TMI Blog2021 (12) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing the complaint filed by the Appellant - It needs to be highlighted that the order of the Karnataka High Court sanctioning the Amalgamation Scheme was sought to be recalled by India Awake for Transparency, however, the recall application, being in the nature of a review petition, was dismissed. The Appellant has repeatedly defaulted in complying with the orders of various Courts by not depositing the costs imposed - no error has been committed by learned Single Judge while deciding the petition and we are in complete agreement with the observations, reasoning and findings rendered in the impugned judgment. There is no merit in the appeal and the same is accordingly dismissed along with all pending applications with costs of ₹ 50,000/- to be deposited by the Appellant with the Delhi State Legal Service Authority within eight weeks from today. The aforesaid amount shall be utilized for the programme Access to Justice . The Appeal shall be listed on 07.01.2022, only for the limited purpose of reporting compliance with respect to deposit of costs. - LPA 208/2021 - - - Dated:- 11-11-2021 - HON'BLE THE CHIEF JUSTICE HON'BLE MS. JUSTICE JYOTI SINGH App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and to submit his report. iii. Report was submitted by Respondent No.3 on 25.11.2014 before the Karnataka High Court and was thus a part of the judicial record in Company Petitions bearing Nos.182-185/2014. iv. The Karnataka High Court after taking cognizance of the Report and deliberating thereon, sanctioned the Scheme of merger vide order dated 26.03.2015. v. A complaint was filed by the Appellant before the ICAI on 24.10.2016, alleging professional misconduct against Respondent No.3, appointed by the Karnataka High Court, for verification of the documents, etc. vi. Complaint was dismissed by the Disciplinary Committee of ICAI on 16.12.2020 and the said order was challenged before the learned Single Judge of this Court, in a writ petition being W.P.(C) 376/2021. The writ petition was dismissed and from the said order, the present appeal emanates. vii. Separately, a Recall application was filed by an entity called India Awake for Transparency before the Karnataka High Court seeking recall of the order 26.03.2015, by which the Scheme of merger was sanctioned. viii. Recall application was dismissed by the learned Single Judge of the Karnataka Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should be a shareholder of a Company, for which the audit has been conducted by the concerned Chartered Accountant. The Appellant therefore had the locus standi to file a complaint against Respondent No.3 and the complaint ought to have been investigated and enquired into by the ICAI and disciplinary action should have been initiated. xiv. Learned Single Judge has erroneously linked the Company India Awake for Transparency with the present Appellant, whereas, both are separate legal entities and the commonality of the advocate representing the two Companies cannot have any bearing on the merits of the present case. Learned Single Judge failed to appreciate that the Appellant had valid authorisation to file a complaint against Respondent No.3. The impugned order before the learned Single Judge therefore deserved to be set aside and mere non-deposit of costs imposed by the various Courts could not be a ground, either to dismiss the writ petition or for a further direction by the learned Single Judge to the Registry that no petition filed by the Appellant shall be listed, till the Appellant deposited the costs. xv. Learned Single Judge failed to appreciate that the mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. Supporting the order of ICAI, it is further submitted that the allegations made in the complaint were more or less the same as those averred in the Recall application filed by India Awake for Transparency before the Karnataka High Court and the Recall application was dismissed vide a detailed order dated 17.03.2021 by the Court, after due deliberation. Against the order of dismissal of the recall application, India Awake for Transparency filed an appeal being OSA No.1/2021 before the Division Bench of the Karnataka High Court, which too was dismissed on 22.04.2021. Placing reliance on various paragraphs of the said judgment, more particularly, paragraph 23 onwards, it is submitted that once the report has passed the test of judicial scrutiny, there was no reason why the ICAI should have again adjudicated the allegations, which were more or less similar to the ones in the recall application. In fact, there was nothing further remaining to be enquired by ICAI after the judgments of the Karnataka High Court. xviii. It is emphasized and highlighted that the Appellant is a chronic litigant and has no other work but to file petitions and/or other litigations and target a particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have no connection whatsoever either with Hasham Investment and Trading Company Pvt. Ltd. or the other three entities which have merged with it, by virtue of the Scheme of Amalgamation sanctioned by the Karnataka High Court vide order dated 26.03.2015. Further, Mr. Subramanian and the Appellant are neither creditors nor shareholders in the Applicant Company, which is an undisputed fact. The action of filing the complaint is malafide and motivated to interfere in the affairs of the Applicant Company by filing complaints against the Chartered Accountant and thereby also indirectly seeking to question the order of the Karnataka High Court, approving the Merger Scheme. xxii. Two such writ petitions being W.P.(C) Nos. 8071/2019 and 8081/2019 were dismissed by two separate orders 01.08.2019 by a learned Single Judge of this Court with costs. Attention of the Court is drawn to paragraphs 11 and 12 of the order passed in W.P.(C) No. 8081/2019, wherein the Court took notice of the observations in the decision rendered in W.P.(C) No.8071/2019, that the use of a Corporate facade by the Petitioner therein through its Directors or Promoters for pursuing complaints against various Chartere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of the Appellant as well as learned Senior Counsels appearing on behalf of Respondent No.3 and the Intervener, respectively. We have also examined the impugned judgment as well as perused the judgments of the Karnataka High Court, along with the other documents, placed on record by the respective parties. 3. The undisputed facts are that the Appellant filed a complaint before the ICAI against Respondent No.3, who being a Chartered Accountant was appointed by the Karnataka High Court, in Company Petitions alluded to above, for the purpose of verification of the books and papers of three Transferor Companies, pending the Scheme of Amalgamation with the fourth Company. Report was rendered by Respondent No.3 and was placed before the Karnataka High Court. It was considered by the Court and thereafter, the Scheme of Amalgamation was sanctioned vide order dated 26.03.2015. 4. Complaint was dismissed by the Disciplinary Committee of ICAI on 16.12.2020, primarily on the ground that the report was considered by the Karnataka High Court and it was only that Court which could take a view on the same and that the Disciplinary Committee had no jurisdiction to take cognizance on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property of the Hon ble High Court of Karnataka which alone could pass any order on the same. It also noticed that the matter was sub judice and the Committee had no jurisdiction to take cognizance of the same. It is only the Hon ble High Court of Karnataka which can take a view on the Report of the Respondent. The Committee can take any action in the matter only if an order to this effect is passed by the Hon ble High Court of Karnataka and its continuing with an inquiry in the present complaint would not be appropriate. Accordingly, the extant complaint was dismissed by the Committee. Conclusion : 6. Thus, the Committee dismissed the extant Complaint. However, the Complainant has right to file case before the Disciplinary mechanism of the Institute with the copy of Order of the Hon ble High Court of Karnataka. IV. It needs to be highlighted that the order of the Karnataka High Court sanctioning the Amalgamation Scheme was sought to be recalled by India Awake for Transparency, however, the recall application, being in the nature of a review petition, was dismissed vide order dated 17.03.2021. Relevant paragraphs of the order are as under:- (h) Merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buse of process of law and his conduct disentitles him from any relief in the present petition also. In fact, as noticed by this Court in the earlier orders, the claim of the applicant has been rejected not only by the Ministry of Corporate Affairs but also by the Reserve bank of India. Under these Circumstances also, I am of the considered opinion that the present application is not maintainable and the same is liable to be dismissed. V. The order was unsuccessfully challenged before the Division Bench of the Karnataka High Court and the appeal was dismissed by a detailed judgment dated 22.04.2021. Although Mr. Subramanian informed the Court during the course of hearing that against the order of the Division Bench, a Special Leave Petition has been filed, but it was also conceded that it is yet to be listed. Thus, the order of the Division Bench holds the field at present. For ready reference paragraphs 23, 24, 25, 26 and 27 of the Division Bench of Karnataka High Court judgment dated 22.04.2021 passed in Original Side Appeal No. 1/20121 are extracted as under:- 23. We find considerable force in the submission of learned Senior counsel inasmuch as when a company is see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng successful in those cases and not being able to get over the order passed by the learned Company Judge of this Court sanctioning the amalgamation of the three companies with respondent No.1 this is without having any locus standi to do so. 26. In the circumstances, we dismiss the appeal as being without merit. However, we refrain from imposing any cost. 27. But, having regard to the checkered history with regard to this controversy, we refrain the appellant herein, India Awake for Transparency, from filing any proceeding with regard amalgamation of the three companies with respondent No.1 herein in future before any court or authority or forum. We are constrained to pass such an order having regard to the loss of precious public time of this court and other courts by raking up such a controversy by the appellant company, without having any locus standi to do so. The same is an instance of gross abuse of the process of law as well as of this court. (emphasis supplied) VI. A bare reading of the aforesaid observations of the Division Bench, leads to an inevitable conclusion that the Appellant had no locus standi to file a complaint against Respondent No. 3. Mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally seen, the report rendered by Respondent No.3 has been tested and has passed the muster of judicial scrutiny several times, both by the learned Single Judge and the Division Bench and neither of the Courts found anything wrong with the same. If the report had anything objectionable or was false and contrary to the record of the Company or overlooked any fraudulent transactions, as alleged by the Appellant, surely, the Karnataka High Court would have taken cognizance of the same and it would not have been accepted. In this view, the Disciplinary Committee of ICAI had, in our view, treaded on the right path by dismissing the complaint. The learned Single Judge has rightly observed that no infirmity could be found in the view taken by the Disciplinary Committee and it was only the Karnataka High Court which could take a view on the report submitted by Respondent No.3. IX. We are also in agreement with the learned Single Judge that the Appellant cannot be permitted to start parallel proceedings to challenge the sanction of merger by the Karnataka High Court as also the fact that neither the Appellant nor Mr. Subramanian have any connection or nexus to the parties to the Schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Wholesale Trading Services Pvt. Ltd. v. ICAI Ors; WP(C) 8071/2019 04.12.2017 Hon ble Delhi High Court ₹ 1,00,000/- Payable to Delhi High Court Legal Services Committee within a period of two weeks, imposed on the Appellant 4. Wholesale Trading Services Pvt. Ltd. v. ICAI Ors; WP(C) 8081/2019 01.08.2019 Hon ble Delhi High Court ₹ 1,00,000/- payable to Delhi High Court Legal Services Committee within a period of two weeks, imposed on the Appellant. This order has been sustained by the Hon ble Division Bench of this Hon ble Court 6. In view of the cumulative effect of the aforesaid facts and reasons and judicial pronouncements, we find that no error has been committed by learned Single Judge while deciding W.P. (C) No. 376/2021 and we are in complete agreement with the observations, reasoning and findings rendered in the impugned judgment. 7. There is no merit in the appeal and the same is accordingly dismissed along with all pending applications with costs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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