2015 (5) TMI 89 - HC - Indian Laws

Violation of principle of natural justice - Opportunity of hearing not granted - Disciplinary proceedings - Whether the proceedings before the Disciplinary Committee of the ICAI fall foul of the principles of natural justice - Held that - It is also necessary to observe that the Disciplinary Committee had not accepted the medical certificate which was sent by the petitioner along with his request for an adjournment of the hearing scheduled on 25.11.2011 since it did not mention any particular ailment that required the petitioner to be put on bed rest. - A plain reading of Rule 18(1) of the Rules indicates that the Disciplinary Committee is to be guided by the principles of natural justice. Rule 18(7) of the Rules indicates that at the first hearing, the Disciplinary Committee is to read out the charge or charges to the respondent alongwith a summary of the prima facie opinion arrived at by the Director and ask the concerned member whether he/she pleads guilty of the charges. The proviso to Rule 18(7) of the Rules indicates that if the concerned member does not appear even after one adjournment, the reading out of charge or charges along with the summary of prima facie opinion shall be made in his absence . This, clearly, indicates that it would be necessary for the Disciplinary Committee to at least grant one adjournment on account of non appearance of the concerned member. It is also important to note that under Rule 18(9) of the Rules if the concerned member does not enter the plea of guilty, the Disciplinary Committee would fix a date for examination of witnesses and production of documents. Admittedly, in the present case the charges alongwith summary of prima facie opinion were not read as required under proviso to Rule 18(7) of the Rules. Rule 18(13) of the Rules indicates that after the Director has presented the evidence against the concerned member, he was to be called upon to enter his defence and produce his evidence. A perusal of the notes of the hearing held on 25.11.2011 indicate that the entire procedure was compressed in a single hearing as the petitioner was absent on that date. As the petitioner has an equally efficacious remedy of appeal under Section 22G of the Act. Undoubtedly, the petitioner would have an equally efficacious remedy by way of appeal under Section 22G of the Act and in normal circumstances Courts would be reluctant to interfere in proceedings under Article 226 of the Constitution of India where an equally efficacious remedy is available to the petitioner. However, it is well established that existence of an alternate remedy would not bar the jurisdiction of this Court under Article 226 of the Constitution of India. Having been persuaded to accept the view that a fair hearing ought to have been granted to the petitioner, I am unable to accept the contention that the petitioner be relegated to file an appeal under Section 22G of the Act. - Accordingly, the impugned report is set aside and the matter is remanded to the Disciplinary Committee to afford the petitioner an opportunity to be heard - Decided in favour of appellant.

Summary

Issues Involved:
1. Whether the petitioner was denied a fair opportunity to be heard by the Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI).
2. Whether the proceedings before the Disciplinary Committee violated the principles of natural justice.
3. Whether the court should interfere at this stage of the disciplinary proceedings.

Detailed Analysis:

1. Denial of Fair Opportunity to be Heard:
The petitioner argued that he was denied a fair opportunity to be heard by the Disciplinary Committee of ICAI. The complaint against the petitioner was received on 03.03.2009, and a prima facie opinion was formed by the Director (Discipline) on 04.05.2010, holding the petitioner prima facie guilty of professional misconduct under clauses (7), (8), and (9) of Part I of the second schedule to the Chartered Accountants Act, 1949. Despite multiple requests for adjournments due to travel and medical reasons, the petitioner's requests were declined. The hearing on 25.11.2011 proceeded ex-parte, and the petitioner was found guilty of professional misconduct.

2. Violation of Principles of Natural Justice:
The court examined whether the proceedings before the Disciplinary Committee adhered to the principles of natural justice. Rule 18 of the Chartered Accountants (Procedure of Investigations of Professional and other Misconduct and Conduct of Cases) Rules, 2007, mandates that the Disciplinary Committee be guided by the principles of natural justice. The court noted that the Disciplinary Committee proceeded on the erroneous assumption that the petitioner had been previously granted an adjournment, which was not accurate. The petitioner's medical certificate was not accepted, and the entire procedure was compressed into a single hearing, depriving the petitioner of the opportunity to present his defense adequately.

3. Court's Interference in Disciplinary Proceedings:
The court considered whether it should interfere at this stage of the disciplinary proceedings. The Supreme Court in *Institute of Chartered Accountants of India v. L.K. Ratna & Ors.* emphasized the importance of providing a fair hearing before pronouncing a member guilty of misconduct. The court noted that the nature of disciplinary proceedings necessitates sufficient opportunity for the concerned member to be heard. Despite the existence of an alternate remedy of appeal under Section 22G of the Act, the court decided to intervene, given the procedural irregularities and the denial of a fair hearing to the petitioner.

Conclusion:
The court set aside the impugned report dated 10.02.2012 and remanded the matter to the Disciplinary Committee to afford the petitioner an opportunity to be heard. The Disciplinary Committee was directed to schedule a hearing to allow the petitioner to present his case on the evidence and material already produced by the Director (Discipline). The petitioner was also granted the opportunity to present documents if required. The petition was disposed of with these directions, and no order as to costs was made.