Shrikant Gopilal Rathi vs Nagarjuna Agro Chemicals Pvt. Ltd

(Arising out of the Impugned Order dated 25/04/2023 in C.P. No. 203/241/HDB/2020, passed by the National Company Law Tribunal, Hyderabad Bench, Hyderabad)

In the matter of: Shrikant Gopilal Rathi & 2 Ors. ...Appellants V Nagarjuna Agro Chemicals Pvt. Ltd. & 8 Ors. ...Respondents Present : For Appellants : Mr. P.H. Arvindh Pandian, Sr. Advocate Mr. Nakul Mohta, Advocates. For Respondents : Mr. Srinath Sridevan, Sr. Advocate with Mr. Karthik, and Mr. Atul Madhavan, Advocates.

ORAL ORDER

(Virtual Mode) [Per: Justice Rakesh Kumar Jain, (MJ)]

17/05/2023: This Appeal is directed against the Order dated

25.04.2023 passed by the National Company Law Tribunal, Hyderabad.

2. Shorn of unnecessary details, the Tribunal passed an Order on

05.04.2022 which read as under:

Heard Learned Senior Counsel Shri Arvind Pandian, for all the petitioners. Received case laws. Oral submissions, and filing of documents, case law on behalf of the petitioners is concluded.

Comp. App. (AT) (CH) No. 45/2023 Page 1 of 5 We have also heard Learned Senior Counsel Shri S. Ravi, on behalf of all the respondents in reply. Oral arguments of Respondents concluded.

However, at request opportunity is given to the respondent counsels to file brief note of submissions along with case laws within a week from today.

After making submissions, Learned Senior Counsels appearing for both sides have submitted that both the parties have no objection for appointment of any independent auditor for conducting forensic audit of accounts of the units of the Respondent Company/offices both at Wardha and at Hyderabad, effective from 2014.

Learned Senior Counsel for both sides have also assured the Hon'ble Tribunal that the required financial records, statements, vouchers etc which are in the domain and procession of the respective parties will be placed before the auditor to be appointed by this Tribunal, besides access to all other relevant records. While the Learned Senior Counsel for the petitioner Shri Arvind Pandian stated that the auditor may not be from the state of Telangana or Maharashtra as the parties have units in both these states.

However, Learned Senior Counsel Shri S. Ravi, for respondents however, submitted that in principle they have no objection but any place other than Hyderabad will result in heavy expenditure, difficulties in transporting the records in providing logistic support.

In the light of the same the place from where the auditor is to be appointed, will be considered by the Tribunal by taking the submissions made by both sides.

Both the Learned Senior Counsels further submitted that the auditor to be appointed should

Comp. App. (AT) (CH) No. 45/2023 Page 2 of 5 submit the report within a period of 30 days from the date of the order.

Both the counsels submitted that fee and expenses of the auditor will be borne equally by the parties.

Let the matter be listed after a week for orders on appointment of forensic auditor.

List the matter on 19.04.2022."

3. On 19.04.2022, the Tribunal passed the following Order:

"Ld. Counsel Shri Y. Suryanarayana for the Petitioner, Shri S. Ravi, Ld. Senior Counsel for Respondents present.

In terms of our earlier order dated 05.04.2022, we hereby appoint Mr. Sundaramam of Haribakti & Co, for conducting the forensic audit of the "Nagarjuna Agro Chemicals Pvt Ltd. & 08 Ors." at all its division, as well as head office from 2014 onwards. The applicant as well as the Respondents are directed to place required financial records, statements, vouchers etc. which are required for the audit. The fee and expenditure for conducting the forensic audit shall be borne equally by both the parties. Both parties are at liberty to file memo, if any before this Tribunal by 21.04.2022 pointing out any specific steps to be taken by Forensic Auditor in this regard, so as to enable the Tribunal to consider the same and refer to the Forensic Auditor with suitable directions.

For finalization of terms of reference and scope of work, list the matter on 21.04.2022."

4. In terms of the aforesaid Order dated 19.04.2022, Mr. Sundararaman

of Haribhakti & Co. was appointed to conduct the Forensic Audit. It has

Comp. App. (AT) (CH) No. 45/2023 Page 3 of 5 come on record that the final Report has been prepared by Mr. Mitesh Parekh

of Haribhakti & Co. Chartered Accountant.

5. It is not in dispute that both the parties filed objections to the Draft

Report but no objection is filed to the final Report though time was granted

by the Learned Tribunal for that purpose by the Impugned Order dated

25.04.2023 rather the present Appeal has been filed by the Petitioners in the

main Petition raising the issue of the locus of Mr. Mitesh Parekh to file the

final Report of the Forensic Audit who had not been appointed for this

purpose by the Tribunal vide its Order dated 19.04.2022. Counsel for the

Respondent has though argued that the Appellant is unnecessarily raising

this issue and has referred to some emails but at this stage we are not going

into the merits of the case because the matter is yet to be decided by the

Learned Tribunal, who may take into consideration the objections of the

Appellant raised before this Tribunal by way of this Appeal. Therefore, it

would be just and expedient if a direction is issued to the Tribunal, seized of

the matter, to consider the objections of the Appellant, including the final

Report of the Forensic Audit having been prepared by Mr. Mitesh Parekh

instead of Mr. Sundararaman who was not categorically appointed and also

all the contentions of the Respondents in this regard as it has been argued by

the Respondent that the appointment of Mr. Sundararaman of Haribhakti &

Co. was an employee of that Company and therefore the Report has rightly

Comp. App. (AT) (CH) No. 45/2023 Page 4 of 5 been prepared by Mr. Mitesh Parekh who is also a part of Haribhakti &

Company.

6. Keeping in view, the afore-stated facts and circumstances, the present

Appeal is therefore disposed of with a direction to the Learned Tribunal,

seized of CP No.203/241/HDB/2020, to take into consideration the

objections of the Appellant including the objection to the final Report of

Forensic Audit submitted by Mr. Mitesh Parekh who was not so allegedly

appointed vide Order dated 19.04.2022 as according to the Appellant Mr.

Sundararaman was appointed in his individual capacity though he was

working with M/s. Haribhakti & Co. Chartered Accountants. Needless to

mention that the Learned Tribunal shall also take into consideration the

contentions of the Respondent in this regard while deciding the main

Company Petition.

With these observations, the present Appeal is hereby disposed of.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mrs. Shreesha Merla] Member (Technical) HA / MD / TM

Comp. App. (AT) (CH) No. 45/2023 Page 5 of 5