After initiation of CIRP, dues of the earlier audit can be included as the Operational Credit with respect to the Corporate Debtor and the Auditor need to issue NOC as well as transfer the necessary papers to the newly appointed auditor – RP (In the matter of Orchid Pharma) Vs. Lakshmi Vilas Bank & Orchid Pharma Ltd – NCLT Chennai Bench
The CIRP of Orchid Pharma Limited commenced on 17 August, 2017. The shareholders passed a resolution for the appointment of M/s. CNGSN & Associates LLP as the statutory auditor for a period of five years commencing on 1 April, 2017. However, the erstwhile auditor was not willing to give NOC unless the Resolution Professional cleared 50% of its outstanding dues. NCLT held that the earlier auditor, M/s SNB Associates, is directed to issue NOC as well as transfer the necessary papers to the newly appointed auditor of the corporate debtor, M/s. CNGSN & Associates. It has been noted by this tribunal that the dues of the earlier audit has been admitted to the extent of Rs.1,23,69,272 and it has been included as the operational credit with respect to the corporate debtor.