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1976 (11) TMI 216 - HC - Indian Laws

Issues Involved:
1. Whether the respondent-chartered accountant is guilty of professional misconduct for allowing his articled clerk to engage in other employment without prior permission of the Council.
2. The power and jurisdiction of the High Court under Section 21(6) of the Chartered Accountants Act, 1949.
3. The standard of proof required in disciplinary proceedings against a chartered accountant.
4. The applicability of Regulation 36 of the Chartered Accountants Regulations, 1964.

Detailed Analysis:

Issue 1: Professional Misconduct
The primary issue was whether the respondent-chartered accountant allowed his articled clerk, Vijay Kumar Gupta, to engage in other employment without prior permission from the Council, thereby committing professional misconduct as defined under Section 22 of the Chartered Accountants Act, 1949. The Council of the Institute of Chartered Accountants of India received information that the respondent allowed his clerk to work full-time at Liberty Insurance Co. Ltd., Indore, during the period of his articles. The respondent denied knowledge of the clerk's employment and claimed that the clerk was dedicated to his office work. The Disciplinary Committee, after an inquiry, concluded that the respondent was aware of the clerk's employment and failed to inform the Council, thus committing professional misconduct.

Issue 2: High Court's Jurisdiction
The High Court's jurisdiction under Section 21(6) of the Act is broad, allowing it to examine the entire material on record and arrive at its own conclusions on both facts and law. The Court is empowered to direct that the proceedings be filed, dismiss the complaint, reprimand the member, remove him from membership, or refer the case for further inquiry. The Court emphasized that its jurisdiction is not limited to questions of law or procedure but extends to a thorough review of the findings of the Disciplinary Committee and the Council.

Issue 3: Standard of Proof
The Court observed that disciplinary proceedings under the Chartered Accountants Act are quasi-judicial and quasi-criminal in nature, akin to criminal prosecutions. Therefore, the standard of proof required is beyond reasonable doubt. The burden of proof lies on the Council or the complainant to establish the guilt of the chartered accountant with legal and satisfactory evidence. The Court rejected the notion that the onus shifts to the respondent once a prima facie case is established, emphasizing that the respondent is entitled to the benefit of doubt if the evidence is not conclusive.

Issue 4: Applicability of Regulation 36
Regulation 36 prohibits an articled clerk from engaging in any other occupation during the period of articles without prior permission from the Council. The charge against the respondent was that he allowed his clerk to work at Liberty Insurance Co. Ltd. without such permission. The Court noted that there was no direct evidence proving that the respondent had knowledge of the clerk's employment. The testimony of the clerk and the lack of examination of key witnesses, such as the custodian of the insurance company and the clerk's father, weakened the case against the respondent.

Conclusion:
The High Court concluded that there was no positive and conclusive proof that the respondent-chartered accountant was aware of the clerk's employment during office hours. The evidence on record did not support the charge of professional misconduct. The Court emphasized that the respondent could not be held liable without clear evidence of connivance or knowledge. Consequently, the Court dismissed the complaint against the respondent-chartered accountant, finding no professional misconduct. The Court also declined to refer the case back to the Council for further inquiry, considering the inconvenience already caused to the respondent.

 

 

 

 

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