Delhi High Court
Council Of The Institute Of ... vs Deepak Jain & Anr. on 4 August, 2016
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
RESERVED ON: 23.05.2016
% PRONOUNCED ON: 04.08.2016
+ CHAT.A.REF.2/2014
COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF
INDIA ..... Petitioner
Through: Mr. Rakesh Agarwal and Mr. Pulkit
Agarwal, Advocates.
Versus
DEEPAK JAIN & ANR. ..... Respondents
Through: Mr. Ashish Makhija and Ms. Isha Jha,
Advocates for Resp-1 along with Resp-1 in person.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MS. JUSTICE DEEPA SHARMA
S.RAVINDRA BHAT, J.
1. This judgment is upon a reference made to this Court under Section
21 of the un-amended Chartered Accountants Act, 1949, seeking imposition
of penalty against the respondent.
2. The facts relating to the reference are that in a complaint, duly verified
on 21st March, 2005, one Dharam Vir Yadav of M/s. Nirvan Services/Nirvan
Travels (referred to hereafter as the "Complainant") leveled the following
allegations against Chartered Accountant, Deepak Jain, M/s. Jain Deepak &
Co. (the respondent, referred to as such, hereafter). The complainant had
entrusted the job of depositing Service Tax to the Respondent for which he
CHAT A. REF.2/2014 Page 1
used to pay him the professional fees. The Respondent used to collect the
amount of Service Tax in Cash/Pay Orders on behalf of the Complainant's
Company i.e. Nirvan Services and Nirvan Travels to deposit in the Service
Tax account for both the companies at Punjab National Bank, Lawrence
Road, Delhi in the Service Tax Account No.DL-1/ST/M&R/35/NS2003
(Nirvan Services) and DL-1/TO/648/ST//2001) (Nirvan Travels) at the end
of the month. The Respondent also used to file returns of the Complainant
on behalf of the Company. It was alleged that he always used to give
photocopies of the Challans deposited in the Bank. The complainant had
been demanding the Original Challans from the Respondent, which he never
gave on one pretext or the other. On becoming a little suspicious, the
Complainant insisted upon payment of entire Service Tax amounts through
DD/Pay orders. The Respondent advised the Complainant to give the
Service Tax amount in form of DD/Pay Order favouring PNB, Lawrence
Road for which he used to give the service tax challans' copies of the same
amount as deposited in PNB, Lawrence, Road. Thereafter, on repeated
demand of the originals the respondent handed over the original challans, in
October 2004. After seeing the entries made in these challans, the
complainant got suspicious, particularly about overwritings and amended
figures. Further when, the Complainant verified from Punjab National Bank,
Lawrence Road, it was found that the actual amount paid in the form of
Service Tax was not the same as the amount collected from the
Complainant.
3. The complainant alleged that it found, on enquiry, it was found that the
payments made through demand draft in favour of PNB, Lawrence Road
CHAT A. REF.2/2014 Page 2
were credited in the Current Account of M/s. Shakti Agencies with unlawful
assistance from the PNB bank employees. Mr. Vishal Jain, brother of
Deepak Jain is proprietor of Shakti Agencies. These entries were confirmed
as well by the issuing Banks, i.e., Oriental Bank of Commerce and Indian
Bank. It is understood that employees of PNB, Lawrence road had been a
party to assist the Respondent to carry out this fraudulent activity by which
loss to the Government amounted to `47,34,278.00. When the complainant
detected the fraud, the Respondent admitted his fault and promised to pay
the entire amount to the Government with interest and penalty.
4. The complainant alleged that the respondent used to maintain two
files in respect of Service Tax for the companies- one for filing the Service
Tax to the Govt., with less amount as actual paid (Forged figure) and other
one to show to the Complainant that he has paid all the money as Service
Tax confirming the money collected from the Complainant's Company. This
fraud was carried out in connivance with PNB, Lawrence Road. The
Manager/ Cashier accepted these challans without writing the amount in
figures and also credited the DD/Pay Orders in the particular account of M/s.
Shakti Agencies CA No.15390021000444667, giving enough opportunity to
the Respondent to modify the amount and put the Central Excise &Taxation
Department of Govt. of India to loss. The particulars of the complaint as
filed in Complaint Form 8 have been filed as Annexure "A" to the
complaint. The Council, on receipt of complaint, elicited the respondent's
reply.
5. The Respondent in his Written Statement submitted in the matter that the
dispute has been sorted out and an M.O.U. has already been signed and the
CHAT A. REF.2/2014 Page 3
matter is pending before the Punjab and Haryana High Court, for quashing
of the F.I.R. The Complainant in his rejoinder on the said Written Statement
of the Respondent stated that no compromise has been reached with the
Respondent in respect of the instant complaint lodged with the Institute,
although a Memorandum of Understanding has been signed mutually in
order to recover the embezzled amount from the Respondent. The
Complainant along with the said reply dated 22.08.2005 also enclosed a
letter issued from the office of the Assistant Commissioner of Service Tax,
which clearly stated that the Respondent has committed similar fraudulent
activities with other parties as well. The said letter from the Office of the
Assistant Commissioner of Service Tax dated 02.04.2005 has been written
to the Station House Officer, Police Station, Gurgaon wherein inter-alia it
has been stated that the Respondent has cheated two other Companies which
were registered with the Service Tax Department by not depositing the
proper Service Tax amounting to `86,550/- during the period 01.07.2002 to
31.03.2003. The reply was sent to the Complainant for his rejoinder. The
Complainant in reply gave certain additional submissions along with
documents/papers, which was forwarded to the Respondent on 07.02.2006;
they were followed up with reminders dated 31.08.2006, 17.08.2007 and
28.05.2008. The Respondent failed to submit anything. Subsequently, in
compliance with provisions of Regulation 12(11) of the Chartered
Accountants Regulations, 1988, the material was considered by the Council
at its meeting held in November 2008 at New Delhi. The Council was prima
facie of the opinion that the Respondent was guilty of professional and/or
other misconduct, and decided to cause an enquiry to be made in the matter
by the Disciplinary Committee. The committee held meetings in connection
CHAT A. REF.2/2014 Page 4
with the matter on three occasions, i.e., 03.06.2010, 24.06.2010 and
19.01.2011.
6. The Council's Disciplinary committee considered the reply and the
rejoinder as well as the materials furnished further by the complainant
including the M.O.U entered into between the Complainant and the
Respondent whereby it was mutually agreed that the Respondent would give
to complainant, `47,34,278.00/-, out of which `30,59,800/-(`17,34,278.00/-
in cash and `13,25,522/- by Bankers Cheque) has been paid by the
Respondent to the Complainant at the time of signing of the M.O.U. and
remaining amount of `5,00,000/- will be paid on or before quashing of the
FIR NO.33/2005.Thus on perusal of the M.O.U, the Committee was of the
view that there was a clear admission by the Respondent about the act of
cheating the Complainant by forging the service tax challans and the
Respondent had agreed to refund the money embezzled and in return, the
Complainant undertook to do all that was necessary to assist in quashing the
first information report (FIR no.33/2005) to ensure that no trial would be
faced by him. The Committee also noted that the Punjab and Haryana High
Court dismissed the petition filed by the Respondent for quashing of FIR No
33/2005 dated 21.01.2005. A copy of the said judgment dated 12.12.2005
has also been made available on record. It stated that some of the offences
are non-compoundable in nature as a result of which the FIR could not be
quashed.
7. The Committee held that the respondent was guilty of "other
misconduct". Its reasoning is as follows:
CHAT A. REF.2/2014 Page 5
"...The Committee noted that the Respondent used to collect amount
of service tax cash/pay orders on behalf of the company to deposit in
the service tax account for both the companies at Punjab National
Bank, Lawrence Road, Delhi for which the Respondent used to give to
the Complainant the copies of the service tax challans of the same
amount as deposited. As per the Complainant, the DD/ pay orders
were made favoring PNB Lawrence Road, Delhi on the advise of the
Respondent. On receiving the original challans ,it was noticed that in
the original service tax challans, the actual tax of much lower amount
was paid and the same were tampered with by additions/amended
figures and overwriting .The forged copies of the said original
challans were given to the Complainant to justify the heavy amount so
collected wrongly in form of cash/pay orders to cheat him .The said
act of cheating and forgery is clearly evident on comparing the
challan copies as actually deposited and the forged copies as handed
over to the Complainant. On the other hand, the DD/pay orders so
received from the Complainant were credited in the Current account
of M/s Shakti Agencies (CA no 44667) with unlawful assistance of the
PNB Lawrence Road employees. The Complainant has provided on
record the copies of the various demand drafts given to the
Respondent along with their corresponding pay in slips whereby the
same was deposited in the account of M/s Shakti Agencies (CA no
44667) whose proprietor was the brother of the Respondent. The
Committee also noted that at the back of the pay-in-slips, it has been
mentioned as below:-
"PO in question pertains to M/s Shakti Agencies. Please afford
the credit in our account, we have given the issuing authority,
our banker as PNB, Lawrence Road".
12. The Committee is also convinced that the said fraud could not
have been carried out without connivance with the PNB, Lawrence
Road Manager/ Cashier who was accepting these challans without
writing the amount in figures and also crediting the DD/Pay Orders
CHAT A. REF.2/2014 Page 6
in the particulars account of M/s. Shakti Agencies CA No.
15390021000444667.
13. The Committee also noted the conduct of the Respondent in this
matter before the Institute/Disciplinary Committee as well. The
hearing in the matter was fixed twice before it was concluded. First
time, the meeting got cancelled and second time in June 2010, the
Respondent sought adjournment on pretext of professional
engagement .Thereafter, the matter was fixed after a gap of 6 months
in January 2011 whereat the Respondent and /or his authorized
representative failed to appear before the Committee at the scheduled
time. After the conclusion of the hearing, the authorized
representative of the Respondent appeared before the Committee
making a request to adjourn the matter for next hearing on the
grounds that some more time is needed for preparation of the case.
The Committee was however astonished at the casual approach so
adopted by the Respondent while dealing in the matter wherein
allegations of grave and serious nature have been alleged against him
and instead of coming forward to defend his case and rebut the
charges, he was trying to seek further time. The Committee noted that
the instant matter pertains to the year 2005 and considerable time has
elapsed and sufficient opportunity has been granted to the Respondent
to prove his defence but the Respondent instead failed to give duly
verified Comments despite repeated reminders at the prima facie
stage and thereafter failed to appear before the Disciplinary
Committee despite the fact that the hearing fixed in June 2010 was
adjourned at his instance to afford him another opportunity to submit
his defence in the interest of natural justice. The Respondent,
however, did not appear but sent his counsel who informed the
Committee that the Respondent contacted him a day before the
meeting itself and thus he needed time for preparation. The
Committee apprised him of the M.O.U entered into by the Respondent
with the Complainant stating that it leaves no room for further
arguments. The Committee, however, offered the Counsel of the
CHAT A. REF.2/2014 Page 7
Respondent time till evening to study the papers and prepare the case,
which he declined. Thereafter, the Committee directed the Counsel for
the Respondent to give his defence in writing; to reach the Office of
the Institute which shall be considered by the Committee while
preparing its report in the matter. However till date nothing has been
received from his end which itself speaks about the casual and
disrespectful approach adopted by the Respondent in dealing with the
Institute.
14. The Committee, however, is of the opinion that the role of the
Respondent in the alleged forgery has been clearly observed which
was done with the sole purpose of the embezzlement of funds of the
Complainant given for the purpose of depositing service tax- modus
operandi adopted by the Respondent has been explained in preceding
paras. The Committee also observed that the Respondent thus not
only failed miserably to work honestly and diligently as a professional
but also misused the faith bestowed upon him by his client. The
Respondent in connivance with the staff/employees of the PNB,
Lawrence Road involved himself in such highly derogatory and
criminal acts of embezzlement, cheating, forgery etc. The said conduct
of the Respondent is highly unbecoming of the Chartered accountant
and has brought disrepute to the profession. The Committee thus
holds the Respondent guilty of 'Other Misconduct' under section 22
read with section 21 of the Chartered Accountant Act 1949."
8. Mr. Ashish Makhija learned counsel for the respondent argues that the
findings of the Council are baseless and unreasonable in view of withdrawal
of complaint by the Complainant and the Memorandum of Understanding
executed between the parties. The Council, it is urged, erred in holding that
in absence of any provision in the Chartered Accountant Act, 1949 ("the
Act"), the complaint cannot be withdrawn. The Council, it is stated failed to
consider that the basis of the complaint proceedings became non-existent in
CHAT A. REF.2/2014 Page 8
view of the withdrawal letter dated 12.04.2012 of the Complainant as well
as the Memorandum of Understanding dated 12.05.2005 and 16.04.2012
between the complainant and respondent. Counsel relies on Institute of
Chartered Accountants of India vs. K.K. Sindwani & Anr, [2013] 218
TAXMAN 17 (P&H)and Institute of Chartered Accountants of India vs.
Vijay Kumar & Anr [2013] 219 TAXMAN 53(P&H) that once a
compromise to end the dispute is arrived at between a complainant and a
chartered accountant, disciplinary proceedings do not survive.
9. It is urged that the proceedings culminating in findings adverse to the
respondent are illegal and violative of principles of natural justice because
the Council failed to consider the written statement/submissions dated
16.10.2012 and the crucial arguments of the counsel for the Respondent.
Further, the Petitioner also ignored and brushed aside the substantial
submission made by the Complainant in its written reply dated 21.03.2013
wherein it was specifically admitted by the Complainant that he was under
mistaken belief as to the conduct of the Respondent and that all the FIRs
lodged were cancelled or quashed by the respective courts. Learned counsel
stressed on the express terms of the compromise/MOUs dated 12.05.2005
and 16.04.2012 recorded between the parties, i.e., the complainant and the
respondent stating that the latter was absolved of all allegations of
wrongdoing and that the complainant withdrew such allegations.
10. It is urged that the Council fell into error in holding that the burden of
proving innocence was placed on the respondent, which is contrary to
established canons of procedure. It is also argued that the charges alleged
against the respondent were not proved beyond reasonable doubt. Being
CHAT A. REF.2/2014 Page 9
quasi criminal proceedings the result of which can severely affect the
professional reputation of a chartered accountant, the higher burden of proof
was required. Here reliance is placed on H.V. Panchaksharappa v K.G.
Eshwar, AIR 2000 SC 3344 and Council of The Institute of Chartered
Accountants of India vs. C.H. Padliya and Another, 1977 MPLJ 722.
11. The findings of the Council are that the respondent's attitude was
casual and he did not take the burden to defend himself. It is submitted that
even if the Respondent did not produce some material evidence to defend
himself, that would not lead to the inference that the charges against him
were proved. Reliance is placed on the Institute of Chartered Accountants of
India H.S. Ghia, 2005 [107(1)] Bom LR 297 and Institute of Chartered
Accountants of India vs. K.K. Sindwani & Anr (supra).
12. For the council, Mr. Agarwal argued that there was no question of
compromise. It was stressed that the complainant attended the hearing and
deposed in the case on 19.01.2011. The respondent was absent and his
counsel indulged in delaying tactics. He did not cross examine the
complainant, who clearly deposed about the nature of the loss incurred by
him. It was urged that the details and particulars of the amounts deposited,
the relative challans, and the amounts actually payable were not in dispute;
they could not be, because not only were they a matter of record, but that
they were the subject of criminal charges. The attempt of the respondent to
have the criminal proceedings quashed, were unsuccessful. Therefore, the
Committee's recommendations- which were accepted by the Council, with
respect to "other misconduct" could not be lightly set aside.
13. It is argued that in none of the MoUs dated 12.05.2005 or 16.04.2012
CHAT A. REF.2/2014 Page 10
is there any reference to the complaint made by the complainant against the
respondent No. 1. In any case, it is stated that the complainant or the parties
cannot avoid the disciplinary proceedings by entering into a private
settlement and more so when serious allegations of fraud were leveled by
the complainant against the Respondent No.l. It is further submitted that the
petitioner being a regulatory body was enquiring into the conduct of one of
its members, the Respondent No.l. It is further submitted that the petitioner
is under obligation to maintain status and standard of professional
qualifications of its members. It is also urged that there is no provision in the
Act for withdrawal of the complaint. Furthermore, it is submitted that in
case a complaint containing serious allegations of fraud is allowed to be
withdrawn simply because monetary disputes between the accountant
member and the complainant are settled, it would render the disciplinary
mechanism of the Act meaningless.
Analysis and Conclusions
14. The relevant provision of the Act, dealing with procedure to deal with
misconduct, reads as follows:
"21. Procedure in inquiries relating to misconduct of members of
Institute
(1) Where on receipt of information by, or of a complaint made to it,
the Council is prima facie of opinion that any member of the Institute
has been guilty of any professional or other misconduct, the Council
shall refer the case to the Disciplinary Committee, and the
Disciplinary Committee shall thereupon hold such inquiry and in such
manner as may be prescribed, and shall report the result of its inquiry
to the Council.
CHAT A. REF.2/2014 Page 11
(2) If on receipt of such report the Council finds that the member of
the Institute is not guilty of any professional or other misconduct, it
shall record its finding accordingly and direct that the proceedings
shall be filed or the complaint shall be dismissed, as the case may be.
(3) If on receipt of such report the Council finds that the member of
the Institute is guilty of any professional or other misconduct, it shall
record a finding accordingly and shall proceed in the manner laid
down in the succeeding sub-sections.
(4)Where the finding is that a member of the Institute has been guilty
of a professional misconduct specified in Schedule 1, the Council
shall afford to the member an opportunity of being heard before
orders are passed against him on the case, and may thereafter make
any of the following orders, namely,-
(a) reprimand the member;
(b) remove the name of the member from the Register for such period
not exceeding five years, as the Council thinks fit:
PROVIDED that where it appears to the Council that the case is one
in which the name of the member ought to be removed from the
Register for a period exceeding five years or permanently, it shall not
make any order referred to in clause (a) or clause (b), but shall
forward the case to the High Court with its recommendations thereon.
(5) Where the misconduct in respect of which the Council has found
any member of the Institute guilty is misconduct other than any such
misconduct as is referred to in sub-section (4), it shall forward the
case to the High Court with its recommendations thereon.
(6) On receipt of any case under sub-section(4) or sub-section(5), the
High Court shall fix a date for the hearing of the case and shall cause
notice of the date so fixed, to be given to the member of the Institute
CHAT A. REF.2/2014 Page 12
concerned, the Council and to the Central Government, and shall
afford such member, the Council and the Central Government an
opportunity of being heard, and may thereafter make any of the
following orders, namely ,-
(a) direct that the proceedings be filed, or dismiss the complaint, as
the case may be;
(b) reprimand the member;
(c) remove him from membership of the Institute either permanently
or for such period as the High Court thinks fit;
(d) refer the case to the Council for further inquiry and report.
(7) Where it appears to the High Court that the transfer of any case
pending before it to another High Court, will promote the ends of
justice or tend to the general convenience of the parties, it may so
transfer the case, subject to such conditions, if any, as it thinks fit to
impose, and the High Court to which such case is transferred shall
deal with it as if the case had been forwarded to it by the Council."
15. It is evident that "misconduct" has been defined under Section 21,
read with the Schedule. Those species of misconduct are different and
specific. What the respondent was charged with was "other misconduct" of a
general category, i.e., conduct unbecoming of one engaged in the profession
of a chartered accountant. The gist of the charges leveled against the
respondent was that though he received amounts and claimed that they were
duly deposited, to discharge the Service tax liabilities, yet the sums actually
payable (or deposited) were less and that he abstracted or misappropriated,
for his own purposes, the balance amounts. These, according to the
complainant, were to the tune of `47,34,278/-.
16. This court would first deal with the respondent's objection as to
CHAT A. REF.2/2014 Page 13
maintainability of the complaint, on the ground that the disputes were settled
between him and the complainant. He relies on two judgments. In the first,
K.K. Sindhwani, the Punjab and Haryana High Court observed that:
"It is seen that the complainant did not appear either before the
disciplinary committee or before the Council. Thus, the allegations
contained in the complaint have remained unsubstantiated. The
disciplinary committee and the Council have failed to disclose on
what basis the charge against the contesting respondent was said to
have been proved. It is rather amazing to note that the complainant
having settled the dispute with the contesting respondent before the
Company Law Board, did not appear before the disciplinary
committee and the Council. The Company Law Board, however,
conveyed to the petitioner that in view of the settlement between the
complainant and the contesting respondent nothing survived in the
complaint but the disciplinary committee and the Council still
proceeded with the complaint for reasons best known to them and
came to a conclusion that the charge had been proved even without
any evidence being led in support of the same. It may be added that
the provisions of Section 21 of the Act being penal in nature the
allegations against the contesting respondent were required to be
established with some certainty, if not beyond reasonable doubt. Even
by the understanding of a layman 'proof means sufficient evidence to
substantiate a proposition. However, proof with certainty or sufficient
evidence apart, there is no evidence, whatsoever, in proof of the
allegations against the contesting respondent. Report of the
disciplinary committee and decision of the council do not say that
instead of the complainant some other witnesses were examined in
proof of the allegations and/or record of the case was proved during
the course of the proceedings."
The same High Court, in Vijay Kumar (supra) held that a complaint not on
behalf of the client, but its old auditor, was not maintainable and that
CHAT A. REF.2/2014 Page 14
disputes related to the issue had been settled and so recorded by the
Company Law Board. It was observed that:
"A perusal of the record shows that the Company, whose Audit
Report is stated to have been prepared by respondent No. 1 contrary
to the prescribed norms, has not made any complaint against
respondent No. 1. One of the Directors of the Company, namely,
Vipan Gupta, appeared before the Disciplinary Committee as a
witness but he did not state a word about the aforesaid Audit Report.
He also did not say what damage or prejudice has been caused to the
Company on account of that report. Amarjit Kamboj, the
complainant, in our opinion had no locus standi to make a complaint
in this respect."
17. In the present case, the complainant appeared before the Committee -
on 19.01.2011 and explained the circumstances under which the agreement,
embodied in the MOU, were entered into. The complainant, in fact did not
withdraw his allegations; he also deposed that the criminal proceedings
against the respondents continued and that the amounts agreed to be paid to
him had not been in fact paid. The complainant relies on a subsequent MOU,
the terms of which appear to be different, inasmuch as the complainant did
absolve the respondent of all misconduct and withdraw the allegations.
These facts, i.e. the parties appearing to have entered into another MOU on
16.04.2012 were material and had to be investigated. The impugned order
does not take that into consideration at all. Whatever the truth of that
document, the Council should have gone into it and called the complainant
to depose before it, in the light of the later development. This, in the Court's
opinion, is a serious infirmity with the impugned order.
18. The next question is whether in the circumstances of the case,
CHAT A. REF.2/2014 Page 15
particularly having regard to the nature of evidence and the materials placed
before it, the Council could have concluded that the respondent was guilty of
cheating or indulging in fraud, causing loss to the complainant. No doubt,
the complaint does mention the relative amounts, the challans, the amounts
allegedly collected as due, and the amounts paid. However, the relative or
corresponding demands from the Service Tax authorities or the assessment
orders, or even the service tax returns, are not on the record. These would
have substantiated to a large measure the complainant's allegation.
Likewise, there is no material to suggest that the amounts were deposited in
some other concern's account. Quite possibly the respondent has been
charge criminally for an offence. However, that ipso facto does not
transform into proof of such criminal misconduct; the prosecution or the
complainant would have to establish his guilt.
19. While disciplinary proceedings may not be in the nature of court
proceedings, yet when a professional, such as a chartered accountant is
arrayed for misconduct which has quasi criminal overtones, the Council has
to be circumspect; some modicum of objective evidence- both documentary
and oral (and not only the say of the complainant- possibly the relative bank
records and relevant statement of bank officers, too have to be considered)
evidence is necessary.
20. The authorities cited, i.e., K.G. Eshwar, Ghia and Sindhwani (supra)
all emphasize that the charges against a chartered accountant are to be
proved with convincing materials and the nature of the proceeding is quasi
criminal. They also highlight that the onus of establishing and proving the
acts or omissions alleged against the charged professional is upon those who
CHAT A. REF.2/2014 Page 16
allege such acts or omissions. In the present case, undoubtedly the parties
entered into an MOU. The respondent's client did appear before the Council
and state that he did not withdraw the allegations; this was after the MOU.
At the same time, the later MOU significantly changes the entire picture.
21. The cumulative picture which emerges is that the Council appears to
have acted with haste and great dispatch. While its zeal to complete
proceedings is understandable, one is reminded of an aphorism "Swift
justice demands more than just swiftness" (Justice Potter Stewart, US
Supreme Court). It was obligatory on the part of the Council not only to
investigate the truth of the later MOU, but also satisfy itself that the basis of
the complaint, i.e., that amounts were appropriated and lower amounts were
paid into the accounts of Service tax authorities, were established
objectively through documentary material. The findings recorded - from the
state of the record, are such that they cast a slur on the professional integrity
of the respondent, without proof of essential foundational facts.
22. In the light of the above discussion, this court is of opinion that the
matter requires to be gone into afresh by the Council. Having regard to the
gravity of the allegations, it is but appropriate that the Council considers all
the relevant materials, including the documents and the deposition of the
complainant before preparing a fresh report. Accordingly, this court hereby
in exercise of its jurisdiction, under Section 21 (6) (d) refers the case to the
Council for further inquiry and report. The Council shall complete its task
expeditiously and in any case within 6 months. The respondent is directed to
present himself before the Council for further proceedings within three
weeks from today. The Council shall complete the task, firstly by
CHAT A. REF.2/2014 Page 17
summoning the complainant, recording his deposition, and, thereafter
proceeding to inquire into the material documents.
23. The reference is returned on the above terms. No costs.
S. RAVINDRA BHAT
(JUDGE)
DEEPA SHARMA
(JUDGE)
AUGUST 04, 2016
CHAT A. REF.2/2014 Page 18
