Nirmal Kunawat vs Rajesh Suhalka
2021 Latest Caselaw 18797 Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 2569/2009

Nirmal Kunawat

----Petitioner Versus Rajesh Suhalka

----Respondent

For Petitioner(s) : Mr. Vikas Balia For Respondent(s) : Mr. Anjay Kothari

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

Order

10/12/2021

1. The petitioner has preferred this writ petition under Article

226 of the Constitution of India, for the following reliefs :-

"In view or the above, it is, therefore, humbly prayed to this Hon`ble Court that the present miscellaneous appeal may kindly be please be allowed and quash/set aside/modify the order of the Council and decide the appeal in favour of the appellant."

The finding of the Disciplinary Committee reads as follows :-

"In view of aforesaid facts, emerging from the proceedings, records and papers, it is clear that the Respondent has not complied with the aforesaid requirements of the Regulations and ultimately agreed to the lapses on his part for complying with the Regulations. Thus, on first charge, it is apparent that Respondent did not effectively communicate with the previous auditors for his "No Objection" and on doubting the papers filed, the Respondent agree that he failed to make effective communication. Therefore, he is guilty of this charge. Similarly, for second charge also, the Respondent agreed that he relied on Advocate's opinion and certificate issued by the Company for

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compliance of provisions of Section 224 and 225 of the Companies Act but himself did not check the papers/documents on record of the Company. So, the Respondent is held guilty for this charge as well.

Conclusion In view of above, in the considered opinion of the Committee the Committee holds that Respondent guilty of professional misconduct falling within the meaning of Clauses (8) and (9) of Part I of First Schedule read with Sections 21 and 22 of the Chartered Accountants Act, 1949."

2. Counsel for the petitioner has relied upon the judgment of

this Court in J.S. Bhati Vs. The Council of Institute of

Chartered Accountants of India & Anr., (S.B. Civil Misc.

Appeal No.136 of 1973, decided on 29.08.1975). The relevant

para whereof reads as follows :-

" This question, as to how the word 'communicated' be interpreted, came up before the Supreme Court in State of Punjab v.

Khemi Ram, AIR 1970 SC 214 = (1970 Lab IC 271). But the context in which this word was to be interpreted by the court was different. In that case an order was issued by the competent authority to the Government employee. The question arose whether mere issuing of a letter by an officer can be taken as communicating that order to the employee. Their Lordships of the Supreme Court observed that the ordinary meaning of the word 'communicate' is to impart, confer or transmit information. The learned Judges further held that once an order is issued and is sent out to the concerned Government servant it must be held to have been communicated to him, no matter when did he receive it actually. But this authority in my opinion would not be of any avail to the appellant because the requirement of Clause (8) is not that the incoming auditor has only to communicate his intention of accepting the new assignment in place of the outgoing auditor. The expression used by the legislature is that the incoming auditor must be in communication in writing with the outgoing auditor. The expression 'in communication' therefore cannot be taken equivalent to the expression 'communicate to a particular person'. The mandate of the legislature is that if a person accepts a position as auditor previously held by another Chartered Accountant, 'without

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communicating with him' in writing then he in the eye of law is guilty of misconduct. The expression 'communicate with him in writing' in this context cannot be interpreted that this provision of the law simply casts a duty on the incoming auditor to inform the outgoing auditor about his intention to accept his new assignment. He has to do something more to discharge his obligation under the said expression. In my opinion Mr. Jain is correct when he submits that the requirement of the expression 'communicate with him' requires more than mere intimating his intention by despatching a letter under certificate of posting. According to Mr. Jain the incoming auditor must be in communication with the outgoing auditor i. e. he must be in touch through letter with his counter-part and before he finally accepts that offer of appointment as auditor he must at least get the reply from the outgoing auditor about the receipt of the letter addressed to him by the incoming auditor.

Looking to the practical difficulties for complying with the requirement of Clause (8) of Schedule I the Institute of Chartered Accountants of India issued certain instructions and watered down the rigidity thereof by laying down that if some kind of acknowledgement is received from the other party which may ensure that the communication reached the addressee it would be considered sufficient compliance with the requirement of Clause (8). This instruction was issued by the Institute in the back ground of the attitude invariably adopted by the outgoing auditors who might have felt hurt because of the change and who generally did not respond to the communication of the incoming auditor. But even according to this instruction it is necessary that the incoming auditor must obtain some kind of acknowledgement from the addressee which may be pressed into service as evidence to prove that the communication has reached the addressee which is the least requirement of the law. In the present case Mr. Bhati no doubt took the precaution of sending his letter to the respondent No. 2 under certificate of posting obtained from the post office, but I feel that such a certificate of posting looking to the rigours of the requirement of the law, cannot be accepted as an acknowledgement from the addressee.

Mr. Calla referring to Smt. Kanak Lata Ghose v. Amal Kumar Ghose, AIR 1970 Cal 328; Meghji Malsee Ltd. v. P.C. Commen of Pulivelli Kizhakkethil House, AIR 1963 Ker 306 and Commissioner of

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Hazari Bagh Municipality v. Fulchand Agarwala, AIR 1966 Pat 434 urged that it may be presumed under Section 114 of the Evidence Act that a letter once posted would reach the addressee and, therefore, in these circumstances it is urged that it should be taken that the letter sent under certificate of posting reached the addressee and therefore the certificate of posting obtained from the postal authorities must be regarded as the acknowledgement received from the addressee himself. I regret I cannot accept this contention of Mr. Calla. The obvious reason for rejecting this argument is that the provision of Clause (8) of Schedule I is couched in a language which introduces some rigidity with which the obligation cast under that provision should be discharged in order to maintain the standard of the profession. If the instructions issued by the Council are ignored then it becomes necessary under the law to see that the incoming auditor, before accepting the new assignment, should in some manner establish contact with the outgoing auditor and get at least the acknowledgement from him for the receipt of his communication addressed to his counter-part. This provision has been enacted by the legislature with a view to maintain certain standard in the profession. It is true that the council did experience certain practical difficulty in the compliance of this provision of the law and therefore by issuing instructions the rigidity of the law was diluted by providing that the incoming auditor in order to ascertain that the communication reached the addressee must obtain some kind of acknowledgement from him and it is only then that he should take up his new job. Mere obtaining a certificate of posting in my opinion does not fulfil the requirements of Clause (8) of Schedule I as the presumption under Section 114 of the Evidence Act that the letter in due course reach-led the addressee cannot replace that positive degree of proof of the delivery of the letter to the addressee which the letters of the law in this case require. The expression 'in communication with' when read in the light of the instructions contained in the booklet 'Code of Conduct' cannot be interpreted in any other manner but to mean that there should be positive evidence of the fact that the communication addressed to the outgoing auditor by the incoming auditor reached his hands. Certificate of posting of a letter cannot, in the circumstances, be taken as positive evidence of its delivery to the addressee.

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It was next urged by Mr. Calk that if the expression 'communicate with him in writing' is interpreted in the manner Mr. Jain wants it to interpret, even then his client cannot be held guilty of the breach of the law unless it was found that the letter sent by him did not reach the addressee. According to Mr. Calla the bona fides of his client are as clear as crystal to establish that he was keen to strictly comply with the requirement of Clause (8) of Schedule I. There it no doubt that Mr. Agrawal did take a stand that he never received Mr. Bhati's letter but it was not the finding of the disciplinary committee that the letter did not actually reach the addressee and unless it was held that the letter was not delivered to the addressee, the lapse on the part of Mr. Bhati cannot be viewed with that strictness with which his conduct has been judged by the Council. The breach committed by the appellant is of a technical nature and, therefore, the punishment awarded to him has been termed by the learned counsel for the appellant as severe because it carries with it a stigma. To this extent the submission of Mr. Calla is correct that neither the disciplinary committee nor did the Council record a finding that the letter sent by Mr. Bhati did not reach the hands of Mr. Agrawal. It is also correct that Mr. Bhati received the letter of his appointment on April 3, 1971, and without any less of time he discharged his obligation under Clause (8) of the schedule by despatching his communication to Mr. Agrawal on April 5, 1971. It is admitted by both the disciplinary committee and the Council that the letter was actually posted by Mr. Bhati. In these circumstances I find it difficult to attribute any mala fide motive to Mr. Bhati for not sending a registered letter acknowledgement due. By sending a letter under certificate of posting Mr. Bhati very much wanted to comply with the requirements of the provisions of clause (8) of Schedule I but probably he could not correctly assess the degree of care that he should have taken while sending his communication to Mr. Agrawal. In these circumstances he can be technically held guilty for not taking that care while communicating with the outgoing auditor which the law required him to observe. The break committed by him is of a technical nature and, therefore, punishment awarded to Mr. Bhati to remove his name from the register of the Chartered Accountants for one month appears to be severe. In my opinion the ends of justice could fairly be met if the appellant was reprimanded for not observing that degree of care which the law required him to take.

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The result is that the appeal of the appellant is partly allowed. He is no doubt found guilty of misconduct under Section 22 read with Clause (8) of Schedule I of the Act but since the misconduct is of a technical nature he shall be reprimanded. The punishment of removing his name from the register of the Chartered Accountants for one month is hereby set aside. No order as to costs. "

3. Counsel for the petitioner submits that on similar footing the

petitioner shall be satisfied if the outcome of the misconduct being

of technical nature, the same may be converted into reprimand.

4. Counsel for the respondent is unable to refute the judgment

pointed out having been identically applicable to the present

circumstance.

5. In light of the aforesaid submissions, the present writ

petition is disposed of to the limited extent that the petitioner

shall remain guilty as per the finding of the Disciplinary

Committee, however, the misconduct, which is punishable by one

month's removal is substituted by reprimand.

(DR.PUSHPENDRA SINGH BHATI),J.

99-nirmala/Sanjay-

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