Council Of Institute Of Chartered ... vs K.K. Gupta, Fca And Anr.
2007 Latest Caselaw 1846 Del

JUDGMENT

S. Muralidhar, J.

1. This reference under Section 21(5) of the Chartered Accountants of India Act, 1949 ('Act') is in respect of Respondent No. 1 who is a Chartered Accountant. A complaint was made by Rohit House Occupants Welfare Association against Respondent No. 1 on several counts. One of the grounds was that the Respondent, who was an auditor of the complainant for the financial years 1997-98 and 1998-99 had also written the books of account of the complainant for those very financial years thus compromising his independence as as a professional Chartered Accountant. The complaint listed out other specific instances of the Respondent having either failed to or having been grossly negligent in the discharge of his duties as a Chartered Accountant.

2. It is stated by the Petitioner, the Institute of Chartered Accountants of India ('ICAI'), that despite a copy of the complaint having been sent to Respondent No. 1 on 10th January, 2001 and a reminder on 18th February, 2002 requesting him to send his written statement, Respondent No. 1 did not respond. Thereafter, in terms of Regulation 12(11) of the Chartered Accountants Regulations, 1988 the Council of the ICAI considered the complaint at its meeting held in April 2003 and formed a prima facie opinion that the Respondent No. 1 was guilty of professional and/or other misconduct. The case was referred to the Disciplinary Committee ('Committee') for enquiry.

3. The case was fixed for hearing before the Committee on 5th November, 2003. Despite notice being sent to Respondent No. 1, he did not appear before the Committee on that date. The enquiry was therefore completed ex parte. On 4th February, 2004 the Committee submitted its report in which it expressed an opinion that the Respondent No. 1 was guilty of professional misconduct within the meaning of Clauses 6, 7, 8 and 9 of Part I of the Second Schedule to the Act. It was opined that Respondent No. 1 was also guilty of "other misconduct" under Section 22 read with Section 21 of the Act.

4. A copy of the report was forwarded to both parties on 27th May, 2004 and they were informed that it would be considered in the forthcoming meetings of the Council. They were requested to send their written comments and if, they so desired, to appear before the Council. By a letter dated 9th June, 2004 the parties were informed that the report of the Disciplinary Committee could be considered by the Council on 25th June, 2004. A further intimation was sent on 6th July, 2004 that the report would be considered at the next meeting of the Council on 22nd July, 2004. Despite these communications neither the complainant nor the Respondent No. 1 responded. Neither sent any representation.

5. At the meeting held between 20th and 23rd July, 2004, the Council considered and accepted the report of the Disciplinary Committee. It decided to recommend to this Court that the name of the Respondent No. 1 be removed from the Register of Members for a period of one year. Thereafter, in terms of Section 21(5) of the Act, the case was forwarded to this Court.

6. Notice was directed to issue to both Respondent No. 1 and the Central Government Respondent No. 2 by this Court on 14th November, 2005. Fresh notice was further directed on 9th October 2006 and 16th July, 2007. dusty service was also permitted. An affidavit of service has been filed confirming that service on Respondent No. 1 is complete. However, at the final hearing on 19th September, 2007 none appeared for Respondent No. 1 despite the case having been called out twice.

7. On a perusal of the records, this Court finds that the Disciplinary Committee was justified in its conclusion that the Respondent No. 1 was guilty of professional misconduct and other misconduct as indicated in its report. The averments made in the complaint having been supported by sufficient material, the Committee concluded that it was established that Respondent No. 1 had violated the code of conduct governing the members of the ICAI.

8. This Court finds no infirmity in the conclusion arrived at by the Committee which has been accepted by the Council. Accordingly, the recommendation made by the Council of ICAI that the Respondent No. 1 be removed from the Register of its Members for a period of one year is hereby accepted and it is so directed.

9. The reference is disposed of.