R. Swarup Reddy v. M.N. Pratap Reddy

COMPANIES ACT, 2013,

--Appeal from orders of Tribunal --Appointment of independent auditors Auditing of books of account and investigation into affairs of company --Whether remuneration paid to auditors reasonable--Where auditors audited the accounts of company as well as investigated into affairs of the company and claimed their fees duly supported by number of days spent and composition of people working on assignment, such fee claimed by the auditors was reasonable.--Company Law Board (CLB) appointed independent auditors for the purpose of auditing the books of account as well as for investigating into the affairs of respondent company. Auditors completed their work and claimed audit fee of Rs. 36.16 lakh. Tribunal directed the company to pay the fee to the auditors. Appellant filed an appeal under section 421 against the order on the ground that the audit fee claimed was highly excessive and that the auditors were best entitled for a fees of Rs. 8 lakh. Held: It was noted that the auditors audited the accounts of company as well as investigated into affairs of the company for a period of seven years. The audit fee claimed by the auditor was supported by number of days spent and composition of people working on the assignment. There was no rational basis for suggesting that the amount of Rs. 8 lakh was reasonable for the work done. The auditor had shown the fee on the basis of norms of Institute of Chartered Accountants of India, therefore, it was not proper to interfere with the order of the Tribunal. Hence, appeal was dismissed.