Home Case Index All Cases Companies Law Companies Law + Tri Companies Law - 2020 (3) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 921 - Tri - Companies LawOppression and Mismanagement - Approval of voluntary revision of Financial Statements and Board reports - section 131 of the Companies Act, 2013 read with Rule 77 of the NCLT Rules, 2016 - HELD THAT:- The narrated sample of accounting deficiencies are culled out from the Reports and observations of qualified and expert Accounting /Auditing Firms, and cannot be factually questioned in the present proceedings. On an overview of the same we are in agreement that a case is clearly made out for revising the financial statements and Board's reports. Even if we disregard the opinion with regard to any misappropriation, fraud etc., these facts are clearly such as would distort the Final Accounts and not give a true and fair picture of the goings on in the Company, as required by section 129. We are, therefore, in agreement with the Petitioner, based on the Reports of the Auditors, that the financial statements and Board's reports for the Applicant Company need to be revised and recast. While dealing with proceedings under section 131, we are not concerned here with the dispute, allegations and counter allegations between different parties, but rather only with the accounts as prepared by the Applicant Company for the years 2012-13 to 2014-15, and which have been found to be not giving a true and fair picture of the actual events and transactions, and whether the same require to be revised and re-drafted. Whatever the disputes, the same have been taken up before other concerned authorities/courts, and the resolution of such disputes is not the issue in the present proceedings. The same are referred to only for examining the intent of legislature and the applicability of section 131. With regard to the wordings of section 131, which have been interpreted differently by the opposing sides, we have to assert that a provision of law cannot be applied in all circumstances or through ordinary principles of interpretation when the circumstances necessitating their interpretation are extraordinary, as is the case here. Any such interpretation must be in sync with the overall intent of the Act and unique facts of the case. Also, law has to be interpreted for righting a wrong and not for perpetuating a wrong. Grave financial misreporting/ misappropriation cannot be allowed to hide behind mere interpretation or minor technicalities. The words "in respect of any of the three preceding financial years" have to be read as any three previous years as that is the scheme of things in the Act for cases of this kind and which are not cases of mere inadvertence, and which accounting wise also cannot be ignored - in view of the totality of facts and circumstances, all three years, i.e. FYs 2012-13, 2013-14 and 2014-15, would be covered for revision, not only because of the accounting compulsion, since FY 2014-15 is in any case covered, and the earlier years' accounts have a bearing on the same, but also per the provision contained in section 131 of the Act. This is a fit case for granting approval under section 131 to prepare revised financial statements and/or revised reports in respect of the Financial Years 2012-13, 2013-14 and 2014-15 in the case of the Applicant Company - petition disposed off.
|