NATIONAL COMPANY LAW TRIBUNAL

COURT-V, MUMBAI BENCH

237. IA/38/2021 CA/415/2021 CA/144/2022 CA/195/2022 CA/314/2022

CA/275/2022 CA/278/2022 CA/60/2023 CA/61/2023 CA/63/2023

CA/481/2023 CA/41/2024 CP/268(MB)2021

IN THE MATTER OF

Yasmin Mohomedali Karmali

Vs.

Ahmed A Fazelbhoy Private Limited

Section 59, 242(4), 241 (2) & 246 of the Companies Act, 2013

Order Delivered on 04.09.2024

CORAM:

MS. REETA KOHLI MS. MADHU SINHA

MEMBER (J) MEMBER (T)

Appearance through VC/Physical/Hybrid Mode:

For the Petitioner:- Adv. Shyam Kapadia (PH)

For the Applicant in CA/41/2024:- Adv. Amir Arsiwala (PH)

For the Respondent In CP:- Adv. Amir Arsiwala (R3) (PH)

For the Respondent: Adv. Gauraj Shah (R1, R2 and R4) (PH) ________________________________________________________________

ORDER

CA/481/2023:-

1. The present Application has been preferred by the legal heirs of the original

Petitioner seeking various reliefs stated in Para 19 of the CA. During the course of arguments, the Applicant pressed only for relief sought in Para 19.4 which is as

under:-

“This Hon’ble Court be pleased to appoint an independent auditor to audit the books of accounts of the company and take over the audit

functions of the Respondent No. 1 Company”.

2. The Ld. Counsel submitted that neither the Applicant nor Respondent No. 3 has any trust or faith in the conduct of the statutory auditor. He drew the attention to the letter dated 31.05.2021 written by Respondent No. 3 (which is part of the record of main CP and also took the court through the pleaded case of Respondent No. 3) so as to draw support and strength to substantiate her arguments that the statutory auditor who has been there with the Company Respondent No. 1 for more than 40 years has not only been found guilty of misconduct by the Regulatory Authority i.e. ICAI but also RoC/MCA has categorically stated that the statutory auditor has failed to follow Accounting Standards. Thus, the contention of the Applicant is that in view of the fact that two out three directors i.e. the Applicant and also Respondent No. 3 being not satisfied with the professional conduct of statutory auditor, he deserves to be replaced with a new auditor. To substantiate the contention. Ld. Counsel submitted that the statutory auditor not only has misconducted himself but his appointment itself was not made after following the due process which fact also been raised by Respondent No. 3. Therefore, in view of the above-stated, the AGM scheduled to be held on 05.09.2024 for approval of Financial Statements of Company/Respondent No. 1 deserves to be stayed. To justify his locus to make the prayers in the present CA, the Counsel placed reliance on the judgment of the Hon’ble Delhi High Court in Worldwide Agencies (P) Ltd. And Anr. Vs. Margaret T. Desor stating that the legal representatives on the death of a deceased member have to be put on the register of members in the Company and it is a right which has devolved upon L.R through the death of the member whose name is still on the register. Thus on the strength of this judgment, the Applicant/Petitioner is stated to be a shareholder in Respondent No. 1 company to the extent of 27% or 13% if the share of the sister of the Applicant is taken into consideration.

3. On the other hand, the Ld. Counsel for the Respondent No. 2 has vehemently not only contested the relief being sought but also the locus of the Applicant. The case of the Respondent No. 2 is that the Applicant has wrongly claimed herself as a Director which she in fact is not. Her own case of impleadment in CA 507 of 2023 is on the strength of being LR of the Petitioner. Thus, being mere LR of the Petitioner, she cannot be permitted to seek the relief being sought. The Counsel submitted that the Statutory Auditor of the Company has been with the Company for more than 40 years, the Petitioner has regularly been signing the Financial Statements prepared by him till 2015. The Applicant on stepping into the shoes of the Petitioner cannot seek change of the statutory