TMI Blog2022 (8) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... tate of Haryana, [ 2009 (11) TMI 998 - SUPREME COURT ] has held It is well settled that a writ petition can be held to be maintainable even if an alternative remedy is available to an aggrieved party where the court or the tribunal lacks inherent jurisdiction or for enforcement of a fundamental right; or if there had been a violation of a principle of natural justice; or where vires of the Act were in question. Thus, when the order is totally silent on the issues raised by the petitioner, despite noting the same, it is nothing but an unreasoned order, violating the principles of natural justice and thus, can be challenged before this court under Article 226 of the Constitution. The impugned order being passed without assigning reasons on the issue involved is hereby set aside as also the review order, and the matter is remanded back to the Regional Director to decide the petitioner's application afresh by a reasoned and speaking order, within a period of one month from the date of receipt of this order - Petition disposed off by way of remand. - Writ Petition No. 1893 of 2022 - - - Dated:- 17-8-2022 - Hon'ble Shri Justice Subodh Abhyankar For the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l meeting of the petitioner's company, and vide resolution dated 29.12.2015, it also appointed the respondent No.3 Rajesh Gurbani Chartered Accountant as the Internal Auditor of the company pursuant to the provisions of Section 138 of the Act of 2013, which was also accepted by the respondent No.3 and started internal auditing assignment. 4. The case of the petitioner is that in terms of the provisions of Section 139(1) of the Act of 2013, since the petitioner company had to appoint a regular statutory auditor for a period of five years, the petitioner company vide its letter dated 03.08.2016 requested Mr. Rajesh Gurbani whether he is qualified to be appointed as statutory auditors of the company. The respondent No.3 vide his letter dated 14.08.2016 sent his consent and certificate under the first and second proviso to Section 139 (1) read with provisions of Rule 4 of the Companies (Audit Auditor) Rules, 2014, to the petitioner company to the effect that his appointment shall be made in accordance with the requirements of law and also that he satisfies the criteria provided under Section 141 of the Act of 2013. Acting upon the aforesaid letter dated 14.08.2016, the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 144 (b) of the Act of 2013, the respondent No.3 could not have been appointed as Statutory Auditor of the petitioner company. It is further submitted that the respondent No.3 was also the Tax Consultant of the petitioner company for the financial year 2016-17, and had represented the company before Income Tax Authorities, in consideration of which he raised a bill of Rs.1,18,000/- on the petitioner company on 31.08.2020. It is further the case of the petitioner since the respondent No.3 was also acting as a Tax Consultant and representing the petitioner company before the Income Tax Department, there was a conflict of interest in two different positions he was holding for which he was also paid for. Since the respondent No.3 was not an independent person, which is a prerequisite to act as statutory auditor, the petitioner company filed an application before the Central Government (respondent No.2 Regional Director, North Western Region, Ahmadabad) under Section 140(1) of the Act of 2013 for removal of respondent No.3 from the post of Statutory Auditors of the company. The aforesaid application came to be rejected by the respondent No.2 vide the impugned order dated 03.09.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointment as an auditor of a company. Thus, it is submitted that the impugned order be set aside and the relief so sought by the petitioner in his application filed before the respondent No.2 dated 29.06.2021 , be allowed. 11. A reply to the aforesaid petition has also been filed by the respondent No.3, who is the main contesting party, traversing the averments made in this petition. 12. Shri Asudani, learned counsel for the respondent No.3 has raised a preliminary objection regarding the maintainability of the writ petition on the ground of availability of alternative remedy by way of filing a petition before the National Company Law Tribunal (NCLT), which is also apparent from Rule 78 of National Company Law Tribunal Rules, 2016 and it is submitted when the petitioner has equally efficacious remedy available before the NCLT, the present writ petition is liable to be dismissed on this ground only. 13. Heard counsel for the petitioner and perused the record. 14. So far as the impugned order dated 03.09.2021(dispatched on 07.09.2019) is concerned, the relevant paras of the same read as under:- 8. Hearing in the matter was held on 24.08.2021, wherein Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commenting on the financials of the company. Further there is a penal provision prescribed under the Act if the auditor does the otherwise. However, the Board of directors of the company can explain the company's point of view in the Board report on the guidelines/adverse comments of the auditor. Therefore, an opportunity to explain has already been provided to the company under the Law. It can hardly be disputed that profession of auditing is of great importance for the economy, the statement is established by the Hon'ble Supreme Court in the matter of S. Sukumar Appellat Versus The Secretary, Institute of Chartered Accountants of India Ors. Respondents. The company is not able to substantiate the other allegations. 10. After examining the application under section 140(1) of the Companies Act and reply submitted by the auditor and company, and keeping in view the above facts, the application filed by the company for removal of auditor deserves to be rejected. 11. Hence, in exercise of powers vested with the Regional Director u/s. 140(1) of the Companies Act, 2013 as per the Notification No.S.O.4090 (E) dated 19.12.2016 and having regards to all the facts circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l under the rules before the appellate authority against the order of termination. 5. In our view, the High Court had fallen in grave error in rejecting the writ petition on the aforesaid ground. First, such an order of termination was passed without issuing any show-cause notice to the appellant and without initiating any disciplinary proceedings by the authorities and without affording any opportunity of hearing. It is well settled that a writ petition can be held to be maintainable even if an alternative remedy is available to an aggrieved party where the court or the tribunal lacks inherent jurisdiction or for enforcement of a fundamental right; or if there had been a violation of a principle of natural justice; or where vires of the Act were in question. 6. The aforesaid exceptions recognised by this Court were taken note of by this Court in Collector of Customs v. Ramchand Sobhraj Wadhwani in which the Constitution Bench laid down the principles of the above exceptions when writ application could be entertained even if an alternative remedy was available to an aggrieved party. The same view was expressed by this Court in L.K. Verma v. HMT Ltd . and M.P. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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