Delhi High Court
Oaks Asset Management Private ... vs Just Buy Live Enterprise Private ... on 23 September, 2020
$~VC-6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 23rd September, 2020
+ FAO (OS) (COMM) 116/2020
OAKS ASSET MANAGEMENT PRIVATE LIMITED
(ERSTWHILE ALPHA CAPITAL ADVISORS PRIVATE
LIMITED) & ANR. .....Appellants
Through: Mr. Bishwajit Dubey, Mr. Gaurav
Singhi, Ms. Srideepa Bhattacharya,
Mr. Aman Singhania, Advocates
versus
JUST BUY LIVE ENTERPRISE PRIVATE LIMITED & ORS.
.....Respondents
Through: Mr. Bhavya Sethi and Ms.
Gyanika, Advocates for respondent
No.1&2
Mr. Uday Gupta for respondent
No. 3
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
HON'BLE MS. JUSTICE ASHA MENON
[VIA VIDEO CONFERENCING]
RAJIV SAHAI ENDLAW, J.
C.M. Appln. No.23663/2020 (Exemption from filing certified
copy of the impugned order dated August 14, 2020, legible
copies of dim documents, underlined documents and
documents not having requisite font size)
1. Allowed, subject to just exceptions and as per extant rules.
2. The application is disposed of.
FAO (OS) (COMM) 116/2020
3. The appeal impugns the order, dated 14th August, 2020 of
the Commercial Division of this Court, of dismissal of I.A.No.
6891/2020, filed by the appellants in disposed of O.M.P.(I)
(COMM.) 228/2019 under Section 9 of the Arbitration and
Conciliation Act, 1996 (Act), for clarification of the order dated 6th
February, 2020 disposing of the O.M.P.(I)(COMM.)228/2019.
4. The counsel for the respondent Nos. 1 and 2 and the counsel
for the respondent No. 3 appear on advance notice.
5. We have heard the counsels, without going into the aspect of
the maintainability of this appeal.
6. Though O.M.P.(I)(COMM.)228/2019 under Section 9 of the
Act supra was filed claiming several reliefs but the counsel for the
appellants/petitioners, when the said petition came up before the
court on 6th February, 2020, confined the reliefs therein to
appointment of an auditing firm as Forensic Auditor to conduct
forensic audit of the accounts of the respondent No.1 company.
7. On the counsel for the appellants/petitioners so confining the
reliefs, the counsel for the respondents stated that he had no
objection if an independent auditor was appointed to conduct
forensic audit of the accounts of respondent No.1 Company for the
years 2017-2018 and 2018-2019 and the charges therefor were to
be borne by the appellants/petitioners.
8. From a reading of the order dated 6th February, 2020 it
appears that the counsel for the appellants/petitioners did not have
any objection to the aforesaid and accordingly the petition was
disposed of giving liberty to the appellants/petitioners to appoint
one of the four named auditing firms, to conduct forensic audit of
the accounts of respondent No.1 Company for the years 2017-2018
and 2018-2019.
9. Today, the counsels have informed that pursuant thereto the
appellants/petitioners appointed an Auditor and forensic audit is
going on and the respondents have provided all the requisite
information, including passwords for all emails, to the auditor, for
the purposes of the said audit.
10. The appellants/petitioners thereafter filed I.A.No.6891/2020
seeking that the audit should be also for the years 2015-2016 and
2016-2017, besides for the years 2017-2018 and 2018-2019 already
ordered. The said application came up before the Commercial
Division on 14th August, 2020, when recording that during the
hearing on 6th February, 2020, the years 2017-2018 and 2018-2019
were mentioned and to which the respondents agreed, the
O.M.P.(I)(COMM.)228/2019 was disposed of and the
appellants/petitioners were in effect seeking review of the order,
the application was dismissed.
11. The counsels for the respondents, on enquiry though have
fairly stated that they have nothing to hide and have already
cooperated to the maximum, have contended that the audit
underway, in spite of all information having been provided, is
extending endlessly and the respondents are being asked to bear
certain expenses and which the respondents are not willing to bear.
It is stated that the respondent No.1 Company has stopped all
businesses and has no activity and its Directors, being respondents
No. 2 and 3 are being put to unnecessary harassment during the
course of the forensic audit.
12. However, on it being proposed to counsels for the
respondents that the time-limit for the forensic audit as well as the
number of inquiries which can be made from the respondents can
be limited and directed to be specific and in writing, with the
respondents being required to submit written answers and that the
respondents will not have to bear any expenses, the counsels for
the respondents have agreed.
13. In the circumstances, without going into the question of
maintainability of this appeal, the appeal is disposed of with the
following directions:
a) That the Forensic Auditor already appointed shall be
entitled to conduct the forensic audit, also for the
years 2015-2016 and 2016-2017 but the audit for the
entire period, from 2015 to 2019, shall be concluded
on or before end of February 2021 and the
respondents shall not be asked to pay/bear any
expenses therefor.
b) The counsels for the respondents state that they have
already provided access to all accounts and data of the
years 2015-2016 and 2016-2017 also to the Auditor
already appointed. The Auditor shall, on or before 31st
October, 2020, by a communication in writing to the
respondents, ask particulars of other accounts/data, if
any required, for the additional two years.
c) The respondents shall, on or before 30th November,
2020, respond thereto, alongwith all the data requested
and if the same is not available, stating so and giving
reasons therefor and whereabouts thereof.
d) Thereafter, the Auditor shall be entitled to make
queries, if any, only in writing, from the respondents,
only twice and to which the respondents shall furnish
replies in writing within 10 days of receipt of each set
of queries. No other communication or inquiries shall
be made by the Auditor from the respondents.
e) No inquiries beyond the replies to the second set of
questionnaire shall also be made.
f) If it is the claim of the appellants/petitioners that the
respondents have evaded to answer any queries or
furnish any data, the appellants/petitioners shall be
entitled to plead so in the arbitration proceedings, if
any initiated and if entitled to, raise adverse
presumption therefrom.
14. On enquiry, it is stated that arbitration has not commenced
as yet and if the appellants/petitioners are satisfied with the report
of the Forensic Auditor appointed, the occasion for arbitration may
not arise.
15. The appeal is disposed of.
RAJIV SAHAI ENDLAW
(JUDGE)
ASHA MENON
(JUDGE)
SEPTEMBER 23, 2020
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