Tp Anilkumar vs Indus Motor Company Private Limited

NATIONAL COMPANY LAW APPELLATE TRIBUNAL AT CHENNAI (APPELLATE JURISDICTION) Company Appeal (AT) (CH) No.27/2024 (IA Nos.477 & 478/2024) In the matter of: TP Anilkumar & Ors. ...Appellants V Indus Motor Company Private Limited & Ors. ...Respondents Present : For Appellants : Mr. P.H. Arvindh Pandian, Senior Advocate For Mr. Tejas Karia, Ms. Medha Sachdev, Ms. Simran Malhotra, Mr. Avinash and Ms. Amoolya V, Advocates For Respondent : Mr. Santhosh Mathew, Senior Advocate For Mr. Alishan Naqvee, Ms. Rupal Bhatia and Mr. Iman Naqvi, Advocates WITH Company Appeal (AT) (CH) No.28/2024 (IA No.479/2024) In the matter of: TP Ajithkumar & Ors. ...Appellants V Indus Motor Company Private Limited & Ors. ...Respondents Present : For Appellants : Mr. P.H. Arvindh Pandian, Senior Advocate For Mr. Tejas Karia, Ms. Medha Sachdev, Ms. Simran Malhotra, Mr. Avinash and Ms. Amoolya V, Advocates For Respondent : Mr. Santhosh Mathew, Senior Advocate For Mr. Alishan Naqvee, Ms. Rupal Bhatia and Mr. Iman Naqvi, Advocates

Comp. App. (AT) (CH) Nos.27 & 28/2024 Page 1 of 7 ORDER

(Hybrid Mode)

06.06.2024:

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withdrawn, and accordingly, the same is dismissed as withdrawn.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

Comp. App. (AT) (CH) Nos.27 & 28/2024 Page 2 of 7 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 :-

(i) 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.

(ii) 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

Comp. App. (AT) (CH) Nos.27 & 28/2024 Page 3 of 7 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

Comp. App. (AT) (CH) Nos.27 & 28/2024 Page 4 of 7 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

Comp. App. (AT) (CH) Nos.27 & 28/2024 Page 5 of 7 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:-

1. 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.

2. 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.

3. 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.

Comp. App. (AT) (CH) Nos.27 & 28/2024 Page 6 of 7

4. Subject to the above observations and exceptions, this appeal

would stand closed.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical) VG/TM

Comp. App. (AT) (CH) Nos.27 & 28/2024 Page 7 of 7