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2018 (12) TMI 394 - AT - Companies LawLiability to pay the audit fee of the auditors on the Company - Held that:- The auditors were appointed by the Tribunal and the liability for payment of the amount of audit fee is of the Company. Therefore, the Respondent company is liable to pay the audit fee of the auditors. Thus there is nothing wrong with such directions which calls for our interference with the same. Alternative methods for recovering monies to pay audit fees of auditors including auctioning of Respondent company movable assets instead of directing recovering from two companies - Held that:- it is the duty of the Respondent Company to pay the audit fee of the auditors. It is not the duty of the Tribunal to direct the company to consider the other methods for recovering monies. As regards the Tribunal’s observations in the impugned order “that if the company has no money at present, it has to realise the money which is recoverable from the two sister companies” is also a possible course of action the company can. The appellant seems to be making out a case that the company does not have enough fund to pay the auditors’ fee but we wonder that the poverty of the company does not deter them to fight among themselves rather than concentrated on running the company for mutual benefit of all but fall out of liabilities of such behaviour is made out to be excessive. We do not appreciate this approach. Fees claimed by the auditors on higher side and also is not as per the ICAI norms and at best are entitled for a fees of ₹ 8,00,000/- - Held that:- We have no grounds to doubt that number of days spent is 439 and number of hours spent was 3512 in auditing. As ₹ 36 lakh approx. claimed by auditor are supported by number of days spend and composition of people working on the assignment whereas there is no rational basis for suggesting that ₹ 8 lakhs is a reasonable amount for the duty to be done. It can at best be called a wild guess. We further noted that the appellant has paid nearly ₹ 62,00,000/- for auditing of the sister concerns for the same period as in the case of Respondent Company. Therefore, we are satisfied that the fee has been claimed as per ICAI norms seems reasonable. During the course of arguments, the 7th respondent has justified the fees claimed on the basis of norms of ICAI and having meticulously spent the time on the assignment and the composition of people constituting audit team. Hence, 7th respondent asserted that the fees charged is reasonable looking into the context of the work which was required to do. In the course of arguments, we toyed with idea if the 7th Respondent appearing in person through Mr. N.S. Sudarshan Gupta would consider voluntarily accepting to reduce the fees to some extent. The 7th respondent fairly stated that it would accept the orders of the Tribunal and another ₹ 4 or 5 lakhs may be reduced. However, going through the material on record and the impugned order for which the audit was involved and the mandays which were required to be spent as well as the expenditure made on audit of sister concerns, we feel it would be improper for us to reduce fees, least it set a precedent and generating litigations with the hope of getting reduction through the Tribunal by agitating the fees. When the auditor is showing the fees on the basis of ICAI norms we find it improper to interfere. The appellants are also not with clean hands and plead insufficiency of money in their accounts and when the NCLT directed that they can have the money by recovering what their dues are from their sister concern, the appellants, come up in appeals - Appeal dismissed.
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