K.J. Anto and K.L. George were admitted as partners in OP-1 on 01.09.2008, with shares of 12%, 13% and 5% respectively. Under clause 7 of the partnership deed dated 01.09.2008, they were provided remuneration of Rs.10000/-, Rs.15000/- and Rs.5000/- per month respectively. Tinu Anto resigned from the firm on 31.12.2011 and then partnership was reconstituted on 01.01.2012, with 17% share of K.J. Anto and 6% share of K.L. George and their remuneration was enhanced to Rs.50000/- and Rs.25000/- per month respectively. K.J. Anto also resigned from the firm on 31.12.2012. Tinu Anto and K.J. Anto, being chartered accountant had authority of audit the accounts and costing in accordance with law. If they had committed any misconduct, then they are individually liable for it. Profession of chartered accountancy is regulated by Chartered Accountant Act, 1949. As per provisions of Schedule II of the Act, professional misconduct or negligence can be attributed to the person who conducted audit and not to the firm. OP-1 was engaged for audit of the books of account of the company, prepared and maintained by its regular accountant and not for carrying out tax audit or filing returns of sales tax and income tax. In the complaint, all the allegations have been made against Tinu Anto (OP-2) in helping his relative K.J. Paul, in misappropriation of the fund of the company, which were his individual acts as such he is alone liable for his acts. Initially the company issued “no dues certificate” to K.J. Paul and permitted him to go out from the company, later on, settled its dispute with K.J. Paul therefore the amount embezzled by him cannot be recovered from the OPs. As per own allegation, embezzlement were done during 01.04.2005 to 31.03.2009, while OP1 was engaged for audit on 30.09.2008. As the company did not give clarification of the queries made by the auditors as such audit report could not be submitted before 30.09.2010. Allegation of fraud and misappropriation of fund have been made in the complaint, which cannot be adjudicated in summary jurisdiction of this Commission and the complaint is liable to be dismissed. The complaint is barred by limitation as provided under Section 24-A of the Consumer Protection Act, 1986.
Tinu Anto and K.J. Anto (OP-2 & 3) filed their joint written reply on 03.05.2013 and stated they were earlier partners in Abraham and Jose. Later on they quit that firm and joined S.R. Mohan and Company Chartered Accountant (OP-1) on 01.09.2008. The company appointed S.R. Mohan and Company as a ‘statutory auditor’ in its AGM dated 30.09.2008, 25.09.2009 and 14.09.2010 as per Section 224 of the Companies Act, 1956, for audit of the accounts for the year 2008-09, 2009-10 and 2010-11, respectively. They issued tax audit report under KVAT for the financial year 2007-08 and submitted income tax return for the financial year 2008-09, under the Income Tax Act, 1961. Apart from above assignment, the OPs did not provide any other service to the company. They denied that OP-2 helped K.J. Paul in diverting the fund of the company. The company be put on strict proof to prove that Mr. K.J. Paul diverted more than Rs.18/- crores of the company during 01.04.2005 to 31.03.2009 and without proving this fact, allegations against OP-2 have no substance. The company settled its dispute with K.J. Paul through settlement agreement dated 12.11.2010 and concealing this fact, the complaint has been filed against the OPs for recovery of the amount with interest, allegedly diverted by K.J. Paul. The transactions done by K.J. Paul, were duly reflected in the financial statements of the company for number of year and audited financial statements were approved by Board of Directors of the company, it was highly improbable for the auditor to infer/imagine any fraud or diversion of the fund. If the directors, who met daily and operated bank accounts, handled cash, receipts and payments and all transactions necessary for discharging function of the company, did not raise any doubt, it was not possible for the auditor to raise any doubt in respect of entries in the account books. The company paid interest of more than Rs.2/- crores since its inception and it is not proved that the company had taken loan due to diversion of the fund. Form No.13A of Kerala Value Added Tax Rules, 2005, clearly states that there is a separate form for work contract. Due to mistake at Serial No. 13, relating to ‘balance cost of work contract’ wrong figure was mentioned in the audit report dated 15.12.2008. As soon as this mistake was noticed, they submitted a revised report dated 18.01.2009, correcting the mistake. From the assessment order dated 02.11.2009, it is proved that the company had not filed quarterly VAT returns for those period. Annual VAT return was filed on 29.09.2009. For the reason best known to the officers of the company, revised report dated 18.01.2009 was not given. Deputy Commissioner, Commercial Tax assessed the tax liability “on best of judgment” basis due to not filing quarterly returns and not giving revised report. Alleged embezzlement being prior to 31.03.2009 and liability of VAT was assessed on 02.11.2009, the complaint in this respect is barred by limitation as provided under Section 24-A of the Consumer Protection Act, 1986. The directors allegedly suspected misappropriation of fund by K.J. Paul only in October, 2010. The company sent letter dated 21.10.2010 to its banks to know the name of persons, who had withdrawn money from the account, without issuing any cheque by the company. Handing over alleged hand written note on 06.09.2010 by OP-2 has been denied. The contents of this note do not disclose any connection with the work of statutory audit of the accounts of the company. They denied that they were engaged for filing income tax return and the company had handed over audited financial statement and all the necessary documents for filing Income tax return for the financial year 2009-10 and Rs.5411750/- on 29.09.2010 to OP-2. The OPs through letter dated 06.09.2010, called for various explanations to the queries raised in the letter dated 06.09.2010 for submitting audit report, which were not replied and approved statement of the account were not handed over to them as such audit report was not submitted within time. They had no notice of AGM dated 14.09.2010. Last date for filing Income tax return was 15.10.2010. Had the company handed over audited financial statement and all the necessary documents for filing Income tax return for the financial year 2009-10 and Rs.5411750/- on 29.09.2010 to OP-2 then in all probability, they would have reminded /confirmed it before 15.10.2010 as without signature of appropriate authority of the company, return could not be filed. The company filed income tax return on 03.05.2011. Audit Report of the company is not required for filing income tax return. The company filed a complaint dated 17.01.2012 before Regional Director, Ministry of Corporate Affair, seeking removal of the OPs from auditor ship of the company. On the direction of Regional Director, the company produced approved statement of the account of the company for the financial year ending on 31.03.2010, from where the OPs received its copy. Regional Director dismissed the complaint, vide order dated 23.11.2012 and directed the OPs to submit audit report within a week. Then, they submitted audit report on 06.12.2012. The company also filed a complaint before Institute of Chartered Accountants of India for disciplinary action against the OPs for committing professional misconduct, which has been replied by them. Preliminary issues relating to maintainability of the complaint i.e. (i) the complainant is a company and the OPs are statutory auditor and their services does not fall within the definition of the ‘service’ as defined in the Consumer Protection Act, 1986 and (ii) complicated issues of the facts have been raised in the complaint, which required adducing various documentary and oral evidence and cross-examination of the witness and cannot be decided in summary jurisdiction of this Commission, have been raised.
The complainant filed common Rejoinder Reply, Affidavit of Evidence of C.J. Mathew and documentary evidence. S.R. Mohan & Company filed Affidavit of Evidence of Nalam Ravindranath. OP-2 & 3 filed Affidavit of Evidence of Tinu Anto and documentary evidence. All the parties filed their written synopsis.
We have considered the arguments of the counsel for the parties and examined the record. The OPs raised a preliminary objection relating to maintainability of the complaint on the ground that the OPs are statutory auditors and their services do not fall within the definition of ‘service’. The deficiencies in service as complained in this complaint relate to commercial transaction by the company, which fall within exclusion clause of the word ‘consumer’ as defined under the Consumer Protection Act, 1986, as such, the complaint is not maintainable. The word ‘service’ has been defined under Section 2(1)(o) the Consumer Protection Act, 1986 is quoted below:-
“Section 2(1) (o):- “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;”
The definition of ‘service’ is an inclusive definition and except the service ‘rendered free of charge’ or ‘under a contract of personal service’ all other services fall within this definition. Supreme Court in Indian Medical Association Vs. V.P. Santha, AIR 1986 SC 550 held that the service provided by a doctor and in Nandlal Lohariya Vs. Jagdish Chand Purohit, (2022) 6 SCC 456, held that the service provided by an advocate fall within the definition of the ‘service’ under the Consumer Protection Act, 1986. An Auditor provides its professional service and profession of chartered accountancy is regulated by Chartered Accountant Act, 1949. The Companies Act, 1956 makes it mandatory for the companies to appoint an auditor for audit of its statement of account in every year, which is required to be submitted to the Registrar of the Companies. The Companies Act, 1956 does not confer any statutory status to an auditor, which is otherwise an engagement of professional by the company and paid by the company. Services of the auditor are not availed with motive to generate profit, as such, are not commercial transactions. Supreme Court in National Insurance Company Limited Vs. Harsolia Motors, 2023 SCC OnLine SC 409, held that wide meaning of the words “for any commercial purpose” would mean that the goods purchased or the services availed, should be used in any activity directly intended to generate profit. Insurance services as provided by the insurance companies are not for commercial purpose as the contract of insurance is a contract of indemnity and not for any profit.
Filing of complaint in administrative side before Regional Director for removal of the OPs from auditor ship of the company or a complaint before Institute of Chartered Accountants of India for disciplinary action against the OPs do not bar filing of the complaint for judicial remedy as it is well settled that if an act attract criminal and civil liability then the both the proceeding can go on simultaneously. All the necessary procedure for trial has been provided under the Consumer Protection Act, 1986 and the complaint cannot be thrown only on the ground that complicated issues of the fact is involved as held by Supreme Court in J.J. Merchant (Dr.) Vs. Shrinath Chaturvedi, (2002) 6 SCC 635. As such preliminary objections raised by the OPs have no force.
From receipts (Annexure-C-17) filed by the company, it is proved that the company availed services of Abraham & Jose for audit of its account for the year ended on 31.03.2008 and for filing Income Tax Return for the financial year 2008-09. The company availed services of S.R. Mohan and Company, for audit of its accounts for the year ended on 31.03.2009. K.J. Anto (OP-3) issued a receipt dated 29.09.2009 as professional fee for audit u/s 44AB of Income Tax Act, 1961 and for filing Income Tax Return for the financial year 2009-10. Annexure-C-28 shows that the company availed services of S.R. Mohan and Company, for audit of its accounts for the year ended on 31.03.2010. OP-2 and 3 admit that they prepared the audit report dated 15.12.2008 and filled up Form No.13A of Kerala Value Added Tax Rules, 2005, in which at Serial No. 13, ‘balance cost of work contract’ wrong figure was given and they gave a revised report dated 18.01.2009, correcting the mistake.
The company claims Rs.31250000/-, for loss on account of misappropriation of fund by K.J. Paul, one of its director and Rs.20609119/- on account of interest paid by the company on the loan taken, to cover diversion of above amount. The company stated that K.J. Paul had diverted more than Rs.18/- crores from its account in his personal account i.e. “K.J. Paul Ledger Account” during 01.04.2005 to 31.03.2009 through transfer of fund in the guise to purchase land for the company. But K.J. Paul acquired the land in his name from this amount. Tinu Anto (OP-2) opened a second ledger in the name of “K.J. Paul Land Purchase A/c” in connivance K.J. Paul and made an adjustment entry of Rs.56000000/- on 31.03.2007 to wipe out debit balance. He further showed a credit entry of Rs.31250000/- dated 31.03.2009 transferring from the regular ledger account of K.J. Paul. Abraham & Jose was engaged for audit of the account of the company for the period of 01.04.2007 to 31.03.2008. The company settled its dispute with K.J. Paul through settlement agreement dated 12.11.2010, under which, out of three companies, K.J. Paul surrendered his share in two companies and remaining directors surrendered their share in third company in favour of K.J. Paul. In the settlement deed, there is no allegation relating to diversion of fund by K.J. Paul. If at all, it was K.J. Paul, who had diverted the fund of the company and not the OPs. If some entries were made by Tinu Anto (OP-2), in the ledger of K.J. Paul (Land Purchase), mentioning it as ‘adjusting entry’ or credit entry showing as ‘cheque received from K.J. Paul, without any corresponding entry in the account of the company then on its basis the company or officers are neither misguided nor it helped K.J. Paul in diversion of the fund of the company. K.J. Paul is not impleaded in this complaint. After settlement of dispute with K.J. Paul, who allegedly diverted fund of the company, it is not open for the company claim the amount from the auditors.
The company claimed Rs.30679510/- on account of payment of excessive VAT. In the balance sheet for the year ended on 31.03.2010 (Annexure-C-26), it has been stated that liability of the turnover of the company was Rs.2785559/-, against which the company has paid Rs.6615873/-. Under the interim order of Kerala High Court, the company deposited Rs.6500000/-, as such claim of Rs.30679510/- is not justified. The company has not disclosed about the final order of appellate authority. The company stated that the OPs prepared Audit Report dated 15.12.2008 in Form No.13 and 13A of Kerala Value Added Tax Rules, 2005 and for filing periodical return. In the audit report, the OPs wrongly shown figure of ‘balance cost of the work contract’ as Rs.724715473.39 in place of correct figure of Rs.236508013/-. This mistake resulted into huge liability of VAT and interest in sales tax assessment orders dated 02.11.2009, 05.12.2009 and 05.12.2009. The company challenged the assessment order. Finally Kerala High Court ordered for payment of 25% of tax and interest. The company had to pay Rs.30679510/-. S.R. Mohan and Company (OP-1) has stated its services were not availed for preparation of audit report dated 15.12.2008 in Form No.13 and 13A of Kerala Value Added Tax Rules, 2005. But OP-2 and 3 admit preparation of audit report dated 15.12.2008 and stated that this mistake was corrected by giving a revised report dated 18.01.2009. From the assessment order dated 02.11.2009, it is proved that the company had not filed quarterly VAT returns for those period. Annual VAT return was filed on 29.09.2009. For the reason best known to the officers of the company, revised report dated 18.01.2009 was not given and committed negligence. Deputy Commissioner, assessed the tax liability “on best of judgment” basis due to not filing quarterly returns. VAT was assessed on 02.11.2009 and the complaint filed on 09.08.2012 in this respect is barred by limitation as provided under Section 24-A of the Consumer Protection Act, 1986.
The company claims Rs.11456109/- due to loss of exemption under Section 80 1B of Income Tax Act, 1961, for not filing the Income tax return till due date. S.R. Mohan and Company (OP-1) and OP-2 and 3 have denied availing of their services for filing income tax return. But K.J. Anto (OP-3) has issued a receipt dated 29.09.2009 as professional fee for audit U/S 44AB of Income Tax Act, 1961 and for filing Income Tax Return for the financial year 2009-10. The company has filed Assessment Order dated 28.03.2013, relating to financial year 2009-10, in which, the company claimed deduction of Rs.23426876/- under Chapter VI-A. Although assessing authority has not allowed this deduction on the ground that due date for filing return was 15.10.2010 but the return was filed on 03.05.2011. This deduction was claimed under Section 80 1B(10) of the Income Tax Act, 1961. Under Section 80 1B(10)(a)(iii), this deduction is admissible where a housing project has been approved by the local authority on or after 1st day of April, 2005 and construction was completed within five years from the end of financial year in which the project was approved by the local authority. Certificate of completion issued by the local authority shall be the proof of completion. The company has not filed any completion certificate issue by the local authority, showing that the project was completed on or before 31.03.2010. As such the loss in head cannot be treated as a loss occurred only on the ground of non-filing of Income tax till due date.
The company has denied service of letter of OP-2 dated 06.09.2010, by which, queries have been made for submitting audit report. According to the company OP-2 gave a hand written note on 06.09.2010, listing out certain items of work to be completed, wherein first item was “labour bills” for an amount of Rs.31250000/-. By this note, Tinu Anto (OP-2) attempted to trap the other directors of the company for fabricating record but he could not succeed. OP-2 and 3 have denied giving of hand written notes, on 06.09.2010. But from these allegations, it is proved that OP-2 gave some paper to the company on 06.09.2010. AGM was fixed for 30.09.2010. There is nothing on record to prove that the company made any reminder to the OPs for submitting audit report before 30.09.2010. It is only on 29.10.2010 Chairman wrote a letter to the OPs, requesting to furnish Audit Report i.e. after expiry of due date for filing income tax return. Income tax return is required to be signed by the office of the company. If it was not filed within time then reminder ought to have been given by the company before due date.
K.J. Paul gave a letter dated 29.09.2010, against the company and its other directors, alleging misappropriation of Rs.4.5 crores of the fund of the company after March, 2010. K.J. Paul also filed a complaint in this respect before the Registrar of Company and Company Law Board, Chennai. Sensing collusion between K.J. Paul and OP-2 & 3 who are relations, the company, vide letter dated 29.10.2010, advised the OPs to resign from the auditor ship of the company and filed a complaint dated 17.01.2012 before Regional Director, Ministry of Corporate Affair, seeking removal of the OPs from Auditor ship of the company. In such circumstances, audit report was not submitted on time and submitted on 06.12.2012. Although the company denied service of letter dated 06.09.2010 but admit service of letter dated 25.10.2010 written by OP-1. But the explanations/queries were not answered as such, audit report was delayed. In such circumstances deficiency in service on the part of the OPs alone cannot be attributed.
ORDER
In view of the aforesaid discussions, the complaint has no merit and is dismissed.