2019 (5) TMI 985 - HC - Indian Laws

Criminal breach of trust - disciplinary proceedings commenced by the Institute of Chartered Accountants of India (ICAI) pursuant to a complaint filed by the SFIO with the ICAI - It is the petitioner s case that he was not complicit with the Management but is also a victim of the fraud perpetrated by the Management of RIC - HELD THAT - This Court is refraining from making any observations regarding the said matter as the same is pending before this Court; but suffice it to state that the petitioner s case is not on identical footing as the case of the petitioners in that case. Even if it is assumed that the petitioner s case has some similarity, the pendency of that petition does not assist the petitioner in any manner as this Court has examined the petitioner s contention in this regard. Challenge to the SFIO report - HELD THAT - Learned counsel appearing for the petitioner fairly states that the petitioner reserves its right to contest the same in an appropriate proceeding and this Court is not called upon to examine on the same. Petition dismissed.

Summary

Issues:
- Challenge to Investigation Report by SFIO
- Challenge to SFIO Complaint submitted to ICAI
- Challenge to SCN issued by ICAI
- Stay on disciplinary proceedings by ICAI
- Comparison with similar case pending before the Court

Analysis:
1. The petitioner sought writs to quash the Investigation Report by SFIO, SFIO Complaint to ICAI, and SCN issued by ICAI. Allegations suggested the petitioner's complicity with RIC's management in fraudulent activities.

2. The petitioner contested being complicit, claiming victimhood due to RIC's fraud. Argued against the need for deeper scrutiny as an auditor, distinguishing it from an investigator's role.

3. Petitioner requested a stay on ICAI's disciplinary proceedings until the criminal case's final decision. Cited being a witness in a similar case as proof of non-complicity.

4. The Court dismissed the need for a stay, differentiating the scopes and standards of proof in criminal and disciplinary proceedings. Referenced a previous case to support this stance.

5. The Court rejected the comparison with a similar case, emphasizing differences in audit scope and liabilities. Declined to comment on the pending case but clarified the petitioner's case's distinct nature.

6. The challenge to the SFIO report was not examined, as the petitioner reserved the right to contest it separately. The petition was dismissed, with all contentions reserved for future fora.