2023 (2) TMI 474 - HC - Indian Laws

Professional and other Misconduct by Chartered Accountant - Soliciting their clientele in the guise of canvassing for votes during the club s Executive Committee elections - It was the complainant s allegation that the respondent, under the guise of soliciting votes for his candidature to the post of Officer Bearer of the Executive Committee of the said club, had represented to members of that club that he was a proprietor of M/s. D.S. Desai and Company Limited, claiming that his firm has rendered dedicated services to several corporate clients whose names were stated in the said letter. HELD THAT - The respondent and the complainant in the matter, though served on two occasions, have not put in appearance. Shri Saxena, appearing for the petitioner has taken us through the record of the disciplinary proceedings and the complaint, the written statement of the respondent and the letter written by the respondent to members of the Poona Club Limited, through which the Respondent claims he solicited votes while standing for election. The Disciplinary Committee has followed the procedure laid down under the Act and the Regulations framed thereunder. It has adhered to the principles of natural justice while conducting the inquiry; the complainant and the respondent were both afforded an opportunity of given their statements and cross-examined each other. The Disciplinary Committee had thereafter considered the evidence of the parties and after deliberating over the contents of the letter written by the respondent soliciting votes of members of the club, has arrived at findings of guilt which are entirely based upon the evidence before it - The findings do not suffered from any perversity or non consideration of the record before the Disciplinary Committee. On going through the minutes of the meeting of the Council wherein it considered the record of the Disciplinary proceedings and the findings arrived at by the Disciplinary Committee in its Report, it is opined that the Council has afforded both parties an opportunity of being heard and presenting their version before the Council in its meeting held on 19.02.2007 - further, the Council has accepted the findings of the Disciplinary Committee and there is no error in the procedure followed by the Council. The order of the reprimand (to tell somebody officially that he/she has done something wrong) of the respondent will serve the ends of justice and will be proportionate to the acts of misconduct of which the respondent has been held guilty - application referred under Sub-Section (6) of Section 21 of the said Act is disposed of.

Summary

Issues Involved:
1. Alleged professional misconduct by the respondent.
2. Inquiry and findings of the Disciplinary Committee.
3. Recommendations and actions by the Council.
4. Application of the unamended Chartered Accountants Act, 1949.

Detailed Analysis:

1. Alleged Professional Misconduct by the Respondent:
The petitioner received a complaint alleging that the respondent, a Chartered Accountant, solicited clientele under the guise of canvassing for votes during the Poona Club Ltd.'s Executive Committee elections. The complainant claimed that the respondent's letter to club members advertised his firm's services and falsely stated that he was the proprietor of M/s. D.S. Desai and Company, thereby committing professional misconduct under the Chartered Accountants Act, 1949.

2. Inquiry and Findings of the Disciplinary Committee:
Upon receiving the complaint, the Institute forwarded it to the respondent, who denied the allegations, attributing the complaint to rivalry. The Disciplinary Committee, after conducting an inquiry and hearing both parties, found the respondent guilty of misconduct. The Committee noted that the respondent falsely claimed to be the proprietor of M/s. D.S. Desai and Company and advertised his professional services, violating Clauses (6) and (7) of Part I of the First Schedule of the Act and committing "other misconduct" under Section 22 read with Section 21 of the Act.

3. Recommendations and Actions by the Council:
The Council reviewed the Disciplinary Committee's report, the evidence, and the statements from both parties. Despite multiple adjournments requested by the respondent, the Council ultimately accepted the Committee's findings and held the respondent guilty of professional and other misconduct. The Council recommended reprimanding the respondent and referred the case to the High Court for necessary orders.

4. Application of the Unamended Chartered Accountants Act, 1949:
The case was governed by the provisions of the unamended Chartered Accountants Act, 1949, as the complaint was filed before the amendments introduced by the Chartered Accountants (Amendment) Act, 2006. The Court acknowledged that the Council and the Disciplinary Committee followed the prescribed procedures and principles of natural justice, ensuring both parties had the opportunity to present their cases.

Conclusion:
The High Court concluded that the Disciplinary Committee and the Council adhered to the procedures laid down under the Act and the Regulations. The findings of guilt were based on substantial evidence, and the order of reprimand was deemed proportionate to the respondent's misconduct. The application under Section 21(6) of the Act was disposed of in these terms.