2019 (8) TMI 415 - HC - Indian Laws

Repeated complaints against various Chartered Accountants - Professional misconduct falling within the meaning of Clauses (5) to (9) of Part I of the Second Schedule to the Chartered Accountants Act, 1949 - activity which may be carried on as incidental or ancillary to attainment of the main object - composition of Board of Directors - statements verified by HA to the effect that Hasham did not have any subsidiary. HELD THAT - The conduct of ICAI s member (a Chartered Accountant) is to be evaluated by the concerned authorities of ICAI. The object is to ensure that its members measure up to the standards as set by ICAI for continuing as its member. As stated earlier, the matter is, essentially, between ICAI and its members. This is also the rationale for not providing any appellate remedy to the complainant against the decision of the concerned authorities in terms of Section 22G of the Act. This right is only available to an aggrieved Member of ICAI - This court is also of the view that it is not apposite to supplant its views over the views of the concerned authorities (Board of Discipline or Disciplinary Committee), as the case may be. The petitioner has been pursuing complaints against various members of ICAI with relentless fervour and has filed various petitions before this Court in pursuance of its complaints. This Court is of the view that litigants, such as the petitioner, who have made litigation their business/vocation ought to be discouraged - the present petition is dismissed with costs quantified at ₹1,00,000/-. Application disposed off.

Issues Involved:
1. Allegations of professional misconduct against a Chartered Accountant (HA).
2. Petitioner's standing and authority to file the complaint.
3. The nature and context of the complaint.
4. The role and jurisdiction of the Board of Discipline and ICAI.
5. The court's stance on repeated litigation by the petitioner.

Issue-wise Detailed Analysis:

1. Allegations of Professional Misconduct Against a Chartered Accountant (HA):
The petitioner, a private company, challenged an order dated 26th February 2018 by the Board of Discipline, which concurred with the Director (Discipline) of ICAI's prima facie opinion that HA was not guilty of professional misconduct under Clauses (5) to (9) of Part I of the Second Schedule to the Chartered Accountants Act, 1949. The allegations pertained to HA verifying forms (Forms-23AC) containing false statements regarding seven companies for various financial years from 2009-10 to 2013-14. The petitioner claimed the forms did not recognize Hasham as a holding company of three subsidiaries, which was allegedly incorrect.

2. Petitioner's Standing and Authority to File the Complaint:
The court noted that the petitioner had no direct relation with HA or the seven companies involved and was filing the complaint purportedly for the general benefit of the profession. The petitioner had a history of filing multiple complaints against various Chartered Accountants and pursuing them on a professional scale. The court questioned the petitioner's authority under its Memorandum of Association to pursue such complaints. The petitioner cited Clauses 4 and 32 of its Memorandum, which the court found unmerited as these clauses were incidental or ancillary to the main business objects and not independent objectives.

3. The Nature and Context of the Complaint:
The court observed that the petitioner had not provided sufficient material to prove that Hasham controlled the composition of the Board of Directors of the other companies, as required under Section 4(1)(a) of the Companies Act, 1956. The companies in question were closely held private entities with no public interest element involved. Even if there was an error in the forms verified by HA, it was doubtful that it constituted gross negligence warranting disciplinary action.

4. The Role and Jurisdiction of the Board of Discipline and ICAI:
Disciplinary proceedings by ICAI are intended to maintain professional standards among its members and are not private disputes between the complainant and the Chartered Accountant. The court emphasized that the evaluation of a member's conduct is primarily a matter between ICAI and its members, and the complainant acts merely as a relater party. The court also noted the lack of an appellate remedy for the complainant against decisions of the Board of Discipline or Disciplinary Committee, reinforcing the internal nature of these proceedings.

5. The Court's Stance on Repeated Litigation by the Petitioner:
The court expressed concern over the petitioner's repeated litigation, which appeared to be conducted as an organized activity independent of its main business objects. The court had previously imposed costs on the petitioner for similar actions, which seemed ineffective in discouraging such behavior. Consequently, the court dismissed the present petition with costs of ?1,00,000 to be deposited with the Delhi High Court Legal Services Committee within two weeks.

Conclusion:
The petition was dismissed with costs, and the court underscored the importance of discouraging litigants who pursue litigation as a vocation, thereby consuming considerable judicial time on matters of little significance. The court upheld the decision of the Board of Discipline and ICAI, emphasizing the internal nature of disciplinary proceedings within professional bodies.

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