TaxTMI 
TaxTMI 
2019 (10) TMI 1329
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....icant-Petitioner under the provisions of First Proviso to Section 140(5) of the Companies Act, 2013, for the appointment of Mukund M. Chitale& Co., as Statutory Auditor for IL&FS Financial Services Ltd (IFIN), for the Financial Year 2018-19 onwards. The applicant further contends that the subject matter of this application is within the jurisdiction of this Tribunal. The applicant contends that some of the Respondents in Company Petition No.2062/2019 filed MA 2258/2019, 2268/2019 and 2270/2019 before this Tribunal, challenging the maintainability of the Applicant-Petitioner's Company Petition No.2062/2019. After hearing the applications at length, this Tribunal was pleased to uphold the maintainability of the Company Petition No.2062/2019, vide its order dated 9.8.2019. The applicant further contends that Respondent No.3, 4 and 1 in Company Petition No.2062/2019 have challenged the order above dated 9.8.2019 before the Hon'ble NCLAT, vide Company Appeal Nos.222/2019, 223/2019 and 224/2019, where the Hon'ble NCLAT while issuing a notice in the said appeals, passed the following order on 20.8.2019: "During the pendency of these appeals, National Company Law....
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....nies Act) at Greater Mumbai qua the Respondents Direct the Hon'ble NCLT to permit Petitioner No. 1 to appoint an auditor for IL&FS Financial Services Ltd in terms of the first proviso to Section 140(5). The applicant further contends that after hearing the SLP, the Hon'ble Supreme Court, vide order dated 26.9.2019, has interalia, directed: "Mr. Mehta, learned Solicitor General submitted that after the resignation of the original writ petitioners, the Company had passed a resolution on 11.07.2019 appointing M/s. Mukund M. Chitale& Co., Chartered Accountants as Statutory Auditors of the Company, to fill the resultant vacancy but said M/s. Mukund M. Chitale& Co., Chartered Accountants have expressed their inability to take up the assignment which would in turn mean that fresh appointment is required to be made to fill up the vacancy. We see no reason why steps in that behalf could not be undertaken with promptitude so that the interest of the company is not prejudiced on any count. Learned Solicitor General submits that appropriate application shall be moved before the NCLT. We grant liberty for moving such an application. If such an appl....
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....2019, the EGM was conducted wherein the resolution appointing MMC was passed. After that, MMC, vide its letter dated 17.7.2019, sought a no-objection from R2 for MMC accepting the appointment as IFIN's Statutory Auditor. R2, vide its letter dated 24.7.2019 informed MMC that it did not have any objection, professional or otherwise, to MMC accepting its appointment as IFIN's Statutory Auditor. The Respondent further submits that the Petitioner had not disclosed the above facts in any of its filings before this Tribunal. The Respondent further submits that entertaining and considering the present MA No.3254/2019 would necessarily entail a finding against R2 and R5 as envisaged under Section 140(5) of the Companies Act, 2013. Heard the argument of the Ld. Counsel for the parties and perused the record. The Ld. Counsel for the Respondent has emphasised mainly that by passing an order in MA 3254/2019, would necessarily entail a finding against R2 and R5 as envisaged under Section 140(5). It is further contended by the Respondent that this would constitute a breach and violation of the injunctive directions in the BHC interim order passed by Hon'ble High Court in Writ Pe....
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....is as under: "Mr. Mehta, learned Solicitor General submitted that after the resignation of the original writ petitioners, the Company had passed a resolution on 11.07.2019 appointing M/s. Mukund M. Chitale & Co., Chartered Accountants as Statutory Auditors of the Company, to fill the resultant vacancy but said M/s. Mukund M. Chitale & Co., Chartered Accountants have expressed their inability to take up the assignment which would in turn mean that fresh appointment is required to be made to fill up the vacancy. We see no reason why steps in that behalf could not be undertaken with promptitude so that the interest of the company is not prejudiced on any court. Learned Solicitor General submits that appropriate application shall be moved before the NCLT. We grant liberty for moving such an application. If such an application is moved, the matter shall be dealt with in accordance with law." On perusal of the above order, it is clear that Hon'ble Supreme Court has considered the resolution of the IFIN dated 11.7.2019 regarding the appointment of M/s. Mukund M. Chitale & co., Chartered Accountants as Statutory Auditors of the Company, to fill the resulta....
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.... initiated action to appoint replacement statutory auditor for IFIN for FY 2019-20 by convening AGM at a very short notice on 11.7.2019. It was also informed that as per provisions of Section 140(5), the Central Govt in MCA may by an order of NCLT, appoint a new statutory auditor." Therefore, the company wrote to Mr. M. M. Juneja, RD (WR) as well as Secretary, MCA that the prayer should be made to NCLT to pass an order authorising Central Govt, MCA to appoint new Statutory Auditor. It is also clear that after the said email correspondence on 21.7.2019 at 9.43 p.m., IFIN wrote a letter to M. M. Chitale & Co, informing that the company inadvertently issued engagement letter of M. M. Chitale & Co instead of suggesting the name of identified firm to MCA for due consideration and after getting decision of NCLT in the ongoing proceedings under Section 140(5) of the Companies Act, 2013. Based on the above, it is clear that IFIN had itself inadvertently initiated the process for appointment of M/s. M. M. Chitale & Co as Statutory Auditor of IFIN under Section 140(5), but later company accepted its fault and requested the Statutory Auditor that inadvertently letter was issued regardin....
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....) of the Companies Act, 2013 and Deloitte Haskins & Sells LLP term has already expired after the FY 2017-18 after completion of the tenure. Thereafter, the vacancy of Statutory Auditor was filled by the company IFIN by appointment of M/s. M. M. Chitale. However, when it came to the knowledge of the company that authority for the appointment of Statutory Auditor under Section 140(5) lies with the Union of India, and it was informed to the Statutory Auditor M.M. Chjitale then Statutory auditor wrote an email to the company dated 21.7.2019 informing that it would be appropriate for the company to obtain appointment letter from MCA for the firm for the FY 2018-19 as per Section 140(5) of the Companies Act, 2013. It is further written by the Statutory Auditor that they will be able to give acceptance of the appointment after compliance with the provisions of the Companies Act, 2013. Resultantly, no statutory auditor is functioning as Statutory Auditor of IFIN. Hon'ble Supreme Court vide its order passed in SLP stated the statement of Mr. Mehta Ld. Solicitor General and given the liberty to Union of India for moving such application before NCLT for filling the resultant vacancy of....
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....ised to appoint or change the Auditor, and the Auditor has shown its inability to take the assignment without sanction of Union of India and the Company can't remain without Statutory Auditor. Thus the appointment of Statutory Auditor made by the company shall be considered as an appointment of Statutory Auditor under first proviso to Section 140(5) of the Companies Act 2013. Let the certified copy of the order may immediately be issued, and order be communicated to the parties. ============= Document 1 18/10/2019 https:/mail.gov.in/wc sticlayout mangen&30.1.2015121607 Subject: Re: RE: Request for appointment of statutory auditors in place of BSR & associates and Deloitte To: Saurabh Chitale [email protected] Ce: Mukund Chitale [email protected], Manmohan Juneja mm [email protected], Sanjay Shorey shorey [email protected] 2nd copy. Date: 07/21/19 09:43 PM From: Bjay [email protected] Thank you very much. We inadvertently issued engagement letter instead of suggesting the name of identified firm to MCA for due consideration after getting decision of NCLT in the ongoing proceeding under a 140(5) of companies act, 2013. Inconvenience ....
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.... the provisions of Companies Act as mentioned love. Document 218/10/2019 Thanks Saurabh Chitale Partner Mukund M. Chitale & Co. https://mail.gov.inviwe static/layout/shel.htm/?lang=en&3.0.1.2.0_15121607 2nd Floor, Kapur House, Paranjape B Scheme Rd No. 1, Next to Vile Parle Mahila Sangh, Mumbai 400 057 Tel: 91-22-2663 3500 ID: 91-22-2663 3506 | Mobile: 91-90210 54640 Email: [email protected] I Website: www.mmchitale.com From: Bijay Kumarsindia.com Sent: 21 July 2019 14:16 To: [email protected] Subject: Fwd: Request for appointment of statutory auditors in place of BSR & associates and Deloitte As per our telecon a little while ago. Bijay Kumar Sent from my iPhone using IBM Verse On 18-Jul-2019, 7:00:04 PM, Bjay [email protected] wrote: From: Bijay [email protected] To: mm [email protected], secy [email protected], shorey [email protected] Cc: Meghana [email protected], Kaushik [email protected], [email protected], [email protected] [email protected], Nand Kishoregifsindia.com, [email protected], [email protected] [email protected], [email protected] Date: 18-Jul-2019, 7:00:04 PM Subject: Request for appointment of statutory audi....