M/S Singhal Matta & Co. Chartered ... vs Track Infoline Private Limited

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI COMPANY APPEAL (AT) NO.214/2025 & IA No.5377 of 2025 In the matter of: Singhal Matta & Co (Chartered Accountant) Appellant Vs Track Infoline Pvt Ltd & Ors Respondent For Appellant: Mr Dilip Kumar Niranjan, Advocate. For Respondent: Mr. Abhijeet Sinha, Sr Advocate, Mr Awnish Kumar, Ms Pooja Sahu, Advocates. ORDER

HYBRID MODE 02.12.2025: I.A. No.5374/2025: This is an application filed by the appellant

seeking exemption from filing the certified copy of the order dated 09.05.2025

alongwith the appeal. The reasons for non-filing the certified copy of the

impugned order are given in the application. Considering the submissions made

by the learned counsel for the appellant, the IA No.5374/2025 is allowed subject

to filing of certified copy of impugned order within two weeks from today. IA

No.5374/2025 is disposed of.

2. IA No.5375/2025 : This application is filed by the applicant under Rule

11 of NCLAT Rules, 2016 seeking exemption from filing certified copies and typed

copies of annexures and allow filing of dim copies in the appeal. Considering the 2

submissions made by the learned counsel for the appellant IA is allowed subject

to filing of legible copies within two weeks from today. IA No.5375/2025 is

disposed of.

3. IA No.5377/2025: This application is filed by the appellant for

condonation of delay of three days in filing the appeal. The submission of the

learned counsel of the appellant are the father of the appellant was suffering

from cancer and was not well hence three days' delay in filing the appeal had

occurred. The appellant has annexed the medical documents of his father. We

have also heard the learned counsel for the Respondent. Considering the

submission, the delay stands condoned. IA No.5377/2025 is disposed.

Company Appeal (AT) No.214/2025

4. The present appeal has been filed against an impugned order dated

09.05.2025 passed by the Ld. NCLT, New Delhi whereby the Ld. NCLT has

removed the appellant as an auditor of Respondent No.1 company. The reasons

for removing the appellant are given in paras 28 to 34 of the impugned order

which is as under: -

28. Considerable emphasis was made on the fact that the Registered office of the company was originally in F-81, East of Kailash, New Delhi110065, in the residential premises of Mr. S.C. Matta, Mrs. Radhika Matta and Mr. Puneet Matta, all of them constituting a family and partner in M/s Singhal Matta & Co., the Auditor of the company and the Respondent No. 5 herein

29. This issue was specifically raised in the Petition and was one of the grounds to show that the Auditors were not acting independently and were involved in the mismanagement of the company with the RG Group. Taking note of this allegation and 3

realising that the same confirms the case of the Petitioner. The Respondent No. 1 Company has passed a Resolution on 31.05.2022, soon after passing of the Order by this Hon'ble Tribunal on 25.05.2022, seeking to change the registered office of the company from F-81, East of Kailash, New Delhi110065 to Unit No. 114, 1st Floor, Squire One Mall, District Centre, Saket, New Delhi, being a premises said to have been taken on rent/lease. It was also contended that the said premises are adjacent to M/s. Tricity Technologies Pvt. Ltd., which has its registered office at Unit No. 112-113, 1st Floor, Squire One Mall, District Centre, Saket, New Delhi.

30. The management of the company has been making false statements from time to time and particularly when furnishing copies of the extracts of the Board Resolutions on the letterhead of the company where deliberate and specific averments were made to the contrary as mentioned in the extract of the meeting held on 05.07.2022. The relevant extracts are mentioned below:

"Extract taken from the meeting of Board of Directors of RT GLOBAL INFOSOLUTIONS PRIVATE LIMITED held on Monday 5th July 2022 at its registered office Plot No. 16, IT Park, Chandigarh, 1601001 at 3:00 PM"

From the record it is found that M/s. Singhal Matta & Co has provided other services apart from Auditing, to the company which is in complete violation of Section 144 of the Companies Act, 2013. The Audited Balance Sheet along with AOC-4 for the period 2016-2017 and 2017-2018 already marked as ANNEXURE-R/13 at page No.341 to 367 in the Rejoinder to the Reply of Respondent No.2 and 3 to the Petition.

31. In support of the aforesaid contentions the Balance Sheets giving details of the payment for the respective years were highlighted as under :

4 5 32.Section 144 -Auditor not to render certain services.

An auditor appointed under this Act shall provide to the company only such other services as are approved by the Board of Directors or the audit committee, as the case may be, but which shall not include any of the following services (whether such services are rendered directly or indirectly to the company), or its holding company or subsidiary company, namely:--

(a) accounting and book keeping services;

(b) internal audit;

(c) design and implementation of any financial information system;

(d) actuarial services;

(e) investment advisory services;

(f) investment banking services;

(g) rendering of outsourced financial services;

(h) management services; and

(i) any other kind of services as may be prescribed:

Provided that an auditor or audit firm who or which has been performing any non-audit services on or before the commencement of this Act shall comply with the provisions of this section before the closure of the first financial year after the date of such commencement.

It was argued by the Petitioner that Penal consequences would also arise in terms of Sections 141 and 147.

33. The Counsel for the Petitioner further pointed out that with the sole purpose of attempting to cover up the serious default and the fraud, the Balance Sheets for the year 2018 - 2019, 2019-2020 and subsequent years were tampered and changed to show that the total audit amount that was being paid was Rs.2,00,000/-. Only to cover up the fraud the Certificate have been issued dated 25.10.2022 by the Director, seeking to clarify that the payment to Company Law matters were for filing of ROC Returns, and the fees for management services were specifically deleted. There is no mention of payment for the Management Services in the Certificate and it is mentioned specifically, that the payment of Rs. 25,000/- was towards, fees of tax audit, ITR filing, services tax/GST Returns/TDS 6

Returns filing. The Certificate dated 25.10.2022, at Page No.191 of Additional documents filed by Respondent No.5 on 19.09.2024, subsequent to the arguments having been advanced, clearly demonstrates that the Auditor acts on specific instructions of the Company.

34.Summing up the argument on the subject the counsel of the Petitioner submitted that from the aforesaid act, it is apparent that the Auditor is liable to be held guilty of tampering of the records, getting illegal remuneration for work which are prohibited and is guilty of furnishing a certificate at the behest of the Company and in total contradiction and variance of the audited Balance Sheets.

5. Admittedly on record there are Balance Sheets of 2016-2017 and 2017-

18, at Pages No. 786 and 899 of the Appeal Paper Book, duly audited and signed

by the appellant and it depicts the appellant had charged management fees

during those years. Further the order shows even in later years such fee was

charged, thus in violation of sub-section (h) Section 144 of the Companies Act,

2013.

6. We have also been taken to the record annexed. Considering the above, we

do not find any error in the impugned order and thus we are not inclined to issue

notice. The appeal is accordingly dismissed.

7. Pending application viz I.A. No. 5376/2025 and 5333/2025, are also

disposed of.

(Justice Yogesh Khanna) Member (Judicial)

(Mr. Ajai Das Mehrotra) Member (Technical) Bm/rr