UNION OF INDIA Vs. HIMACHAL FUTURISTIC COMMUNICATIONS LTD.

JUDGEMENT

(1.) Cav. No. 161/2013 (Caveat)

(2.) EXEMPTION allowed subject to all just exceptions.

(3.) ACCORDINGLY on 16.10.2001, a Share Purchase Agreement (SPA) was entered into between the appellant, HFCL and HTL. It is not in dispute that HFCL paid a sum of Rs. 55 crores to the appellant pursuant to this SPA. M/s. S.R. Batliboi & Co. was appointed as Auditor for preparing the closing date statement and in terms of their report, the HFCL submitted a claim of Rs. 3803.36 lakhs from the appellant on the basis that the net assets of HTL had become Rs. 607.68 lakhs as on 16.10.2001 as against Rs. 5747.36 lakhs as on 31.03.2001. However according to the appellant, since some advisory service had been rendered by the said Auditors to HFCL in the past and there being a conflict of interest, M/s. Ray and Ray, Kolkata was appointed for preparing the closing date statement. They submitted their final report on 07.08.2002 in terms of which on the closing date Net Asset Amount (NAA) was ( -) Rs. 1886.57 lakhs as on 16.10.2001 instead of Rs. 5747.36 lakhs as on 31.03.2001; the reduction in NAA was therefore ( -) Rs. 7633.93 lakhs.