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TMI Blog2016 (6) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as original respondent No.3, for a particular auditor, he can be assigned the work for examination of the record of the Company as per the direction No.(h) but in the absence thereof, the matter should be left to the Registrar of the Companies to nominate an auditor for examination of the record of the Company. Petitioners No.1 and 2 and respondent No.3 will be the joint signatories of the bank account of respondent No.1-Company and such shall be required for incurring expenses on behalf of the Company, excluding the routine expenses for payment of salary of the staff and for payment of any statutory dues of the Company. In case of routine expenses such as payment of salary of the staff and statutory dues, signature of any of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n after referred to as the CLB ) whereby the CLB has issued directions and disposed of the company petition. 2. We have heard Mr.Perikal K. Arjun, learned counsel for the appellants and Mr.Vivek Holla, learned counsel appearing for the main contesting party-respondents No.2 and 3 i.e., the original petitioners No.1 and 2 who are appearing on caveat. 3. Learned counsel for the appellants contended that original petitioner No.1 had resigned and thereafter a meeting was held and various decisions were taken including that of permanent directorship and affirmative vote. The allegation of misappropriation of money were not proved before the CLB since the procedure before the CLB is by way of summary procedure. He further contended that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a chartered accountant, such chartered accountant can be entrusted with the audit work. He submitted that the Court may issue appropriate direction to any other authority to give such work of the auditor for examination, but in any case, he should not be the statutory auditor of the Company. 4. Whereas Mr.Vivek Holla, learned counsel appearing through caveat contended that in the operation of the Company, there are certain routine expenses and tax liabilities, namely payment of salary and payment of statutory dues etc., in respect of which if no compliance is made, it would create further complication. He submitted that the original respondent No.3-the appellant herein may not agree to sign the cheque at all for operation of bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for being compelled to sign the resignation and also compelled to sign other resolutions of the Board, including that of permanent directorship and also affirmative vote of respondents No.2 and 3 and t he amendment of articles of association etc. It appears to us that a view taken by the CLB for functioning of the Company under the principles of partnership cannot be said to be unreasonable. Further, the minority has oppressed the majority under one pretext or the other and the CLB has issued consequential direction, which cannot be said to be erroneous or beyond the scope of its power nor it can be said to be perverse exercise of its discretion. At this stage, we may reiterate that the CLB has issued the following directions: (a) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the findings, if any be reported in the auditor s report to the balance sheet. 6. As such, we are not impressed by the submission that the CLB could not have issued directions on the premise that the original petitioners No.1 and 2 were compelled to sign certain resolutions of the Board of Directors. It is true that CLB cannot undertake full-fledged fact finding enquiry as that of a Civil Court. If one is having a majority in the shareholding pattern etc., he would not abandon the right in favour of the minority, nor would he create a situation which would result into putting himself into a minority position. When one is in a majority, he, in normal circumstances, would not agree for the amendment in the Articles/Resolutions for pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners No.1 or 2 may be there but there should be signature of respondent No.3 and in the absence thereof, the operation of the bank account shall not be made for incurring such other expenses. 7. As such, there is no material produced on record to contend that the appellant herein-original respondent No.3 and his group are having no confidence in the statutory auditor. No material is produced to show that the statutory auditor was appointed by the original petitioners No.1 and 2 still act or that the auditor is acting as per the directions of petitioners No.1 and 2. However, at the same time confidence in the enquiry for examination of the record to be made by the Auditor is required. Hence, we find that if there is joint consensu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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