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Shardul Shroff statement on Amarchand CLB rebuke: ‘Partner acted responsibly’, client not harmed, affidavits explained

Amarchand Mangaldas Delhi managing partner Shardul Shroff has released a statement explaining the events surrounding the Company Law Board (CLB) imposing a fine of Rs 50,000 and justifying the termination of employment of two allegedly responsible associates, as reported by Legally India yesterday.

The two associates were not reachable for comment at the time of going to press after repeated attempts by Legally India to contact them.

Shroff said in his emailed statement:

1. The Firm is internally reviewing the order of the Hon’ble Company Law Board delivered on 17th of August, 2012 in the matter of Rupak Gupta vs. Banaras House Private Limited. The issue relates to the affidavits in support of a petition, which were deposed to and affirmed before the two notary publics and the deponents were allegedly identified by an associate level retainer.

2. In the first instance the affidavits with the Petition had blanks without stating which paragraphs were based on knowledge and which paragraphs were based on information received.

3. The Company Petition as supported by the incomplete affidavit(s) was, therefore, lying in objection. In order to complete the verification and recordal of the clauses, subsequent affidavits were filed, which were also inaccurate, in that, though the affidavits were affirmed by the general Power of Attorney of the Petitioners, they were still made in the name of the Petitioners and as if the Petitioners were signing.

4. The two associates involved did not take care to ensure that the name of the deponent and the signatory matched. This mistake of signing the affidavit as Petitioner(s) without identifying himself as a general Power of Attorney holder was erroneous and identification by the associate level retainer was also erroneous. The associate admitted the mistake contemporaneously in writing. That is why fresh affidavits were filed with an application before the Hon’ble Company Law Board subsequently.

5. This is a serious mistake on the part of the two associates involved and as soon as this was noticed by the partner on the 6th of August, 2012, an application was filed on the 7th of August to place on record freshly signed and affirmed affidavits. Importantly the petitioners did not repudiate the petition or the affidavits or his general Power of Attorney holder.

6. In identifying the deponent and signatory, the associate level retainer represented himself in his capacity as an advocate identifying the deponent. The firm does not sign or identify deponents of affidavits before any notary public. Individual lawyers present themselves before the Oath Commissioner or Notary Public when they know the deponent and the advocate makes the deponent’s identification.

7. The Firm has always stood for the highest standards of professional practice and integrity and professionalism and has had an unblemished record. This is an unfortunate case where two individuals have not applied themselves, not been diligent and have by their carelessness jeopardized the interest of the client and the Firm. Upon the judgement being received at the level of the Senior Management, the Firm has taken strict action against two associates and have terminated their retainership with immediate effect for their failure to maintain the highest standards required.

8. The Firm’s partner acted responsibly upon the associate accepting the mistake in writing and immediately sought rectification and an application was filed with the Hon’ble Company Law Board for placing fresh affidavits on 7th August, 2012. No undue benefit as a result of the earlier affidavits had accrued to the Petitioner nor any undue prejudice has been caused to the Respondents as no interim reliefs were granted.

9. The Hon’ble Company Law Board has permitted the re-filing of a properly constituted fresh Petition. The client has instructed the Firm’s partner to refile the petition.

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