Indian Kanoon - Search engine for Indian Law

the first category of "Statutory Auditors" and the second of "Internal Auditors". The Statutory Auditors are A-70 Sachin Singhal; A-75 Anuj Agarwal; A-76 Pankaj Bansal; A- 77 Yogesh Gupta; A-78 Harish Gupta; and A-80 Naresh Kumar. The internal auditors are A-71 Khem Chand and A-74 Mayank Goyal.

2. Since the oldest case pending before this Court is the case of Anuj Agarwal, i.e., CRM-M-14813-2022, as such, it is being taken as the lead case.

68. That further the respondent Bank, had initiated Insolvency proceedings against the SRS Limited, vide CP (IB) No. 201/CHD/HRY/2018, before Ld. NCLT, Chandigarh."

27. A perusal of the reply filed by the State Bank of India clearly indicates that the documents considered while sanctioning loan did not include any balance sheet or auditors' statement(s) or any profit and loss accounts of the companies. It is explicitly clear that the list(s) of documents, which were considered by the Banks while granting loan(s), did not include any assessment of the stock, which was present in the balance sheet and in the profit and loss account, or any undertaking by the Chartered Accountants about the correctness of the accounts. It appears that the banks had granted and extended loans routinely, presuming that everything was in order. Thus, in view of no objection raised by the banks and non-consideration of any document prepared by any of the petitioners-Chartered Accountants, it cannot be said that at the time of extending the loan by the consortium of banks, any of the petitioner(s)-Chartered Accountants, including Internal and Statutory Auditors, had any role or participation.

29. A perusal of the complaint does not point to a single allegation of unjust enrichment that any of the petitioners, including the internal auditors, were paid a salary or any cash or jewelry for favorable audit reports. If the auditors are not paid anything extra than what they were entitled to, there would be no motive for them to alter the accounts or not to give the correct reports intentionally. The question does remain whether it was a mere dereliction of duty or an intentional concealment of the rotation of funds in the reports.

30. It is clear that the petitioners, Chartered Accountants, had no role in obtaining bank loans. Thus, the only role this Court sees is the rotation of funds and the siphoning off of funds by the SRS Group of Companies. If the auditors were involved, there had to be a criminal conspiracy by the Chartered Accountants, including whether the Statutory Auditors or the Internal Auditors were the main controllers of the SRS Group, as mentioned (supra). There is no evidence that any of the statutory or internal auditors were paid or given undue favors, which would serve as a motive to favor the company in return. In the absence of any such undue favors, the culpability is reduced to dereliction of duty, for which custodial interrogation is not required.