TMI Blog2014 (7) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... tors before giving the same to the Auditors. Respondent Nos 3 & 4 continued to be Directors despite the issue of their appointment under dispute pending for judicial scrutiny by this Hon'ble Board. On the same analogy, Petitioner Nos 1 & 2 continued to be Directors of the Company. Under these circumstances, the Balance sheets for the financial years ending 31st March, 2012 and 31st March, 2013, may be audited by the Auditors of the Company with due compliance of Section 215 of the Companies Act, 1956, by the Board of Directors consisting of Directors as per statutory records available with the Registrar of Companies and this will not prejudice the right of the Petitioners to challenge the appointment of Respondent Nos 3 & 4 - Decided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey will not be able to increase the currency of the account for the short period. In addition, the Respondent-company was also advised to submit financial statement for the years 2011-12 2012-13 within a period of one month failing which the Respondent Bank has given a clear-cut observation that the limit shah stand expired. Thereafter, the Petitioners/Applicants had again approached the statutory Auditor, namely, M/s Prahalad Gupta Co., Chartered Accountants, for getting the accounts audited, however, the Petitioner has been informed by them that owing to the dispute being pending before this Hon'ble Board, they will not be able to audit the accounts unless and until, there is a direction from the Hon'ble Company Law Board. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of appointment of Applicant Nos 1 2 as Directors of the Company and the Applicants have also challenged the appointment of Respondent Nos 3 4 as Managing Director and Director of the Company respectively. Consequently, there is a stalemate on the Board of Directors of the Company. Lastly, Respondents Advocate has submitted that the operation of the company shall not be affected at any cost and hence, this Hon'ble Board may in exercise of its power under Section 403 of the Companies Act, 1956, appoint at least one independent Director on the Board in addition to the non-controversial Directors already on the Board but to the exclusion of the 4 Directors whose appointment is under scanner before this Hon'ble Board and may direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count to the Respondent No 2 and also, to the Hon'ble Company Law Board. In this regard, it has been submitted that the Petitioner is complying with the directions of this Hon'ble Board diligently. Lastly, it has been argued that no prejudice would be caused to either of the party and particularly to the Respondents if the prayer made in the Company Application is allowed. 4. In his arguments, the Respondents Advocate pleaded that no direction is required to be issued to the statutory Auditors to audit the accounts as duties of Auditors and consequence for non-performance of duties by the Auditors is itself provided under the provisions of the Companies Act, 1956 and if the prayer is allowed, the same would be against the mandate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rily required to audit the books of account for the financial years ending 31st March, 2012 and 31st March, 2013, as a part of his duties. However, the Respondents Advocate has raised the issue of compliance of Section 215 of the Companies Act, 1956, for the approval of the Balance sheets by be Board of Directors before giving the same to the Auditors. The Petitioners Advocate has also no. disagreed for the compliance of Section 215 of the Companies Act. 1956. Of course, in the Petition, the Petitioners have Challenged the appointment of Respondent Nos 3 4 as Managing Director and Director respectively and the said matter is pending for adjudication. Likewise, the Respondents Advocate has raised the issue of appointment of Petitioner Nos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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