The Karnavati Cooperative Bank ... vs The Disciplinary Committee
2023 Latest Caselaw 5147 Guj

     C/SCA/4445/2020                             JUDGMENT DATED: 04/07/2023




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

               R/SPECIAL CIVIL APPLICATION NO. 4445 of 2020


FOR APPROVAL AND SIGNATURE:


HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

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1     Whether Reporters of Local Papers may be allowed
      to see the judgment ?

2     To be referred to the Reporter or not ?

3     Whether their Lordships wish to see the fair copy
      of the judgment ?

4     Whether this case involves a substantial question
      of law as to the interpretation of the Constitution
      of India or any order made thereunder ?

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                THE KARNAVATI COOPERATIVE BANK LIMITED
                                 Versus
                      THE DISCIPLINARY COMMITTEE
==========================================================
Appearance:
MR MB GANDHI, SENIOR ADVOCATE with MR CHINMAY M
GANDHI(3979) for the Petitioner(s) No. 1
MS DHARMISHTA RAVAL(707) for the Respondent(s) No. 1,2
NOTICE SERVED for the Respondent(s) No. 3
==========================================================

    CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

                             Date : 04/07/2023

                            ORAL JUDGMENT

1. The writ-applicant herein is a Cooperative Bank and the

present writ-application is instituted through its Vice President

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challenging the order passed by the respondent No.1 -

Disciplinary Committee constituted under Section 21B of the

Chartered Accountants (Amendment) Act, 1949. The writ-

applicant Bank herein was the complainant before the institute

of Chartered Accountants of India (ICAI) to the effect that the

respondent No.3 herein was appointed as Concurrent Auditor

of the writ-applicant Bank since 2004-05. During financial year

2007-08 and 2008-09 the respondent No.3 as stated by the

writ-applicant herein in the complaint dated 10.6.2013 without

actual verification of cash, gave a clean report for number of

months and due to aforesaid action of the respondent No.3,

cashier of the writ-applicant Bank misappropriated cash to the

tune of Rs.43,00,000/-. On the basis of aforesaid complaint at

the instance of the writ-applicant Bank herein the respondent

No.2 conducted an inquiry, prima facie opinion dated 1.8.2015

was formed looking into various documents that the respondent

No.3 was guilty of professional and other misconducts falling

within the meaning of Clause (7) of Part-I of the Second

Schedule of the Chartered Accountants Act, 1949.

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2. The respondent No.1 herein passed the impugned order

dated 23.12.2019 whereby Respondent No.3 herein was held to

be not guilty of Professional and any other misconduct and the

same has resulted in filing of the present writ-application at

the instance of the original complainant i.e. the writ-applicant

Bank being aggrieved by the impugned order dated

23.12.2019 passed by the respondent No.1 herein praying for

the following reliefs :-

"(A) This Hon'ble Court may be pleased to issue writ of

mandamus and/or any other appropriate writ, order or

direction in the nature of mandamus holding and declaring

that the order passed by the Disciplinary Committee -

Respondent No.1 dated 16.12.2019 (Annexure-C) isa non-

speaking order as well as order without considering the

numerous documents on the record of the case and it is

cursory one and be further pleased to declare the same as void

and be pleased to quash and set-aside the same.

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(B) Pending admission, hearing and/or final disposal of this

petition, this Hon'ble Court may be pleased to stay the

execution, operation and implementation of the order dated

16.12.2019 passed by Respondent No. 1 (Annexure-C).

C) Such other and further orders as this Hon'ble Court may

deem just, fit and expedient be passed in favour of the

petitioner.

D) Costs of this petition be provided for to the petitioner."

3. Heard Mr. M. B. Gandhi, the learned Senior Counsel

assisted by Mr. Chinmay Gandhi, the learned advocate

appearing for the writ-applicant Bank and Ms. Dharmishta

Raval, the learned advocate appearing for appearing for the

respondents No.1 and 2.

Submissions on behalf of the writ-applicant :-

4. Mr. M. B. Gandhi, the learned Senior Counsel

submitted that in view of the callous attitude of respondent

No.3 - cashier Mr. Milind Kothari siphoned/misappropriated

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the writ-applicant Bank to the tune of Rs.43 lakhs. Reliance

was placed on the criminal proceeding initiated by the writ-

applicant Bank against the cashier Mr. Milind Kothari wherein

the criminal proceedings came to be initiated against the

cashier being Criminal Case No.9 of 2010 wherein the learned

Metropolitan Magistrate, Court No.11, Ahmedabad by an order

dated 21.8.2012 acquitted Mr. Milind Kothari in the said

proceedings. Reliance was also placed on some of the

contentions/findings considered by the learned Metropolitan

Magistrate in the judgment that together with the remark by

the learned Magistrate to the effect that "In this way the

Chartered Accountant Manojbhai Pandya had shown his

carelessness in preparing the Audit Report". Placing reliance on

the same it was submitted that the aforesaid would clearly

establish that the respondent No.3 was guilty of professional

misconduct. It was submitted that the respondent No.3 never

personally visited the Bank for the purpose of audit of account

and deputed his audit staff who were negligent according to

the statement of the staff members of the respondent no.3

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4.1 It was submitted that the staff member of respondent

No.3 Mr. Rakesh Bhatt had also made a statement u/s 164 of

Cr.P.C ., and at that time, the Police Inspector, Crime Branch,

Ahmedabad had written a letter to the learned Metropolitan

Magistrate on 21.12.2009 to the effect that the witness is likely

to get threats and, therefore, he requested to have his

statement recorded u/s 164 of Cr.P.C ., out of his own

volition. Upon receipt of the said letter, the learned Chief

Metropolitan Magistrate directed the learned Metropolitan

Magistrate that the said statement to be recorded.

4.2 Mr. Gandhi, the learned Senior Counsel also submitted

that the respondent authority failed to take into consideration

the statement of the respondent No.3 before the police at the

time of investigation that there was an admission about not

counting of notes and failure of duty and misconduct by

profession. It was submitted that undisputedly Mr. Devang Soni

had taken charge only for one day i.e. on 12.02.2009 to

13.02.2009 and there was a holiday on the next day, he

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handed over the keys to Mr. Dilip Pathak on 14.02.2009.

4.3 It was submitted that the respondent No.1 had also not

taken into consideration the accounts which are produced

about operating of accounts by Mr. Milind Kothari, the then

cashier, accused as well as the accountant of his father Mr.

Pushpdant Kothari. It was submitted that modus operandi of

Mr. Milind Kothari was such that he was having other

accounts in Citi Bank, HDFC and several other banks and he

was drawing the amount with the help of the credit card and

the Banks are normally, in such cases, drawing monthly bills,

which a party has to pay and, therefore, huge amount being

withdrawn, he would issue a cheque to square up the accounts

and when the cheque was issued and come for clearance, then,

as a Cashier, he himself was able to check in computer that

cheque clearance and, therefore, at that time, against the very

amount of cheque, he would deposit the cash amount in his

bank account maintained by the writ-applicant Bank.

4.4 It was submitted that the son and father jointly operated

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such accounts and credit cards in different Banks and as and

when the payment was to be made, he used to issue the

cheque and thereafter cash was deposited. It was submitted

that looking to the size of the amount i.e. Rs.1 lakh, Rs.2

lakhs etc., clear a Cashier who had a nominal salary, could

not have such a large amount of cash and, therefore, it is

prima facie case established that amount of Rs.43 lakhs was

siphoned by Mr. Milin Kothari, the Cashier at that point of

time.

4.5 It was submitted that the Bank has already filed a Lavad

Suit No.248 of 2010 for recovery of Rs.43 lakhs and interest

from Mr. Milind Kothari and others wherein Respondent No.3

herein is defendant No.5 in the said suit. The writ-applicant

herein had also made a claim against the Insurance Company

namely, the Oriental Insurance Company Limited and the claim

was rejected and therefore, a complaint was filed before the

Gujarat Consumer Disputes Redressal Commission, which was

dismissed and therefore, the matter was carried to the National

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Consumer Disputes Redressal Commission wherein, an order

was passed on 28.03.2018 to the effect that Rs.25,000/- to be

deposited within four weeks in the Consumer Legal Aid

Commission and further the State Commission was directed to

restore the complaint on its original number and to decide the

said complaint, preferably within six months.

4.6 It was submitted that the impugned order dated

16.12.2019 passed by the disciplinary committee i.e. the

respondent No.1 is a non-speaking order and that the

authority is required to decide the matter on merits. It was

submitted that all the documents which are produced by the

party should be taken into consideration and reasons should be

provided as to why a particular evidence is accepted or not

accepted. It was submitted that in the facts of the present

case, large number of documents are produced but there is no

reference of the said documents and therefore, amongst several

documents some of the documents are appended to the writ-

application to show that an error is committed and the

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professional misconduct is committed by the respondent No.3.

The order impugned being a non-speaking order is required to

be quashed and set-aside.

4.7 Mr. Gandhi, the learned Senior Counsel submitted that

the writ-applicant Bank has already dismissed Mr. Nilesh

Nimavat, Cashier of the Bank at the relevant time and Mr.

Dilip Pathak, Manager as well as Mr. Milind Kothari, who was

Cashier by whom the amount was siphoned/stolen.

4.8 In support of his above submissions Mr. Gandhi, the

learned Senior Counsel relied on the following decisions :-

(a) In the case of C. A. Rajesh V. Dudhwala vs. Disciplinary

Committee, reported in 2013(0) GLHEL-HC-229415.

(b) In the case of T. O. Aleyas, S/o Late Kuruvilla Unittan

vs. The Institute of Chartered Accounts of India, High Court of

Kerala in W.P.(C) No.29211 of 2011 (B).

(c) In the case of Counsil Of Institute Of Chartered

Accountants Of India Versus Manubhai A.Panchal And Co,

reported in 2018 GLR (2) 1110.

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Submissions on behalf of the Respondents No.1 and 2 :-

5. Ms. Dharmishta Raval, the learned advocate appearing for

appearing for the respondents No.1 and 2 at the outset

submitted that the writ-applicant has no locus standi to file the

present the writ-application under the provisions of Article 226

of the Constitution of India.

5.1 It was submitted that the writ-applicant herein is the

complainant in respect of a complaint bearing reference No.PR/

150/13-DD/168/13-DC/435/16 filed with the respondent No.1

against alleged professional misconduct by the respondents

No.3 and 4 herein. Pursuant to the said complaint received by

the respondents No.1 and 2 herein, the respondents carried out

disciplinary proceedings in accordance with the provisions of

the Chartered Accountants Act (hereinafter referred to as

"Act") and Chartered Accountants (Procedure of Investigation

of Professional and Other Misconduct and Conduct of Cases)

Rules, 2007 (hereinafter referred to as "Rules").

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5.2 It was submitted that the said complaint was duly

examined by the Director (Discipline) who formed a prima

facie opinion that the respondent No.3 is guilty of professional

misconduct under Clause 7 of the Part I of the Second

Schedule of the Act, after giving due opportunity to both, the

writ-applicant and the Chartered accountants to explain their

case in writing. After having considered the materials on

record the respondent No.1 has not found any positive

evidence of negligence on the part of respondent No.3 and

accordingly, held the respondent No. 3 is not guilty in terms

of Clause 7 of the Part I of the Second Schedule of the Act.

5.3 Placing reliance on the aforesaid submissions Ms. Raval,

the learned advocate submitted that the writ-applicant herein

has no locus standi to challenge the impugned order in view of

the fact that essentially the complainant as a realtor that

provide information to the ICAI regarding misconduct. Reliance

was placed on an order passed in W.P.(C) 8071/2019 and C.M.

Appls No.33381-83/2019. Placing reliance on the aforesaid

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decision it was submitted that the writ-applicant is a third

party who cannot question the manner in which the

respondent No.1 or its body to conduct disciplinary

proceedings against its members. In view thereof, the writ-

applicant herein has no locus standi to file such writ-

application and the petition be dismissed in limine.

Analysis :-

6. Heard the learned advocates appearing for the respective

parties. Undisputed facts which emerge for consideration of

this Court read thus :-

6.1 The writ-applicant herein is a Cooperative Bank having

filed the present writ-application through its Vice Chairman.

The writ-applicant Bank filed complaint against the respondent

No.3 herein on 10.6.2013 in prescribed manner. The writ-

applicant Bank in its complaint alleged as under :-

"The Respondent has been appointed Concurrent Auditor of the Complainant Bank since year 2004-05. During the Financial Year 2007-08 & 2008-09, the Respondent without actual cash

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verification gave clean report for number of months and due to this the cashier of the Complainant-Bank did misappropriation of cash of Rs. 43 Lakhs."

The said complaint was examined by the respondent No.3

authority in accordance with the procedure prescribed under

the Chartered Accounts Act and Chartered Accountants

(Procedure of Investigation of Professional and Other

Misconduct and Conduct of Cases) Rules, 2007. The said

complaint came to be duly examined by the Director

(Discipline) who formed prima facie opinion that the

respondent No.3 is guilty of professional misconduct under

Clause 7 of Part I of Second Schedule of the Act. On such

prima facie opinion having been formed by the Director

(Discipline) in terms of the aforesaid clause forwarded the said

opinion to the respondent No.1. The said prima facie opinion

was formed by the Director (Discipline) after offering due

opportunity to both, writ-applicant herein and the respondents

herein to explain their case in writing. Thereafter the said

opinion was forwarded to the respondent No.1. After

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consideration of the prima facie opinion on 1.8.2015 alongwith

the material which was available on record the respondent

No.1 did not find any positive evidence of negligence on the

part of the respondent No.3 and accordingly held the

respondent No.3 not guilty in terms of Clause 7 of Part I of

Schedule Second. The said order passed by the respondent

No.1 dated 16.12.2019 reads thus :-

"Findings of the Committee :-

4. In view of the above sequential submissions by the

respondent which is evident from the certificate (enclosed) duly

verified by the officers of banks including the cashier and even

by Mr. Devang Soni who took charge on 12th February, 2009.

The committee found that there is a merit in the contention of

respondent.

5. The committee also noted that the official of the firm who

conducted the audit also gave a statement related to verification

of the cash which was later on retracted before the Magistrate

under Section 164 of Cr. PC and is not being objected. Rather

the committee also noted that the court while pronouncing the

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final decision against the alleged employee acquitted them for

which bank has filed an appeal wherein no decision has been

received as yet. It is also noted by the Committee that as per

normal procedures adopted in the cash verification the auditors

is bound to verify the bundle of notes rather than each and

every note in the bundle wherein in the verification at different

time there was no objection on the missing bundles by the

officials of Bank. It is also very important to note here that the

cash in hand matched with the books of accounts. The cash in

hand cannot be physically tallied with individual cash chest

rather the cash in hand and the cash in both the cash chest

have been found correct and no discrepancy has been noticed

on this count.

Conclusion :-

6. In view of the above, the committee could not find any

positive evidence of negligence on the part of the Respondent

to hold him guilty of the negligence in performing his duties.

Accordingly, in the considered opinion of the Committee, the

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Respondent is NOT GUILTY in terms of Clause (7) of Part I of

Second Schedule to the Chartered Accountant Act, 1949.

7. Accordingly, the Committee passes an Order for closure of

this case under Rule 19(2) of the Chartered Accountants

(Procedure of Investigations of Professional and Other

Misconduct and Conduct of Cases) Rules, 2007."

7. At this stage, it is apposite to refer to the decision in

the case of Union of India & Ors. vs. P. Gunasekaran, reported

in (2015) 2 SCC 610, paragraphs 12 to 19 read thus :-

"12. Despite the well-settled position, it is painfully disturbing to note that the High Court has acted as an appellate authority in the disciplinary proceedings, re- appreciating even the evidence before the enquiry officer. The finding on Charge no. I was accepted by the disciplinary authority and was also endorsed by the Central Administrative Tribunal. In disciplinary proceedings, the High Court is not and cannot act as a second court of first appeal. The High Court, in exercise of its powers under Article 226/227 of the Constitution of India, shall not venture into re- appreciation of the evidence. The High Court can only see whether:

a. the enquiry is held by a competent authority;

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b. the enquiry is held according to the procedure prescribed in that behalf;

c. there is violation of the principles of natural justice in conducting the proceedings;

d. the authorities have disabled themselves from reaching a fair conclusion by some considerations extraneous to the evidence and merits of the case;

e. the authorities have allowed themselves to be influenced by irrelevant or extraneous considerations;

f. the conclusion, on the very face of it, is so wholly arbitrary and capricious that no reasonable person could ever have arrived at such conclusion;

g. the disciplinary authority had erroneously failed to admit the admissible and material evidence;

h. the disciplinary authority had erroneously admitted inadmissible evidence which influenced the finding;

i. the finding of fact is based on no evidence.

13. Under Article 226/227 of the Constitution of India, the High Court shall not:

(i). re-appreciate the evidence;

(ii). interfere with the conclusions in the enquiry, in case the

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same has been conducted in accordance with law;

(iii). go into the adequacy of the evidence;

(iv). go into the reliability of the evidence;

(v). interfere, if there be some legal evidence on which findings can be based.

(vi). correct the error of fact however grave it may appear to be;

(vii). go into the proportionality of punishment unless it shocks its conscience.

14. In one of the earliest decisions in State of Andhra Pradesh and others V/s. S. Sree Rama Rao, AIR 1963 SC 1723, many of the above principles have been discussed and it has been concluded thus:

"7. ... The High Court is not constituted in a proceeding under Article 226 of the Constitution a court of appeal over the decision of the authorities holding a departmental enquiry against a public servant: it is concerned to determine whether the enquiry is held by an authority competent in that behalf, and according to the procedure prescribed in that behalf, and whether the rules of natural justice are not violated. Where there is some evidence, which the authority entrusted with the duty to hold the enquiry has accepted and which

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evidence may reasonably support the conclusion that the delinquent officer is guilty of the charge, it is not the function of the High Court in a petition for a writ under Article 226 to review the evidence and to arrive at an independent finding on the evidence. The High Court may undoubtedly interfere where the departmental authorities have held the proceedings against the delinquent in a manner inconsistent with the rules of natural justice or in violation of the statutory rules prescribing the mode of enquiry or where the authorities have disabled themselves from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case or by allowing themselves to be influenced by irrelevant considerations or where the conclusion on the very face of it is so wholly arbitrary and capricious that no reasonable person could ever have arrived at that conclusion, or on similar grounds. But the departmental authorities are, if the enquiry is otherwise properly held, the sole judges of facts and if there be some legal evidence on which their findings can be based, the adequacy or reliability of that evidence is not a matter which can be permitted to be canvassed before the High Court in a proceeding for a writ under Article 226 of the Constitution."

15. In State of Andhra Pradesh and others V/s. Chitra Venkata Rao, (1975) 2 SCC 557, the principles have been

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further discussed at paragraph-21 to 24, which read as follows:

"21. The scope of Article 226 in dealing with departmental inquiries has come up before this Court.

Two propositions were laid down by this Court in State of A.P. V/s. S. Sree Rama Rao. First, there is no warrant for the view that in considering whether a public officer is guilty of misconduct charged against him, the rule followed in criminal trials that[pic]an offence is not established unless proved by evidence beyond reasonable doubt to the satisfaction of the Court must be applied. If that rule be not applied by a domestic tribunal of inquiry the High Court in a petition under Article 226 of the Constitution is not competent to declare the order of the authorities holding a departmental enquiry invalid. The High Court is not a court of appeal under Article 226 over the decision of the authorities holding a departmental enquiry against a public servant. The Court is concerned to determine whether the enquiry is held by an authority competent in that behalf and according to the procedure prescribed in that behalf, and whether the rules of natural justice are not violated. Second, where there is some evidence which the authority entrusted with the duty to hold the enquiry has accepted and which evidence may reasonably support the conclusion that the delinquent

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officer is guilty of the charge, it is not the function of the High Court to review the evidence and to arrive at an independent finding on the evidence. The High Court may interfere where the departmental authorities have held the proceedings against the delinquent in a manner inconsistent with the rules of natural justice or in violation of the statutory rules prescribing the mode of enquiry or where the authorities have disabled themselves from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case or by allowing themselves to be influenced by irrelevant considerations or where the conclusion on the very face of it is so wholly arbitrary and capricious that no reasonable person could ever have arrived at that conclusion. The departmental authorities are, if the enquiry is otherwise properly held, the sole judges of facts and if there is some legal evidence on which their findings can be based, the adequacy or reliability of that evidence is not a matter which can be permitted to be canvassed before the High Court in a proceeding for a writ under Article 226.

22. Again, this Court in Railway Board, representing the Union of India, New Delhi V/s. Niranjan Singh said that the High Court does not interfere with the conclusion of the disciplinary authority unless the finding is not supported by any evidence or it can be said that no

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reasonable person could have reached such a finding. In Niranjan Singh case this Court held that the High Court exceeded its powers in interfering with the findings of the disciplinary authority on the charge that the respondent was instrumental in compelling the shut-down of an air compressor at about 8.15 a.m. on May 31, 1956. This Court said that the Enquiry Committee felt that the evidence of two persons that the respondent led a group of strikers and compelled them to close down their compressor could not be accepted at its face value. The General Manager did not agree with the Enquiry Committee on that point. The General Manager accepted the evidence. This Court said that it was open to the General Manager to do so and he was not bound by the conclusion reached by the committee. This Court held that the conclusion reached by the disciplinary authority should prevail and the High Court should not have interfered with the conclusion.

23. The jurisdiction to issue a writ of certiorari under Article 226 is a supervisory jurisdiction. The Court exercises it not as an appellate court. The findings of fact reached by an inferior court or tribunal as a result of the appreciation of evidence are not reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may

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appear to be. In regard to a finding of fact recorded by a tribunal, a writ can be issued if it is shown that in recording the said finding, the tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Again if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. A finding of fact recorded by the Tribunal cannot be challenged on the ground that the relevant and material evidence adduced before the Tribunal is insufficient or inadequate to sustain a finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal. See Syed Yakoob V/s. K.S. Radhakrishnan.

24. The High Court in the present case assessed the entire evidence and came to its own conclusion. The High Court was not justified to do so. Apart from the aspect that the High Court does not correct a finding of fact on the ground that the evidence is not sufficient or adequate, the evidence in the present case which was considered by the Tribunal cannot be scanned by the High Court to justify the conclusion that there is no evidence which would justify the finding of the Tribunal that the respondent did not make the journey. The

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Tribunal gave reasons for its conclusions. It is not possible for the High Court to say that no reasonable person could have arrived at these conclusions. The High Court reviewed the evidence, reassessed the evidence and then rejected the evidence as no evidence. That is precisely what the High Court in exercising jurisdiction to issue a writ of certiorari should not do."

16. These principles have been succinctly summed-up by the living legend and centenarian Justice V. R. Krishna Iyer in State of Haryana and another V/s. Rattan Singh, (1977) 2 SCC 491. To quote the unparalled and inimitable expressions:

"4. .... in a domestic enquiry the strict and sophisticated rules of evidence under the Indian Evidence Act may not apply. All materials which are logically probative for a prudent mind are permissible. There is no allergy to hearsay evidence provided it has reasonable nexus and credibility. It is true that departmental authorities and Administrative Tribunals must be careful in evaluating such material and should not glibly swallow what is strictly speaking not relevant under the Indian Evidence Act. For this proposition it is not necessary to cite decisions nor text books, although we have been taken through case-law and other authorities by counsel on both sides. The essence of a judicial approach is objectivity, exclusion of extraneous materials or considerations and observance of rules of natural justice.

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Of course, fairplay is the basis and if perversity or arbitrariness, bias or surrender of independence of judgment vitiate the conclusions reached, such finding, even though of a domestic tribunal, cannot be held good. ..."

17. In all the subsequent decisions of this Court upto the latest in Chennai Water Supply and Sewarage Board V/s. T. T. Murali Babu, (2014) 4 SCC 108, these principles have been consistently followed adding practically nothing more or altering anything.

18. On Article I, the disciplinary authority, while imposing the punishment of compulsory retirement in the impugned order dated 28.02.2000, had arrived at the following findings:

"Article-I was held as proved by the Inquiry authority after evaluating the evidence adduced in the case. Under the circumstances of the case, the evidence relied on viz., letter dated 11.12.92 written by Shri P.

Gunasekaran, provides a reasonable nexus to the charge framed against him and he did not controvert the contents of the said letter dated 11.12.92 during the time of inquiry. Nor did he produce any defence witness during the inquiry to support his claims including that on 23.11.92 he left the office on permission. There is

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nothing to indicate that he was handicapped in producing his defence witness. ..."

19. The disciplinary authority, on scanning the inquiry report and having accepted it, after discussing the available and admissible evidence on the charge, and the Central Administrative Tribunal having endorsed the view of the disciplinary authority, it was not at all open to the High Court to re- appreciate the evidence in exercise of its jurisdiction under Article 226/227 of the Constitution of India."

Considering the aforesaid position of law and the facts of

the present case, this Court would not reappreciate the

evidence which was considered by the Disciplinary Committee

while coming to the aforesaid decision. Undisputedly it is not

even the case of the writ-applicant alleging malafide or any

procedural irregularity. Once the decision making authority has

followed the due procedure as embodied under the Act and the

Rules, this Court would not sit in appeal against the decision

which is arrived at by the competent authority after

considering the material which was on record.

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8. This Court has considered the order passed by the

respondent No.1 wherein the Committee considered the charge

framed against the respondent No.3 and on due verification of

the certificate which was enclosed duly verified by the officers

of the Bank including Mr. Devang Soni who took charge on

12.02.2009. The Committee found merit in the contention of

the respondent No.3. The officials of the firm of the

respondent No.2 also retracted the statement before the learned

Magistrate under Section 164 of the Criminal Procedure Code

and the same was not objected. The Committee noted that the

learned Magistrate acquitted the Cashier by order dated

21.8.2012, at the relevant point of time the appeal was

pending. The Committee also noted that as per normal

procedure adopted, in cash verification the auditors are to

verify the bundle of notes rather than each and every note.

The Committee also considered the case of the respondent No.3

taking into consideration the relevant rules i.e. prevailing at

the same time and came to the conclusion that cash in hand

matched with the books of account. Further the Committee

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also considered that the cash in hand could not be physically

tallied with individual cash chest rather than cash in hand and

cash in both the cash chest were found to be correct and no

discrepancy was noticed on their part. Considering the

aforesaid, the Committee passed an order of closure of case

against the respondent No.3 under the provisions of Rule 19(2)

of the Chartered Accountants (Procedure of Investigations of

Professional and Other Misconduct and Conduct of Cases)

Rules, 2007.

9. This Court deems it fit to deal with the decisions relied

upon by Mr. Gandhi, the learned Senior Counsel to

substantiate the submissions of the writ-applicant as referred

above :-

(a) In the case of C. A. Rajesh V. Dudhwala vs. Disciplinary

Committee, reported in 2013(0) GLHEL-HC-229415, the

Institute of Chartered Accountants, the aforesaid appeal was

filed at the instance of Chartered Accountant was debarred by

the Council. The quantum of punishment imposed by the

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Council which was not interfered by the Hon'ble Division

Bench on the ground that the Court declined to interfere in the

concurrent findings by three authorities.

In the facts of the present case, the writ-applicant herein

is the complainant whose complaint has been rejected. The

aforesaid decision is not applicable in the facts of the present

case. The writ-applicant herein being the complainant and the

Council has considered after following due process of law, the

Chartered Accountant not guilty.

(b) In the case of T. O. Aleyas, S/o Late Kuruvilla Unittan

vs. The Institute of Chartered Accounts of India, High Court of

Kerala in W.P.(C) No.29211 of 2011 (B), the issue involved in

the said writ-application was whether on a complaint received

from the aggrieved person the Board of Discipline and the

Disciplinary Committee constituted under the ICAI under

Sections 21A and 21B of the Act can without giving any reason

can decide not to initiate any disciplinary action against two

Chartered Accountants especially when the Director (Discipline)

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without giving reasons on exercise of powers under Section

21(2) of the Act arrives at a prima facie opinion commission of

misconduct by one of them who are partners of the Chartered

Accountant firm which was engaged in auditing of accounts of

a Company in respect of which audit complaint were raised

while exercising powers under Section 21(3) of the Act and

whether in respect of identical misconduct by one of the

partners whether the other can be absolved when the

allegation with respect to audit of allegations are in respect to

the audit or the firm was engaged.

The aforesaid decision could not be applicable in the

facts of the present case, in view of the fact that in the facts

of the present case both, the complainant and the respondent

No.3 were accorded opportunity of hearing and prima facie

opinion was formed and after considering the same disciplinary

proceedings came to be initiated against the respondent No.3

wherein the complaint came to be closed against the

respondent No.3.

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(c) In the case of Council Of Institute Of Chartered

Accountants Of India Versus Manubhai A.Panchal And Co,

reported in 2018 GLR (2) 1110, the facts of the present case

pertains to audit carried out by the firm of the Bank. The

Hon'ble Division Bench was considering an LPA at the instance

of the ICAI wherein the Council found the respondent guilty of

certain misconduct and decided to recommend to the Court

that the name of the respondent be removed from the Register

of members for a period of two years. The Hon'ble Division

Bench in the aforesaid considered the aforesaid reference and

accepted the recommendation of the Council wherein it was

recommended that the name of the respondent No.2 be

removed from the Register of members for a period of two

years. While coming to the aforesaid conclusion the Hon'ble

Division Bench considered the word "misconduct" in light of

the provisions of Section 21 of the Act and held that the

conduct which is wrong/improper/unlawful and transgression

from an established and definite Code of Conduct and Hon'ble

Division Bench proceeded further to accept that the contention

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of the Council that the conduct of the respondent would fall

within the domain of the misconduct and accordingly allowed

the reference.

In the facts of the present case, the respondent No.3

considering the documents on record held that there was no

material on record to hold the respondent No.3 guilty.

10. Ms. Raval, the learned advocate appearing for the

respondents No.1 and 2 has placed on record the Manual of

Concurrent Audit of the Bank and submitted that the aforesaid

decision was taken by the respondent Committee taking into

consideration the prevalent rules for concurrent audit of the

bank at the relevant point of time.

11. In the opinion of this Court, the proceedings against a

member of the ICAI are in the nature of disciplinary

proceedings with an object, whether a member/firm is guilty of

offence prescribed under First Schedule or Second Schedule. In

the facts of the present case, the Director (Discipline) formed

an opinion that prima facie case was made out against the

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respondent No.3 and the same was referred to the Committee

i.e. respondent No.1. On considering the documents on record

and the facts of the documents on record the Committee held

the respondent No.3 not guilty of misconduct. Scope of

interference in such decision arrived by the respondent

authority under Articles 226 and 227 of the Constitution of

India is very limited onsidering the facts of the present case

and position of law as referred above.

12. In the case of Baldevbhai Maganbhai Patel vs.

Mukeshbhai Aatmaram Patel order dated 10.2.2021 passed in

the Letters Patent Appeal No.50 of 2021 in the Special Civil

Application No.10522 of 2020, wherein the Hon'ble Division

Bench held that the complainant would have no right to

maintain appeal as the role of the complainant is confined for

lodging of complaint before the competent authority beyond

that the complainant would not have any role to challenge the

order passed not accepting the complaint. Paragraphs No.3 to

6 read thus :-

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"3. In our opinion, the present appellant, who is only the complainant, would not have right to maintain this appeal as his role was confined for lodging the complaint before the complainant authority in appropriate manner and to assist or provide evidence before the competent authority in support of his complaint. Beyond that, the complainant would not have any role to challenge an order passed not accepting the complaint.

4. The law on the point is well settled. According to us, reference may be had to the following judgments:- (1) In the case of Maharaj Singh v. State of Uttar Pradesh & Ors., reported in (1977) 1 SCC 155.

(2) A decision rendered in Special Appeal No.177 of 2008, decided on 05.03.2008 of the Allahabad High Court. (3) In the case of Ravi Yashwant Bhoir v. District Collector, Raigad & Ors., reported in (2012) 4 SCC 407; and (4) In the case of Poonam v. State of Uttar Pradesh & Ors., reported in (2016) 2 SCC 779.

5. Accordingly, we DISMISS the appeal on the ground of the appellant having no locus to maintain the appeal. Consequently, the connected Civil Application also stands DISPOSED OF.

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6. We make it clear that we have not examined the merits of the appeal and we have dismissed the same only on the ground of locus."

13. In view of the aforesaid position of law as referred

above and the facts of the present case the writ-applicant

herein is the original complainant having preferred complaint

before the Instituted of Chartered Accountants of India (ICAI)

alleging that the respondent No.4 was appointed as Concurrent

Auditor of the writ-applicant i.e. the original complainant Bank

since the year 2004-05. During the financial years 2007-08 and

2008-09 the respondent No.4 without actual cash verification

gave clean chit for number of months and due to this the

Cashier of the complainant Bank misappropriated cash to the

tune of Rs.43 lakhs. The respondent No.1 herein considering

the documents on record held that there was no material

found by the respondent No.1 to hold the respondent No.3

guilty.

14. In the opinion of this Court, the complainant essentially

act as a realtor that provide information to the ICAI regarding

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misconduct. The Act also provides for appeal to the delinquent

against whom the disciplinary authority would pass an adverse

order, however the same right is not available to the

complainant. Under such circumstances, where the Statute itself

does not provide for appeal to the complainant who acts as an

informant to the ICAI with respect to the alleged incident,

thereafter it is for the respondent authority to consider the said

complaint in accordance with the Act and Rules. The same is

also a rational for not providing a remedy of appeal to a

complaint under Section 22(g) of the ICAI Act against the

decision of the ICAI absolving the member of allegation of any

misconduct in terms of Section 22(g) of the ICAI Act remedy of

appeal is only available to a member of ICAI against the

decision of the Board Discipline or Disciplinary Committee

imposing any penalty. The same is not available to the

complainant or informant. Considering the aforesaid, this

Court is not inclined to accept or entertain the writ-application

filed at the instance of the original complainant - writ-

applicant herein. The writ-application fails on the ground of

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the writ-applicant having no locus to maintain the present

writ-application. The present writ-application stands dismissed

accordingly.

(VAIBHAVI D. NANAVATI,J) K.K. SAIYED