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2023 (6) TMI 1375 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHIProfessional misconduct by CA - penalty order u/s 132 (4)(c) of the Companies Act, 2013 - submission is that after filing of the Appeal and deposit of 10% of penalty, further proceedings as contemplated in Rule 12 regarding the intimation cannot take place - HELD THAT:- Rule 12, sub-rule (3), uses expression imposition of penalty or debars the Auditors from practices. Sub-rule (3) requires sending of the order to every company or body corporate in which the Auditor is functioning as Auditor. Sub-rule (3) of Rule 12 is, thus, independent provision. Thus, Rule 12, sub-rule (2) provides that action against Auditor in event the Appeal is filed under Rule 12, sub-rule (1), after depositing the 10% penalty amount, the consequences as contemplated under Rule 12, sub-rule (2) shall not take place. Thus, in case when an Appeal is filed with deposit of 10% of penalty, it is not obligatory to the company or body corporate to appoint a new Auditor as required by sub-section (2) of Rule 12. However, sub-rule (1) and (2) are only confine to cases where only monetary penalty has been imposed. These two sub-rules have no application with regard to cases where penalty of ‘debarment’ has been imposed. Omission of ‘debarment’ in sub-rules (1) and (2) are with the purpose and object. The learned Counsel for the Respondent has placed reliance on judgment of Hon’ble Supreme Court in MD. ALAUDDIN KHAN VERSUS KARAM THAMARJIT SINGH [2010 (7) TMI 1006 - SUPREME COURT] where Hon’ble Supreme Court while considering the principle of statutory construction has noted the principle that express inclusion of one thing is the exclusion of all others. The consequence of subrule (4), Rule 12 is that when procedure under Rule 12, sub-rule (2) has been initiated, company or body corporate has to appoint a new Auditor, the clear intendment is that in case of a debarment, the Auditor is not entitled to continue to discharge his functions and a new Auditor as contemplated is to be appointed - Rule 11, sub-rules (6) and (7), which provides that the orders passed under sub-rules (6) and (7) shall not become effective until thirty days have elapsed from the date of issue of the order unless the Division states otherwise in the order along with the reason for the same. Present are cases where the orders were not to become effective until thirty days have elapsed. There is purpose and reason for providing the thirty days period. Thirty days period is provided for Auditors against whom orders have been passed to wound up their affairs in company or body corporate where they have been functioning. Filing of the Appeal by the Appellant(s) with deposit of 10% of the penalty shall have no effect on the order of ‘debarment’ passed against the Appellant(s) under Section 132(4)(c) and under head (B). Order of ‘debarment’ shall continue to operate unless an order is passed by the Appellate Tribunal - it is deemed fit and appropriate to give an opportunity to the Appellant(s) to make their submissions on the merit and this Tribunal after hearing the Appellant(s) as well as Respondents shall take appropriate decision on the application filed for the interim relief in each of the Appeal(s). All these Appeal(s) be listed for admission and consideration of application for interim relief on 3rd July, 2023.
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