The Delhi High Court has held that a Chartered Accountant (CA) of a company cannot be compelled to be summoned as a witness in a recovery suit.
The bench of Justice Manoj Jain has observed that the insistence shown by the defendant regarding production of such audited balance-sheets, tax audit reports and ledger accounts does not seem to be relevant in context of the present suit. Moreover, the defendant cannot compel the plaintiff to summon and examine his Chartered Accountant.
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Background
The petitioner is defending a commercial suit filed by respondent M/s Reckon Industries Limited.
When the case was at the stage of trial and the plaintiff was being cross-examined, one application was moved by defendant under Order XI Rule 12 read with Order XVI Rule 6 CPC praying therein that the plaintiff may be directed to place on record Tax Audit Reports from 2016 till 2023, ledger accounts for the relevant period and audit notes of the Chartered Accountant.
Defendant also prayed that the Chartered Accountant of the plaintiff company may also be summoned as a witness along with the audit notes claiming that such notes were essential to fill up the gaps and inconsistencies allegedly appearing in the balance-sheets of the plaintiff company.
A suit seeks recovery of a sum of Rs. 1,47,21,509. The sole question in the above suit is to the effect as to from which particular date, the interest can be claimed from the defendant i.e. from the date of loan or from the date when the proceedings was filed before the concerned National Company Law Tribunal (NCLT).
When the matter was pending before the National Company Law Appellate Tribunal, New Delhi, the matter was amicably settled and the plaintiff received the principal amount along with interest, reckoned from the date of filing of the proceedings before the NCLT.
The sole claim is whether the plaintiff is entitled to interest amount from the date of loan or from the date when the application was filed before NCLT and keeping in mind the limited issue raised in the suit and the relief claim in the suit, evidently, the application moved by defendant does not seem to be sustainable as it does not seem germane to the issues raised in the suit in question.
The Trial Court has even observed that the balance-sheets are available on public domain and these can be easily downloaded from the public domain and, if required, the witness of the plaintiff can be confronted with such balance-sheets.
Conclusion
The court while dismissing the petition did not find any reason, much less a plausible one, to interfere with the order while also keeping in mind the narrow scope of appreciation while dealing with any petition filed under Article 227 of Constitution of India.
FAQs
Can Chartered Accountant Of A Company be Compelled To Be Summoned As A witness In Recovery Suit?
No. Chartered Accountant Of A Company Can’t Compelled To Be Summoned As A witness In Recovery Suit.
Case Details
Case title: Warm Forging Private Limited V/S Reckon Industries Limited
Citation: CM(M) 3407/2024, CM APPL. 54421/2024 & CM APPL. 54422/2024
Counsel for the Petitioner: Dr. Pankaj Garg
Counsel for the Respondent: Raghav Sabharwal
Decision Date: 18.09.2024
