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2010 DIGILAW 54 (CAL)

Balaram Chowdhury v. Swapan Sadhan Bose

2010-01-27

ASHIM KUMAR BANERJEE, KALIDAS MUKHERJEE

body2010
JUDGMENT Ashim Kumar Banerjee, J. 1. The above three applications being C.P.A.N. No. 492 of 2007, CAN No. 6178 of 2008 and CAN No. 8901 of 2008 were filed by the applicant being the respondent No. 1 in the above appeal which stood disposed of long before. The matter was ultimately resolved by the Apex Court vide order dated July 15, 2005. The Apex Court therein observed as follows: "The only grievance urged on behalf of the petitioners is that no directions have been issued by the High Court for audit of the account of the club. Without in any manner interfering with the directions given by the High Court for conducting the elections and the time schedule within which the same should be held, we are of the view that the High Court shall issue appropriate directions for the audit of the accounts of the club. We are, however, no linking the audit with the conduct of the elections and the audit would be conducted expeditiously under the overall supervision of the High Court." 2. IN ordinary course, in a disposed of appeal, we have hardly any power to deal with any application in absence of a lis pending before us. However, these three applications came to be filed as an offshoot on the allegation that the order of the Apex Court was performed in breach by some of the parties. By the observation quoted (supra), the Apex Court was of the view that the High Court should issue appropriate direction for audit of the accounts. In terms of such direction the Division Bench in CAN No. 6560 of 2005 passed an order dated August 18, 2006. M/s. Lovelock and Lewes Chartered Accountant was entrusted the job of audit. The relevant part of the said order quoted below: "The senior partner of M/s. Lovelock and Lewes and Company is personally present in Court and is being represented by the Senior Counsel Mr. Hirak Mitra. It is needless to mention that the club accounts have to be audited as per the direction of the Supreme Court. It is not in dispute that since the year 1980 when the present Executive Committee came into power, club accounts have not yet been audited. It further appears in course of hearing that the club accounts have also not been audited since after 1983. It is not in dispute that since the year 1980 when the present Executive Committee came into power, club accounts have not yet been audited. It further appears in course of hearing that the club accounts have also not been audited since after 1983. We, therefore, pursuant to the direction of the Supreme Court direct that the club accounts shall be audited by M/s. Lovelock and Lewes and Company for all those years for which there has been no audit at all. Since, we are not very sure about the possible difficulties that may be faced by the auditor in auditing club accounts for all those years, we requested the Senior partner of M/s. Lovelock and Lewes and Company to be present in Court, so that upon hearing him necessary direction could be made upon the respective parties for facilitating the auditing of the club accounts for all these years. Since, it is not in dispute that the club accounts have not yet been audited since 1990 and the learned Counsel appearing on behalf of the appellants who are the existing President and the General Secretary of the club and in particular the General Secretary of the club is a Chartered Accountant by profession and further it has been submitted on his behalf in course of hearing that the internal accounting has already been completed for all these years since 1990, we direct the General Secretary of the club, namely, Mr. Anjan Mitra to produce before the auditor all Books of Accounts and all other necessary documents and papers in support of such internal accounting of the club accounts for all these years 1990 to the competent person that may be nominated by the Auditor namely M/s. Lovelock and Lewes and Company. For the above purpose, the General Secretary of the club will give prior intimation in writing to Lovelock and Lewes and Company by fixing a date for the presence of the nominated person of the Auditor in the club office. It is made clear that such part of the function shall in any event be completed within a period of four weeks from date. It is also made clear that such club accounts since the year 1990 shall be produced by arranging documents since 1990 year wise and by making proper index for each year. It is made clear that such part of the function shall in any event be completed within a period of four weeks from date. It is also made clear that such club accounts since the year 1990 shall be produced by arranging documents since 1990 year wise and by making proper index for each year. It is needless to mention that unless club accounts since the year 1982- 83 are audited auditing of the Club's Accounts since 1990 cannot be properly and effectively made. We, therefore, direct the General Secretary of the club to similarly produce the club accounts for all those years since 1982-83 till before 1990 within the same period by arranging the same year wise and by making index for the same in respect of each year separately. M/s. Lovelock and Lewes Company upon scrutiny of all such papers and accounts of the club, will be at liverty to seek further orders and directions, if necessary, in this regard." 3. ANALYSIS of the said order dated August 18, 2005 reveals that the Division Bench noted the fact that the club accounts had not been audited since 1983. 'The Division Bench also noted that there might be unforeseen difficulties in auditing the accounts. The Division Bench in a later part of the order observed that the audit was not done since 1990, although the club was being run by the General Secretary who happened to be a Chartered Accountant. 4. AFTER observing as above, the Division Bench gave the following directions: i) Club accounts since 1990 shall be produced by arranging documents since 1990 year wise and by making proper index for each year. ii) Club accounts for the years since 1982-83 till before 1990 to be produced. iii) Lovelock and Lewes upon scrutiny of all such papers would be at liberty to seek further orders and/or directions, if necessary. According to the club authority, as we find from the affidavit of Shri Anjan Kumar Mitra the General Secretary, the auditing process was on as on October 3, 2008 when he filed the affidavit. All the accounts for the year 2005-06 onwards had already been audited and had been passed by the members in the respective Annual General Meetings. With regard to the backlog Mr. All the accounts for the year 2005-06 onwards had already been audited and had been passed by the members in the respective Annual General Meetings. With regard to the backlog Mr. Mitra contended in his affidavit that he complied with the direction of the High Court and sent all documents by arranging those year wise through a forwarding letter dated September 30, 2005. He also requested M/s. Lovelock and Lewes to depute and/or nominate representative for inspection of the records. According to him, these applications were nothing but an attempt to forestall the election process. 5. IN this backdrop we heard three applications assigned to us by the Hon'ble Chief Justice. 6. LET us have a brief analysis of the applications. i) CPAN No. 492 of 2008 :- This application was filed alleging contempt of Court being committed by the Secretary and other officials of the club as, according to the applicant, they utterly violated the order of the Division Bench dated August 18, 2005 by not having accounts of the club audited through M/s. Lovelock and Lewes and Company by providing them necessary documents and records as directed by this said order. ii) CAN No. 6178 of 2008 :- This application was also filed by the same applicant, inter alia, praying for a direction upon M/s. Lovelock and Lewes to file a report regarding the steps taken by them in terms of the order dated August 18, 2005 and for appointment of an administrator to take over relevant papers, documents, book of accounts of the club for the purpose of auditing as also for appointment of an independent Chartered Accountant as Special Officer to collect records from the club and hand over the same to the auditors in terms of the order dated August 18,2005. iii) CAN No. 8901 of 2008 :- This application was also filed by the same applicant, inter alia, praying for stay of the proceeding initiated by the Secretary of the club in respect of ensuing election till the accounts were audited by the auditor as also pass interim orders appointing administrator over the club. Mr. Kalyan Kumar Bandyopadhyay, learned Senior Advocate, appearing for the applicant did not press CAN No. 8901 of 2008, as such, we refrain from dealing with the same. 7. MR. Bandyopadhyay also did not seriously press the contempt application. 8. Mr. Kalyan Kumar Bandyopadhyay, learned Senior Advocate, appearing for the applicant did not press CAN No. 8901 of 2008, as such, we refrain from dealing with the same. 7. MR. Bandyopadhyay also did not seriously press the contempt application. 8. HE made elaborate argument on CAN No. 6178 of 2008 and prayed for appointment of administrator over the club as, according to him, the management utterly failed to assist the auditor in auditing the accounts amounting to violation of the direction of the Division Bench dated August 18, 2005 so issued in deference to the desire of the Apex Court as contained in the order dated July 15, 2005. Elaborating his argument, Mr. Bandyopadhyay contended that from time to time correspondences were exchanged wherefrom it would appear that the management utterly failed to provide records to M/s. Lovelock and Lewes and, as a result, the Chartered Accountant could not audit the accounts. In this regard he referred to page 42-43 of the petition being CAN No. 6178 of 2008 and contended that the documents mentioned therein were not handed over despite repeated request. The present management of the club deliberately withheld those documents and refused to give access to the same on one pretext or the other. 9. OPPOSING the applications, Mr. Ajoy Krishna Chatterjee, learned Senior Advocate appearing for the club authorities including the Secretary contended that the applications were filed one after the other to frustrate the regular process of running the club. He contended that the order was passed in 2005 whereas the present applications were filed in 2008 just on the eve of the election of office bearers with an attempt to forestall the same. Mr. Chatterjee contended that whatever documents the present management had, were handed over to the Chartered Accountant who, in turn, was supposed to audit the accounts. Mr. Chatterjee also contended that the present management took charge since 2005 and all the accounts for the current years were duly audited and passed in the Annual General Meetings. The accounts were audited for the period ended March 31, 2009. In this regard he also referred to the correspondence annexed to the pleadings to show that the Secretary was cooperating with the auditor as and when such co-operation was asked for. 10. WE have considered the rival contentions as also the correspondence exchanged between the parties. The accounts were audited for the period ended March 31, 2009. In this regard he also referred to the correspondence annexed to the pleadings to show that the Secretary was cooperating with the auditor as and when such co-operation was asked for. 10. WE have considered the rival contentions as also the correspondence exchanged between the parties. The Apex Court observed that the account should be audited. The Division Bench asked the Chartered Accountant to audit the accounts. The Division Bench also granted liberty to the Chartered Accountant to ask for clarification and/or directions, if required. Admittedly, the Chartered Accountant did not approach this Court up till date, at least Mr. Arunava Sarkar appearing for the concerned Chartered Accountant did not claim as such. From the correspondence it appears that M/s. Lovelock and Lewes expressed their inability to take up the job unless the records were made available. In this regard we may refer to the letter of M/s. Lovelock and Lewes addressed to their own Advocate-on-Record dated July 12, 2007 and the letter written to the Secretary of the club dated January 6, 2006 giving a detailed list of documents which were produced by the accountant as also another list indicating documents which they wanted. The club authority furnished some of the documents and expressed their inability to furnish more due to non-availability of books for the earlier years. In course of hearing the parties also disclosed some current correspondence which included balance sheets for the current years. WE also find that internal audit was done since 1990 and all the balance sheets were signed by the applicant as Assistant General Secretary of the club. The said period included accounts for the period July 8, 1990 to March 31, 2003. In 2003-04 the football affairs of the club was being looked after by Special Officers appointed by this Court. The Special Officers also got their accounts audited as would appear from the audit report dated August 10, 2006 filed in Court. On a sum total we do not find any reason why the auditor M/s. Lovelock and Lewes could not complete the job, at least from 1990 onwards. If any document is wanting, the auditor is at liberty to make comment on the same in its report. The club in the recent correspondence made it clear that they did not have any other document in their possession. If any document is wanting, the auditor is at liberty to make comment on the same in its report. The club in the recent correspondence made it clear that they did not have any other document in their possession. The auditor should proceed on that basis. We do not find any contempt being committed by the alleged contemnors. We also do not find any scope to consider the prayer of the applicant for appointment of administrator. 11. WE once again, at the risk of repetition, point out that there was no lis pending before us. Applications were made in a disposed of appeal although liberty was given only to the auditor to seek clarification and/or direction. WE are unable to find out the scope of maintainability of the application being CAN No. 6178 of 2008. 12. The applications fail and are hereby dismissed. There could no order as to costs. 13. URGENT xerox certified copy will given to the parties, if applied for.