Tuesday, 16 November 2021

Punjab National Bank Vs. M/s James Hotels Ltd. - RP permitted to appoint Chief Financial Officer for the purposes of signing the financial statements.

NCLT Chandigarh (24.10.2017) In Punjab National Bank Vs. M/s James Hotels Ltd.  [CA Nos. 165/ 2017 and 164/ 2017 in CP (IB) No.15/Chd/CHD/2017] held that;

  • the instant application is disposed of with the directions to the Resolution Professional that he is at liberty to appoint a new Chief Financial Officer for the purposes of signing the financial statements


Excerpts of the order;

Prayer made in this application by the Resolution Professional is for issuance of necessary directions to Mr.B.B.Goel, Chief Financial Officer of the Corporate Debtor, also holding additional charge of General Manager for signing of the financial statements for the year ending 31.03.2017 in respect of the transactions which were undertaken by the Company during his tenure. It is submitted that without signing of the financial statements, the Resolution Professional is not able to finalise the financial statements to be placed in the Annual General Meeting of the company, thus delaying the whole process.

 

# 2. Reply is filed by Mr. B.B. Goel and it is stated that he proceeded on leave on 06.7.2017 on medical grounds and was operated upon for Coronary Artery Surgery (Angioplasty) in PGI, Chandigarh on 03.08.2017 and thereafter he has not joined the company. It is also submitted that he has already signed the audited financial results of the company as per letter dated 30.05.2017 and that statement is also signed by the Resolution Professional, and the Company Secretary (from pages 36 to 39 of the reply).

 

# 3. Learned counsel for the Resolution Professional-applicant submits that the financials were placed in the 2nd meeting of Committee of Creditors held on 27.07.2017 in which various discrepancies were found and the matter was kept in abeyance and still not finalized. It is further contended that Mr.B.B Goel signed only the abridged statements and detailed financial statements were yet to be signed by him as it is his duty as Chief Financial Officer of the company as per Section 134 of the Company Act, 2013.

 

# 4. Mr. B.B. Goel states that it requires lot of time consuming exercise by going into the accounts and various documents of the company for signing the detailed financial statements. It is further submitted by Mr. B.B. Goel that he had put in his resignation on 27.07.2017 but no decision has been taken on his resignation so far. Learned counsel for the Resolution Professionalapplicant, however, submits that the Company Secretary has signed the statements and that there is presently only a Financial Controller working in the company.

 

# 5. Having heard the learned counsel for the applicant and Mr.B.B.Goel, the instant application is disposed of with the directions to the Resolution Professional that he is at liberty to appoint a new Chief Financial Officer for the purposes of signing the financial statements and in case any fraud is detected in the accounts while finalising the statements, the matter with regard to proceeding against Mr. B.B. Goel, the earlier Chief Financial Officer would remain open and for that purpose, the Resolution Professional-applicant would be at liberty to place the matter before the Committee of Creditors.

 

With these directions, the instant application stands disposed of.

 

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Disclaimer:

The sole purpose of this post is to create awareness on the "IBC - Case Law" and to provide synopsis of the concerned case law, must not be used as a guide for taking or recommending any action or decision. A reader must refer to the full citation of the order & do one's own research and seek professional advice if he intends to take any action or decision in the matters covered in this post.