1997 (7) TMI 649 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the Council has the power to direct the Disciplinary Committee to hold further enquiry when the Disciplinary Committee finds a member not guilty.
2. Whether the Council applied its mind in referring the matter for further enquiry.

Summary:

Issue 1: Power of the Council to Direct Further Enquiry
The Supreme Court examined whether the Council of the Institute of Chartered Accountants of India has the authority to direct the Disciplinary Committee to conduct further enquiry when the Committee finds a member not guilty of professional or other misconduct. The High Court had held that Regulation 16 does not permit the Council to direct further enquiry in such cases. The Supreme Court, however, disagreed, stating that the Council retains ultimate control over the conduct of its members and has the power to call for further reports from the Disciplinary Committee. The Court emphasized that the Council must maintain discipline among its members and that the Disciplinary Committee's findings are not conclusive. The Court concluded that the Council can direct further enquiry to ensure thorough examination of misconduct allegations, thereby reversing the High Court's decision.

Issue 2: Application of Mind by the Council
The respondent argued that the Council had not applied its mind to the facts before referring the matter for further enquiry. The Supreme Court found that the Council had indeed considered the report of the Disciplinary Committee and the respondent's written statement, as evidenced by the detailed questionnaire it provided for further enquiry. The Court noted that the Council's decision was not mechanical but involved active consideration of various aspects related to the alleged misconduct. Therefore, the Supreme Court held that the Council had applied its mind appropriately.

Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's judgment, and upheld the Council's direction to the Disciplinary Committee to conduct further enquiry and submit a report. The appeal was allowed without costs.