ORDER

27.03.2023: Heard Mr. Gaurav Mitra, learned counsel for appellant. The present appeal has been preferred under Section 421 of the Companies Act, 2013 against an interim order dated 25.01.2023 whereby the interim relief prayed by the appellant/applicant in Company Petition No.188/2021 filed under Section 241, 242 and other relevant provision of Companies Act, 2013 was considered and disposed off.

In sum and substance the appellant herein before the NCLT had prayed to stay the affect and implementation of notice dated 02.02.2022 for holding EGM to fill casual vacancies arising from resignation of the statutory auditor of the Company; inspection of records by the Petition and appointment of independent Director as Chairman of the Board. Before proceeding it would be necessary to reproduce the impugned order as follows:-

“1. Mr. Pooja Gore, Ld. Counsel for the Petitioner present. Mr. Anil D. Souza, Ld. Counsel for the Respondent present. pending disposal of Company Petition No. 188/2021 filed u/s 241, 242 & other relevant provision of Companies Act, 2013.

of notice dated 02.02.2022 for holding EGM to fill casual vacancies arising from resignation of the statutory auditor of the Company;

inspection of records by the Petitioner; and appointment of independent Director as Chairman on the Board.

AVS & Company is connected to the previous statutory auditor M/s BB Shah & Company and the appointment of proposed auditor is to create façade only to mislead the proceedings before this Tribunal.

We have considered the contention of the petitioner. We are of the opinion that a Chartered Accountant firm is governed by code of conduct of its professional i.e. ICAI and such code of conduct mandates independence and disclosure of interest by the chartered accountant firm at the time of appointment as well as during the tenure of their office as Auditor. The apprehension is without any basis and is not supported any cogent material placed on record except the relationship of proposed Auditor with the earlier auditor in professional capacity.

Respondent No.2 to continue as whole time Director after having attained the age of 70 years. We direct the Respondent Company to ensure that provisions of Companies Act, 2013 are strictly followed in this relation.

in electronic form. We direct the Respondent Company to ensure that provisions of Companies Act, 2013 are strictly followed in this relation and to allow inspection of records in accordance with section 171 of Companies Act, 2013.

Director as Chairman on the Board. We observed that the Petitioner is a single largest shareholder holding almost 50% paid up capital of Respondent No.1 and is in a position to block passing of special resolution. The allegation and averments are to be considered by this Bench after hearing the main petition. This Bench is of the considered view that no injustice has been caused to the Petitioner as is evident from the averments contained in the present application.

8. In view of the above C.A. 71/2022 is disposed of. List these CA 168/2021 & CA 187/2021 on 26.04.2023.” On examination of the impugned order it is evident that the NCLT has observed that the applicant was holding 50% of the paid up capital of Respondent No.1 and was in a position to stop passing of special resolution. It appears that an apprehension has been raised by the appellant before NCLT regarding the conduct of auditor. Learned counsel for the appellant has drawn our attention to Ground (vi) of the appeal at Page 29 which is as follows:-

“vi. However, while the Appellant’s First Interim Application was still pending, to make the reliefs sought by the Appellant in the Petition and the First Interim Application infructuous and to further perpetrate the illegalities, the Defaulting Respondents clandestinely sought to replace M/s BB Shah & co with another chartered accountant associated with Respondent No.5 as the statutory auditor of the Company. As set out hereinabove, the proposed audi