2017 (8) TMI 759

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tory Auditor contains material which tantamounts to personal vilification and character assassination and has little relevance to the financial statements of the company as prepared by him. A portion of the said report, more specifically at no. 20 to the Notes of Account as reproduced below is being objected to: " (a) Consequent on conviction of Ms. Punita Khatter, the then Managing Director of the Company by a Hong Kong court in a shoplifting case in 2013, serious trust deficit developed between the Chairperson, majority shareholders and her. In 2014-2015 Ms. Khatter who also holds 35% equity shares in the company served legal notices making inter-alia frivolous, unwarranted & fabricated allegations, claims and demands, which were strong....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ately after issue of a restraint order by the Hon'ble High Court on 05.02.16, to her known persons with a view to siphon the moneys for her personal benefits." 2. The said auditor's report is required to be adopted in toto in the Director's report. It is the grievance of the applicant that once the same is done and uploaded, it shall cause a great prejudice by way of defamation. In view of the same it is prayed that the AGM which is fixed for Sunday, 16th July, 2017 be deferred till the defamatory/incorrect material/ statements made therein are removed. 3. Ld. Counsels appearing on behalf of the Respondents have vehemently opposed the same. It is submitted that as per a catena of judgments, an AGM so fixed cannot be restrained....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....uld fall within the purview of a Chartered Accountant to be mentioned in the Audit report. 8. Ld. Counsels for the Respondents today admit that the said statements were provided to the auditor to enable him to give a true and correct picture of the affairs of the Respondent Company. In support of his arguments, Mr. Khanna, Ld. Counsel for the Respondent Company has relied upon a decision of the Apex Court in the matter of Life Insurance Corpn. of India v. Escorts Ltd. (1986) 1 SCC 264, to fortify his arguments that every shareholder has a right to call an extraordinary general meeting and he cannot be restrained from making disclosures. It is emphasised that it is a duty cast on the management to disclose; in the explanatory note all mater....