Hello friends,
please refer to July 2015 (21st Edition) of Corporate and allied laws by CA Munish Bhandari sir book.
Subject Matter. : appointing a representative to insepct the books of accounts on behalf of director
Section : Section 128 of companies Act, 2013
Go to PAGE No. 2.4 -- practical problem No. : P2B - It is given that, author does not agree with answer given in practice manual of ICAI. Author says for appointing a representative to insepct the books of accounts on behalf of director prior approval is not required however ICAI says that approval of board is required.
The ground used by Author are, there is no such provision of obtaining approval of the board of directors in the Act, or In its Rules, 2014 or any decision of the court. However, in the given case Vakharia V Supreme General Film Exchange Co. Ltd (1948), it is clearly stated that, "a director is entitled to inspect personally or through an agent PROVIDED THERE IS NO OBJECTION to the persona choosen. Further as per another case given in the next para says that, the right can be refused also if it is found that the information is passed on to rival of the company.
Confusion : even though it is not clearly stated that the approval is required, the words "provided there is no objection" clearly says that there should be unanimous approval to the inspection of accounts through the representative.
ICAI view : Approval required.
Munish Bhandari Sir's View : Approval not required.
So which view is correct???
CAclubindia
