Scope of auditor access to company records upheld where request supported court-directed examination of accounts.

The auditors' request for books of account, vouchers, ledgers, supporting materials and break-up particulars was within the scope of the earlier Division Bench direction to examine the balance-sheet accounts and report on their actual state. Access to those records was necessary to prepare a comprehensive report for disposal of the company petition, and the request did not amount to a prohibited verification of the correctness of the accounts. The subsequent request for time to produce records also indicated that the materials were understood as part of the court-directed exercise. The challenge to the checklist therefore failed as the request was not an unauthorised investigation.

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Issues: Whether the auditors' letter calling for books, accounts, ledgers and supporting records amounted to an impermissible investigation or verification of the correctness of the company's accounts contrary to the earlier Division Bench directions.

Analysis: The earlier direction permitted the chartered accountant to peruse the accounts relating to the balance-sheets for the relevant years and to file a report on the actual state of accounts reflected therein. For that purpose, access to the books of account, vouchers, ledger accounts, supporting materials and break-up particulars was necessary. The checklist sought by the auditor was aimed at enabling a comprehensive report for the disposal of the company petition and was not a verification of correctness in the prohibited sense. The subsequent correspondence of the appellant seeking time to produce the records also showed that the documents were understood as materials to be furnished for the exercise directed by the Court.

Conclusion: The auditors' request was held to be within the scope of the earlier directions and not an unauthorized investigation; the challenge failed.

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