Delhi High Court
Mgi Developers And Promoters And ... vs Union Of India And Ors. on 2 December, 2020
$~11 & 12
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 12584/2019 & CM APPL.21345/2020
KDP BUILDWELL PRIVATE LIMITED ..... Petitioner
versus
UNION OF INDIA AND ORS. ..... Respondents
+ W.P.(C) 91/2020 & CM APPL.21391/2020
MGI DEVELOPERS AND PROMOTERS AND ORS.
..... Petitioners
versus
UNION OF INDIA AND ORS. ..... Respondents
Present: Dr. Harshvir Pratap Sharma, Sr. Adv. with Mr. Tejas
Patel and Mr. Ajay Sharma, Advs. for petitioners.
Mr. Rajesh Gogna, CGSC with Mr. Karan Chhibber
and Mr. Vedansh Anand, Advs. for R-1 in W.P.(C)
12584/2019.
Mr. Asheesh Jain, CGSC with Mr. Amrit Singh, Adv.
for R-1 in W.P.(C) 91/2020.
Mr. K.C. Mittal with Mr. Yugansh Mittal, Advs. for
R-2/ICAI.
Mr. Jagdeep Bakshi with Mr. Gautam Khazanchi &
Mr. Pradyuman Kaistha, Advs. for R-3.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 02.12.2020
Signature Not Verified
Digitally Signed By:PANKAJ
KUMAR
Location:
Signing Date:10.12.2020 12:22
The proceedings in the matter have been conducted through video
conferencing.
W.P.(C) 12584/2019 & CM APPL.21345/2020
In this writ petition, learned Senior Counsel appearing for the
petitioner submitted that the respondent no. 3 was appointed as a
Chartered Accountant in the petitioner-Company. The Learned counsel
appearing for respondent no. 3 submitted that now, he has resigned from
the petitioner-Company.
The decision rendered by the learned Single Judge of this Court in
SSAY & Associates vs Institute OF Chartered Accountants Of India
Through Its Secretary & Ors [W.P.(C) 7674/2019, order dated
22.07.2019], which is at „Annexure-C‟ to CM No.21345/2020 in W.P.(C)
12584/2019 has interpreted the provisions of the Ist Schedule of the
Chartered Accountants Act, 1949 especially Clause 8 thereof. Paragraph
17 of the said decision reads as under :
"17. At the outset, it is relevant to note that there is no
requirement for an auditor to secure a no objection from the
previous auditor. Therefore, the premise that respondent
no.3 required to obtain a "no objection certificate" from the
petitioner, is fundamentally flawed. The only requirement is
that the Chartered Accountant, who accepts the position as
an auditor, must communicate with the previous auditor
about the same. Clause (8) of the First Schedule of the
Chartered Accountants Act, 1949 is produced hereunder:
"A chartered accountant in practise shall be deemed to be
guilty of professional misconduct, if he-
***
Signature Not Verified
Digitally Signed By:PANKAJ
KUMAR
Location:
Signing Date:10.12.2020 12:22
(8) accepts a position as auditor previously held by another
chartered accountant or certified auditor who has been
issued certificate under the Restricted Certificate Rules,
1932 without first communicating with him in writing;"
(emphasis supplied)
In view of the facts and looking to the order passed by the learned
Single Judge of this Court in W.P.(C) 7674/2019, there is no need of
obtaining "No Objection Certificate" from the previously appointed
Chartered Accountant. What is required is a mere communication by
subsequently appointed Chartered Accountant to the previous Chartered
Accountant as per Clause 8 of Ist Schedule of the Chartered Accountants
Act, 1949.
In view of this position, this writ petition is hereby disposed of.
Liberty is reserved with this petitioner to approach appropriate authority
in case of any difficulty. CM APPL.21345/2020 also stands disposed of.
W.P.(C) 91/2020 & CM APPL.21391/2020
In this writ petition also, learned Senior Counsel appearing for the
petitioner submitted that respondent No.3 was appointed as a Statutory
Auditor in the companies, being petitioners No.5 to 13 and petitioners
No.15 to 27. Counsel for respondent no. 3 has submitted that now, the
respondent No.3 has resigned from the position of statutory Auditor of
the aforesaid companies. The fact is also stated in order dated 17th
November, 2020 passed by Regional Director in the Company
Application No. 5/434/T-2/UP/R57552572 at page 661 of the paper
book.
The decision rendered by the learned Single Judge of this Court in
Signature Not Verified
Digitally Signed By:PANKAJ
KUMAR
Location:
Signing Date:10.12.2020 12:22
SSAY & Associates vs Institute OF Chartered Accountants Of India
Through Its Secretary & Ors [W.P.(C) 7674/2019, order dated
22.07.2019], which is at „Annexure-C‟ to CM No.21345/2020 in W.P.(C)
12584/2019 has interpreted the provisions of the Ist Schedule of the
Chartered Accountants Act, 1949 especially Clause 8 thereof. Paragraph
17 of the said decision reads as under:
"17. At the outset, it is relevant to note that there is no
requirement for an auditor to secure a no objection from the
previous auditor. Therefore, the premise that respondent
no.3 required to obtain a "no objection certificate" from the
petitioner, is fundamentally flawed. The only requirement is
that the Chartered Accountant, who accepts the position as
an auditor, must communicate with the previous auditor
about the same. Clause (8) of the First Schedule of the
Chartered Accountants Act, 1949 is produced hereunder:
"A chartered accountant in practise shall be deemed to be
guilty of professional misconduct, if he-
***
(8) accepts a position as auditor previously held by another
chartered accountant or certified auditor who has been
issued certificate under the Restricted Certificate Rules,
1932 without first communicating with him in writing;"
(emphasis supplied)
In view of the facts and looking to the order passed in W.P.(C)
7674/2019, there is no need of obtaining "No Objection Certificate" from
the previously appointed Chartered Accountant. What is required is a
mere communication by subsequently appointed Chartered Accountant to
the previous Chartered Accountant as per Clause 8 of Ist Schedule of the
Chartered Accountants Act, 1949.
Signature Not Verified
Digitally Signed By:PANKAJ
KUMAR
Location:
Signing Date:10.12.2020 12:22
In view of these facts and as the earlier Statutory Auditor has
already resigned, this writ petition is hereby disposed of. Liberty is
reserved with the petitioners to approach the appropriate authority in case
of any difficulty. CM No.21391/2020 also stands disposed of.
CHIEF JUSTICE
PRATEEK JALAN, J
DECEMBER 2, 2020
kks
Signature Not Verified
Digitally Signed By:PANKAJ
KUMAR
Location:
Signing Date:10.12.2020 12:22
