M/S.Bhagyodayam Company Represented ... vs Shri. Babu A Kallivayalil

Company Appeal (AT)(CH) No.900799/2022) (Under Section 421 of the Companies Act, 2013) (Arising out of the 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) In the matter of: M/s. Bhagyodayam Company represented By its Administrator ...Appellant V Shri Babu A Kallivayalil ...Respondent Present: For Appellant : Mr. K.R. Jinan, Administrator (Party in person) Mr. Philip Mathew, Advocate ORDER

(VIRTUAL MODE) 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: -

Company Appeal (AT)(CH) No.900799/2022 Page 1 of 6

"the Auditor has carried out the work for the Years

2014-2015 to 2019-2020 (6 Years) and the present financial

condition and the turnover of the Company, we are of the

considered opinion that an amount of Rs.12,00,000/- (Rupees

Twelve Lakh only) (Rs.2,00,000/- x 6) along with the

applicable Goods and Services Tax (GST) would be the

reasonable amount to be paid by the Applicant herein, as fee

of the Auditor.

and directed the 'Appellant' / 'Applicant' to make the payment of

Rs.12,00,000/- (Rupees Twelve Lakh Only) along with 'Goods and

Services Tax' (GST) to the 'Auditor' (Respondent), and 'produce' the

'proof of payment', therein, within 'One Week' from the date of 'Receipt'

of this 'Order', and that after production of 'proof of payment', the 'Prayer

No.(iii)', regarding the 'Appointment' of 'New Auditor' would be

considered.

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

Company Appeal (AT)(CH) No.900799/2022 Page 2 of 6 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

Company Appeal (AT)(CH) No.900799/2022 Page 3 of 6 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'

Company Appeal (AT)(CH) No.900799/2022 Page 4 of 6 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

Company Appeal (AT)(CH) No.900799/2022 Page 5 of 6 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.

[Justice M. Venugopal] Member (Judicial)

[Naresh Salecha] Member (Technical) ghk/tm

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