Set back to Ramalinga Raju in a revision petition against Auditor Firm
HYDERABAD: In a setback to B. Ramalinga Raju, the then CMD of Satyam Computer Services Limited, the Telangana High Court dismissed a civil revision petition filed by him against PricewaterhouseCoopers (PwC) on damages of Rs 100 crore .
PWC was the chartered accountant firm for Satyam Computer till 2009. The frauds committed by Raju and the company’s other directors included false invoices, invention of customers, creation of false bank records, summary of false financial records and reporting. The PwC filed a suit at Ranga Reddy court praying for directions to Raju and Satyam Computers to pay minimum damages `100 crore with 18 per cent annual interest from the date of judgment and decree till the payment or realisation.
PwC had alleged that Raju had deceived them and his deceitful conduct had severely impacted their professional practice and they had lost many clients from India and abroad. Hence, the plea for damages, PwC counsel said.
Challenging it, Raju filed an interim application before the trial court stating that the relation between Satyam Computer and its CA was not a contract. He requested the court under Order VII Rule 11(d) of CPC to reject the plaint on the ground that mandatory provisions and requirements under Section 69 of the Partnership Act, 1932 have not been complied and therefore the suit was not maintainable. He said that PwC, a partnership firm, is not registered in India.
Although, the trial court rejected his interim application, the one regarding the `100 crore damages is pending before it. Aggrieved by that, he filed a revision petition before the High Court.
The division bench, comprising Justice P. Naveen Rao and Justice Nagesh Bheemapaka, dismissed Raju’s revision petition and upheld the trial court decision in the interim application.
‘There is no scope to assume contractual relationship between Satyam Computer and its CA as sought to be urged by Raju. Such an assumption is contrary to statutory scheme and the role of an auditor. Therefore, section 69(2) of Partnership Act is not attracted’, the bench made it clear.
