- (1.) The present appeal is directed against the order passed by the Company Law Board (herein after referred to as the CLB ) whereby the CLB has issued directions and disposed of the company petition.
(2.) We have heard Mr.Perikal K. Arjun, learned counsel for the appellants and Mr.Vivek Holla, learned counsel appearing for the main contesting party-respondents No.2 and 3 i.e., the original petitioners No.1 and 2 who are appearing on caveat.
(3.) Learned counsel for the appellants contended that original petitioner No. 1 had resigned and thereafter a meeting was held and various decisions were taken including that of permanent directorship and affirmative vote. The allegation of misappropriation of money were net proved before the CLB since the procedure before the CLB is by way of summary procedure. He further contended that the decisions were already taken by the Board and the Articles were also amended accordingly The CLB ought not to have issued the directions which are issued in the impugned order. Learned counsel lastly contended that even if it is considered that original petitioners No. 1 and 2 are having 66% shareholding and appellant No.1 is having 1% shareholding and appellant No. 2 is having 33% shareholding then also the CLB ought not to have permitted original petitioners No.1 and 2 and respondent No.3 to sign and issue the cheque(s) with signature of two for operation of the Bank accounts of respondent No. 1-Company. He submitted that if such a direction is allowed to operate the original petitioners No.1 and 2 will manage the affairs of the company as per their desire and there will be complete exclusion in participation of the group representing 33%. Hence, such a direction ought not to have been issued by the CLB. He also contended that the direction issued for examination by the statutory auditor in connection with the alleged misappropriation of money was also uncalled for, particularly when the appellants have no faith in the statutory auditor who is appointed by a group of original petitioners No. 1 and 2. However, he conceded that if in any event the examination is to be made, the same should be made by an independent auditor other than the statutory auditor. He submitted that if the learned counsel appearing on caveat for original petitioners No 1 and 2 agrees to a name of a chartered accountant, such chartered accountant can be entrusted with the audit work. He submitted that the Court may issue appropriate direction to any other authority to give such work of the auditor for examination, but in any case, he should not be the statutory auditor of the Company.;