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TMI Blog2024 (3) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... s are given in the said Rules for exercising of these inherent powers by the Tribunal. The Tribunal has directed conduct of audit through independent Auditor to ascertain the correct facts in the light of allegations and counter allegations by the parties to the dispute in Company Petition filed under Section 241 242 of the Companies Act, 2013, which was being adjudicated upon by them. The issues raised in this appeal were considered by Three Member Bench of this Tribunal in the case of Archer Power System P. Ltd. Vs. Cascade Energy P. Ltd. Ors. [ 2020 (8) TMI 583 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where it was held that We are of the opinion that imposition of forensic audit and calling for the report of forensic audit before the Tribunal is a measure to help the Tribunal to appreciate the issue on the basis of an independent report so as to ensure that the case is processed with due regard to rights and obligations of contesting parties would be in the interest of justice. The Tribunal under Rule 11 of NCLT Rules, 2016 has the inherent powers to cause audit of accounts or to make such orders as may be necessary for meeting the ends of justice and there are no f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Six Only) to the Petitioner based on the findings of the Independent Chartered Accountant. 3. The NCLT Kochi vide impugned order dated 08.06.2022 first held that the Petition is maintainable as the Applicants are holding 19.18% equity shares of the Company and are eligible to file the Petition under Section 241 of the Companies Act, 2013. In the said interim order, NCLT Kochi also ordered investigation of accounts of the Company by appointing an Independent Chartered Accountant to investigate and audit accounts of the Company for the financial years ending on 31.03.2016, 31.03.2017 and 31.03.2018. 4. The operative part of the Impugned Order of the `Tribunal /NCLT Kochi, being para 46 to 49 is reproduced below for ready reference: 46. The above-mentioned situation of treating the amount as `Loan from Directors , which was stated to be an error occurred in the notes to the Balance Sheet that have been signed inadvertently by the Respondent, cannot be considered as a genuine plea as seen from the annexed documents. Therefore, before going to the merits of the contentions raised by both parties, we are of the considered opinion that the prayer (c) to appoint an Independent Chartered A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent Chartered Accountant. Learned Counsel Mr. Sankar P Panicker, appearing for Respondent No. 7 stated that Respondent No. 7 is the old Auditor and is not concerned with the subject matter under consideration. 6. We have considered the submissions made by the Appellants and the Respondents and have perused the record. The matter before NCLT was regarding complaint of `Oppression and Mismanagement of Respondent No. 1 Company Amruthamgamaya Nature Care and Leisure Private Limited. The Petitioners before NCLT (Respondent No. 2 Respondent No. 3 herein) had raised the issue of fabrication of accounts and siphoning off of funds by Respondents No. 2 3 in the Petition before NCLT, who are the present Appellants. The impugned order dated 08.06.2022 is in the nature of an interim order and NCLT had not given any categorical finding to influence the investigation and audit of accounts of the relevant period. The issue for decision before us is whether NCLT is empowered to direct audit and is it required to give a finding of fraud before ordering the audit by independent Auditor. 7. As per Rule 11 of the National Company Law Tribunal Rules, 2016, Tribunal may make such Order as may be necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Tribunal is in consonance with sub-section (4) of section 242 of the Companies Act, 2013, as quoted below: Powers of Tribunal. (1) If, on any application made under section 241, the Tribunal is of the opinion (a) that the company's affairs have been or are being conducted in a manner prejudicial or oppressive to any member or members or prejudicial to public interest or in a manner prejudicial to the interests of the company; and (b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up, the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit. (2) Without prejudice to the generality of the powers under subsection (1), an order under that sub-section may provide for (a) the regulation of conduct of affairs of the company in future; (b) the purchase of shares or interests of any members of the company by other members thereof or by the company; (c) in the case of a purchase of its shares by the company as aforesaid, the consequent reduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er we are of the view that the Tribunal have the power to make interim orders which it think fit for regulating the conduct of the company's affairs. There are allegations of siphoning of funds, breach of agreements and failure to maintain proper books of account thus it was required on the part of the Tribunal to conduct a forensic audit by an independent auditor in order to proceed further with the petition. We are of the opinion that imposition of forensic audit and calling for the report of forensic audit before the Tribunal is a measure to help the Tribunal to appreciate the issue on the basis of an independent report so as to ensure that the case is processed with due regard to rights and obligations of contesting parties would be in the interest of justice. Similarly the status quo as made is only with a view to regulate the conduct of the company's affairs during the pendency of the case so that no contesting party takes an advantage during the period detrimental to the other party. The status quo restored as on April 27, 2017 (date of petition) as directed by the National Company Law Tribunal, Chennai till the matter is under consideration cannot be found faulted w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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