Kerala High Court
K.J.Paul vs Seaqueen Builders Pvt. Ltd on 2 December, 2022
Author: P Gopinath
Bench: P Gopinath
WP(C) No.28583/2022 1/7
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
Friday, the 2nd day of December 2022 / 11th Agrahayana, 1944
WP(C) NO. 28583 OF 2022
PETITIONERS:
1. K.J.PAUL AGED 56 YEARS S/O LATE K.V JOSEPH, KUREEKKAL HOUSE, NEAR
THRIKKAKARA TEMPLE, COCHIN UNIVERSITY P.O., KOCHI., PIN - 682021
2. BINDU PAUL AGED 54 YEARS W/O. K.J. PAUL, KUREEKAL HOUSE, NEAR
THRIKKAKKARA TEMPLE, COCHIN UNIVERSITY P.O., KOCHI, PIN - 682021
RESPONDENTS:
1. SEAQUEEN BUILDERS PVT. LTD. 32/29828, SAHRUDAYA BUILDING,
PONNURUNNI, VYTTILA P.O., ERNAKULAM, KERALA, PIN - 682019
2. P.M.JOHNY PITTAPPILLIL HOUSE, BANDADKA P.O., KASARKODE., PIN -
671541
3. K.P.AUGUSTINE S/O. PAILY KUZHIKKATTUMYALIL, VII/131, SASTRI NAGAR,
NADATHARA P.O., THRISSUR. PRESENTLY RESIDING AT 94, POSTLING STREET,
KENWICK, WESTERN AUSTRALIA, REPRESENTED BY HIS POWER OF ATTORNEY
HOLDER ARUN C. MATHEW,14A, TRINITY CASTLE, EDAPPALLY, KOCHI -682
024., PIN - 680751
4. THE ASSISTANT COMMISSIONER OF INCOME TAX CORPORATE CIRCLE 2(1),
KOCHI, OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, INCOME
TAX DEPARTMENT, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, CENTRAL
REVENUE BUILDING, I.S. PRESS ROAD, KOCHI., PIN - 682018
5. THE COMMISSIONER OF INCOMETAX CORPORATE CIRCLE 2(1), KOCHI, CENTRAL
REVENUE BUILDING, I.S. PRESS ROAD, KOCHI, PIN - 682018
6. THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX
NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI, PIN - 110001
7. AUGUSTINE PAUL MANOJ ( SOUGHT TO BE IMPLEADED ) S/O. LATE K.P.
AUGUSTINE, RESIDING AT 94, POSTLING STREET KENWICK, WESTERN
AUSTRALIA 6107 AUSTRALIA. ( SOUGHT TO BE IMPLEADED )
Writ petition (civil) praying inter alia that in the circumstances
stated in the affidavit filed along with the WP(C) the High Court be
pleased to (a) stay all further proceedings pursuant to exhibits p4, p5,
p6, p7 and p8 notices (b) to complete audit and file the all statutory
returns including returns before the 4th and 5th respondents as called for
in exhibits p4, p5, p6, p7 and p8 notices within such time as may be
deemed just and proper by this hon'ble court pending final disposal of the
writ petition.
This petition coming on for orders upon perusing the petition and
the affidavit filed in support of WP(C) and upon hearing the arguments of
M/S. ABRAHAM JOSEPH MARKOS, V.ABRAHAM MARKOS, ISAAC THOMAS,
P.G.CHANDAPILLAI ABRAHAM, ALEXANDER JOSEPH MARKOS, SHARAD JOSEPH
KODANTHARA, JOHN VITHAYATHIL, Advocates for the petitioners and M/S.
MOHAN PULICKKAL, MANJU RAJAN, NARAYANAN P POTTY, A.AMRUTHA VIDYADHARAN,
Advocates for the Respondent No.2 and of M/S.P.K.RAVINDRANATHA MENON (SR.)
along with JOSE JOSEPH, Advocates for the Respondents No.4 5, 6, the
WP(C) No.28583/2022 2/7
court passed the following:
WP(C) No.28583/2022 3/7
GOPINATH P., J.
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W.P.(C) No.28583 of 2022
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Dated this the 02nd day of December, 2022
ORDER
Heard the learned Senior Counsel appearing for the petitioners, Adv.Mohan Pulikal for the 2nd respondent and Adv. Jose Joseph for the Income Tax Department.
2. The record of the case suggests that the petitioners and respondents 2 and 3 were share holders of the 1st respondent Company. Owing to certain disputes between the petitioners and respondents 2 and 3, there has been no meeting of the Board of Directors of the Company from 2017-18 onwards. There has also been no Annual General Meeting convened in all the aforesaid years and consequently no auditor has been appointed to audit the accounts of the Company. In other words, the accounts of the Company from 2017-18 onwards remain unaudited. Though certain accounts have been drawn up by the 1 st petitioner, they have not been approved in a manner known to law.
WP(C) No.28583/2022 4/7WPC No.28583 of 2022 2
3. It appears that in proceedings before the National Company Law Tribunal, certain options of purchase of shares by either side was explored and final orders have now been issued permitting the petitioners to acquire the shares of respondents 2 and 3 at a value fixed by the Tribunal. Respondents 2 and 3 (3rd respondent since expired) have challenged the orders of the Tribunal before the National Company Law Appellate Tribunal and the said appeal is pending.
4. In the meanwhile, the Income Tax Department had initiated proceedings for completing assessment for the assessment years 2017-18 and 2018-19 to best of judgment. It is the submission of the counsel appearing for respective parties that if this Court were to appoint an auditor to audit the accounts of the Company for all the years in question, the Company will be in a position to file its returns in response to notices issued under Section 148 of the Income Tax Act. It is submitted that proceeding further with Exts.P4 and P8 notices without affording an opportunity to the 1st respondent Company to have its accounts audited will cause great prejudice WP(C) No.28583/2022 5/7 WPC No.28583 of 2022 3 to all the parties concerned. It is also submitted that since the dispute between the petitioners and respondents 2 and 3 are at large before the National Company Law Appellate Tribunal, some mechanism has to be arrived at to ensure that the accounts are audited and the Company is permitted to file its return in response to notices now issued by the Income Tax Department.
5. Having heard the learned counsel as above, I am of the opinion that Sri. K.V. Jose of M/s. JKV & Co. (FRN 0154115), Chartered Accountant, 1 st Floor, Udaya Building, Pullepady Road, Pullepady Jn., Ernakulam - 682018 can be appointed as auditor for auditing the accounts of the Company for the years 2017-18 till 2021-22.
6. It is the submission of the learned Senior Counsel appearing for the petitioners that since draft accounts have already been drawn up, the auditor appointed by this Court may be in a position to complete the audit as above, within a period of six weeks from today. The 1st petitioner will provide the WP(C) No.28583/2022 6/7 WPC No.28583 of 2022 4 draft accounts and any other records that will be required by the auditor for the purpose of completing the audit.
7. The interim order will continue on condition that the 1st respondent Company makes a provisional deposit of a sum of Rs.20,00,000/- with the Income Tax Department. The payment shall be treated as provisional and subject to further orders issued by this Court. The payment shall be made as aforesaid within a period of two weeks from today.
This matter is adjourned to be listed on 31.01.2023. The auditor appointed by this Court will endeavour to complete the Audit by 31.01.2023. The auditor may raise his bills for professional fees on the 1 st respondent Company. The Company shall honour those bills within a reasonable time.
Sd/-
GOPINATH P. JUDGE SKP/2-12 WP(C) No.28583/2022 7/7 APPENDIX OF WP(C) 28583/2022 Exhibit P4 TRUE COPY OF THE NOTICE DATED 13.08.2021 ISSUED BY THE 6TH RESPONDENT.
Exhibit P5 TRUE COPY OF THE NOTICE DATED 18.03.2022 ISSUED BY THE 4TH RESPONDENT FOR THE YEAR 2018-19 Exhibit P6 TRUE COPY OF THE PROCEEDINGS DATED 24.03.2022 ISSUED BY THE 4TH RESPONDENT Exhibit P7 TRUE COPY OF THE NOTICE DATED 31.03.2022 ISSUED BY THE 4TH RESPONDENT.
Exhibit P8 TRUE COPY OF THE NOTICE DATED 17.08.2022 ISSUED BY THE 6TH RESPONDENT FOR THE YEAR 2018-19.