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of <h1>Auditor independence breach and participation in corporate management justifies removal u/s144(1)(h) over 2016-18 fee receipts; appeal dismissed</h1> Whether the auditor should be removed for lack of independence and participation in corporate mismanagement: the tribunal found audited balance sheets for ... Removal of appellant as an auditor of Respondent No.1 company by NCLT - Auditors were not acting independently and were involved in the mismanagement of the company with the RG Group - HELD THAT:- Admittedly on record there are Balance Sheets of 2016-2017 and 2017- 18, at Pages No. 786 and 899 of the Appeal Paper Book, duly audited and signed by the appellant and it depicts the appellant had charged management fees during those years. Further the order shows even in later years such fee was charged, thus in violation of sub-section (h) Section 144 of the Companies Act, 2013. There are no error in the impugned order and thus NCLAT is not inclined to issue notice - appeal dismissed. Issues: Whether the impugned NCLT order dated 09.05.2025 removing the appellant firm as auditor of the company should be set aside.Analysis: The Tribunal examined the grounds on which the NCLT removed the auditor, focusing on alleged lack of auditor independence and rendering of prohibited non-audit services as reflected in audited balance sheets for 2016-17 and 2017-18 and subsequent years. The Tribunal considered Section 144 of the Companies Act, 2013 which prohibits auditors from rendering certain services (including management services and accounting/book-keeping) and noted the record showing the appellant charged management/other fees in the relevant years. The Tribunal also had before it documentary material alleged to show tampering and certificates purportedly issued to explain or alter disclosures. Procedural applications (exemption from filing certified copy, exemption for annexures, and condonation of delay) were dealt with: exemptions were allowed subject to filing legible/certified copies within the prescribed time and the three-day delay in filing the appeal was condoned on the stated medical grounds.Conclusion: The appeal challenging the removal of the appellant as auditor is dismissed; the NCLT order removing the auditor is upheld and the dismissal is against the appellant (i.e., in favour of the Respondent).
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