HGR Logistics Private Limited Vs Kishor Goyal & Co. (Regional Director, North-Western Region, Ahmedabad)
An on-line application has been filed by HGR LOGISTICS PRIVATE LIMITED under Section 140 (1) of the Companies Act, 2013 in e-form No. ADT-2 on 20.02.2021 vide SRN T03145794 seeking approval for removal of its Statutory Auditors namely M/s. Kishor Goyal & Co, Chartered Accountants.
2. The company was incorporated on 01.04.2013, having registered office of the company in the state of Gujarat and the company has filed its last Balance Sheet as on 31.03.2019 as seen from the MCA website.
3. Further, as per section 140(1) of the Companies Act, 2013 Removal, and resignation of auditor and giving of special notice: “the auditor appointed under section 139 may be removed from his office before the expiry of his term only by a special resolution of the company, after obtaining the prior approval of the Central Government. Provided that before taking any action under this sub-section, the auditor concerned shall be given a reasonable opportunity of being heard”.
4. The company has stated in its application that the auditor was not able to conduct the audit in timely manner also the auditor was unwilling to visit the company even after multiple request made by the company.
5. An opportunity to make written submissions/objections in the said matter was given to the Auditor vide letter dated 22.02.2021 to which the auditor has submitted its comments on 09.03.2021. A copy of letter dated 22.02.2021 was also endorsed to the Registrar of Companies, Ahmedabad with a request to submit a report in the matter.
6. ROC, Ahmedabad has submitted its report in the matter vide letter dated 30.03.2021. ROC has reported that the company has filed its last Balance sheet for the year ended as on 31.03.2019 and has failed to file Balance sheet for the year ending as at 31.03.2020 and relevant annual returns as per the requirement of Section 137(1) and Section 92(4) of the Companies Act, 2013 as the company/officers have violated the aforesaid provisions the adjudication u/s 454 of the Act is under process. Further it has been observed from copy of Board’s Resolution and minutes that the company has not mentioned CIN and registered office address on its letter Head as required under the provisions of section 12(3)(c) of the Companies Act, 2013 which has attracted the penal provision of section 12( 8) of the Act and adjudication u/s 454 of the act is under process.
7. The auditor submitted his comments/reply on 09.03.2021 in which the auditor had made certain allegations against the company. This Directorate vide letter dated 07.09.2021 and after considering all the written submissions made by the auditor had called for point wise evidences/documents in support of the allegations made by the auditor in its reply. The auditor submitted its reply on 09.09.2021 questioning the jurisdiction of this Directorate for calling for information and it was also observed that inappropriate language has been used by the auditor while its correspondence with the Government authority. The Competent authority had given an opportunity for hearing in the matter as the auditor failed to submit the called information.
8. A reasonable opportunity of being heard was given to the company and the auditor by fixing personal hearing on 10.03.2022 at 4:30 p.m. The intimation of the hearing was given to both the applicant and the respondent vide letter dated 01.03.2022. Dunng the hearing Shri Vishal Dave, Advocate and Shri Kumar Pal assisting Vishal Dave appeared on behalf of the Applicant Company and submitted its oral submissions in the matter. Whereas no one appeared from the Respondent Auditors firm M/s Kisrior Goyal & Co. The hearing, was concluded by allowing another opportunity to the auditor and the next hearing was fixed on 29.03.2021.
9. On the date of next hearing held on 29.03.2021 Shri Vishal Dave, Advocate and Shr Kumar Pal appeared on behalf of the Applicant Company and Shri Kishor Goyal the auditor himself appeared on behalf of the respondent M/s Kishor Goyal & Co. During the hearing the authorized representative of the applicant company submitted that the company had time and again requested to conduct the audit for the Financial Year 2019-20 and 2020-2021 and also submitted that the provisional financials of the Company are prepared by the Company but the auditor has failed to conduct the audit for the relevant years. It was also submitted that the company will have to pay the consequences because of the failure of auditor in conducting the audits.
The auditor during the course of hearing submitted that the company has not given him the financials and so it was not possible for him to condict the audit. The competent authority has asked the auditor that whether he had visited the registered office of the company verify the Books of Accounts, to which the auditor has stared that he has never visited the office of the company, in fact the audit for the past years was carried on at the office of the auditor itself. The auditor was asked to justify that why he should not be removed from his office as a statutory auditor from the applicant company, as the audit is pending from past two years. The auditor failed to satisfy that why he should not be removed from the company as a statutory auditor and the competent authority observed that there was complete loss of trust between the parties and the dispute between the parties did not seem to have a resolution in the near future, hence due to failure of the auditor to satisfy the competent authority and in the interest of justice and for the smooth functioning of the applicant company, the application deserves to be approved.
10. After careful examination of the application made under section 140(1) of the Companies Act and considering all the averments made by both the parties, the application filed by the company for removal of auditor deserves to be approved as the auditor could not establish or satisfy the authority as to why he should not be removed and why he should be continued as the auditor in the company even after complete loss of trust between both the parties. Thus, the matter has been decided on merits and in the interest of justice.
11. Hence, exercising 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, having regards to all the facts & circumstances, the application for removal of M/s. Kishor Goyal & Co, Chartered Accountants, under Section 140 (1) is hereby approved.
The application stands disposed of with these orders.
