2010 (11) TMI 1134 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the complaint against the Respondent.
2. Examination of the genuineness of M/s Impex Services.
3. Professional misconduct by the Respondent.
4. Recommendations and decisions of the Disciplinary Committee and Council.
5. Legal proceedings and appeals by the Respondent.

Summary:

1. Validity of the Complaint Against the Respondent:
The Central Bureau of Investigation (CBI) alleged that the Respondent, a Chartered Accountant, issued a bogus certificate dated 15th February 1984, certifying the value of exports by a fictitious firm, M/s Impex Services, Amritsar. This certificate led to the issuance of an advance import licence, resulting in a financial loss to the Government of India. The complaint was forwarded to the Respondent by the Council of the Institute of Chartered Accountants, which initiated disciplinary proceedings.

2. Examination of the Genuineness of M/s Impex Services:
The Disciplinary Committee framed specific issues to determine the genuineness of M/s Impex Services, including summoning the firm's partners and verifying the export figures certified by the Respondent. The investigation revealed that the firm was fictitious, and the address provided was merely a rented room for receiving letters. The Bank of India confirmed that the firm did not have an account with them at the relevant time.

3. Professional Misconduct by the Respondent:
The Disciplinary Committee found the Respondent guilty of professional misconduct u/s 21 read with Section 22 of the Chartered Accountants Act, 1949, under Clauses (7) & (8) of Part I of the Second Schedule. The Respondent's failure to provide working papers and the issuance of a bogus certificate were key factors in this determination. The Committee reiterated its opinion in its report dated 03.02.2002, confirming the Respondent's guilt.

4. Recommendations and Decisions of the Disciplinary Committee and Council:
The Council of the Institute of Chartered Accountants accepted the Disciplinary Committee's reports and recommended to the High Court that the Respondent be removed from the Register of Members for six months. The Council's decision was based on the professional misconduct findings and the need to uphold the integrity of the profession.

5. Legal Proceedings and Appeals by the Respondent:
The Respondent challenged the Council's decision by filing a suit for declaration, mandatory injunction, and perpetual injunction, which was dismissed by the Civil Judge. The Respondent's appeal was also dismissed as infructuous. Despite multiple litigations over 25 years, the High Court ultimately decided not to confirm the six-month punishment due to the prolonged litigation and the Respondent's age.

Conclusion:
The High Court dismissed the present reference with no order as to costs, considering the long duration of litigation and the Respondent's age. Consequently, RSA No. 180/2004 filed by the Respondent was deemed infructuous and disposed of accordingly.