NATARAJAN RAMESH RAJAN PARTNER Vs. GOVERNMENT OF INDIA

JUDGEMENT

(1.) THE brief facts of the case are as follows: -

(2.) WHILST conducting the audit for the period ended 31 December, 2000 the petitioner had borne in mind the provisions of the Companies Act, 1956 and the pronouncements of the Institute of Chartered Accountants of India made from time to time and there were 4 comments in the Auditor's Report and 6 comments in the annexure to the Auditor's Report which had been printed in italics. The comments relating to the two matters under question (viz. internal audit, PF dues) were not printed in italics based on my assessment and judgment that these matters would not have any adverse effect on the functioning of the Company for reasons explained below: -

(3.) THE petitioner crave leave of this Court to produce a copy of the Guidance Note on section 227(3)(e) and (f) of the Act issued by the Institute of Charitable Accountants of India, New Delhi and refer and rely upon the same as part of this Affidavit. The Firm had also effectively and elaborately dealt with the other aspects raised in the letter of the respondent dated 08.04.2002 in its reply dated 15.04.2002. While so, the petitioner was pained and shocked to receive a show -cause notice dated 2nd December, 2002 from the respondent asking me to state as to why prosecution should not be launched against the petitioner under Section 233 of the Act for the alleged default. The alleged default is stated to be the violation of the provisions of Section 227(3)(e) of the Act. In the said letter no reference has been made to the extensive reply given to the questions raised by the respondent by its letter dated 8th April, 2002. It can therefore, reasonably be assumed that notwithstanding the several explanations given by the Firm in his letter dated 15th April, 2002 the matter has been already concluded by the respondent and the show cause notice was issued only as a formality with an object to launch prosecution against the petitioner.