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2013 (10) TMI 407 - HC - Companies LawRemoval of membership - member of ICAI - professional misconduct - Confirmation of punishment - Held that - complainant settled the matter with the complainant before Company Law Board and then wrote to the petitioner that he does not press his complaint against the contesting respondent, the disciplinary committee and the council were not justified in continuing with the proceedings as the very basis of the proceedings, i.e., the complaint on the basis of which the proceedings had been initiated, had become non-existent. It is not the case of the petitioner that the settlement reached before the Company Law Board and request of the complainant that he does not press the complaint were not in the knowledge of the disciplinary committee and the council. The two documents, in fact, form part of the report of the disciplinary committee. No reasons have been given for ignoring the settlement and as regards request of the complainant not to press the complaint - Neither the disciplinary committee nor the council has referred to the evidence on the basis of which the charge is stated to have been proved. Finding of the disciplinary committee and decision of the council, therefore, are found to be perverse and not backed by evidence - Appeal dismissed.
Issues:
1. Reference under Section 21 of the Chartered Accountants Act, 1949 seeking confirmation of punishment for professional misconduct. 2. Allegations of professional misconduct against the contesting respondent. 3. Settlement between complainant and respondent before the Company Law Board. 4. Failure to substantiate allegations and lack of evidence in the disciplinary proceedings. Issue 1: Reference under Section 21 of the Chartered Accountants Act, 1949 seeking confirmation of punishment for professional misconduct: The Institute of Chartered Accountants of India filed a reference under Section 21 of the Chartered Accountants Act, 1949, seeking confirmation of the proposed punishment of removing the name of the respondent from the register of members for one month due to professional misconduct. The Council found the respondent guilty of professional misconduct and decided to make a reference to the High Court for confirmation of the punishment. Issue 2: Allegations of professional misconduct against the contesting respondent: The respondent was found guilty of professional misconduct for not complying with Accounting Standards in the Auditor's Report for the year ending 31st March, 2000. The Council held the respondent guilty under specific charges falling within the meaning of the Chartered Accountants Act, 1949. However, the complainant did not appear before the disciplinary committee or the Council to substantiate the allegations, which remained unsubstantiated. Issue 3: Settlement between complainant and respondent before the Company Law Board: A settlement was reached between the complainant and the respondent before the Company Law Board, resulting in the complainant not pressing the charges against the respondent. The Company Law Board conveyed that nothing survived in the complaint due to the settlement. Despite this settlement, the disciplinary committee and the Council proceeded with the complaint, ignoring the settlement and the complainant's request not to press the charges. Issue 4: Failure to substantiate allegations and lack of evidence in the disciplinary proceedings: The disciplinary committee and the Council failed to provide evidence or substantiate the allegations against the respondent. The complainant settling the matter and not pressing the charges should have led to the termination of proceedings. The decision of the disciplinary committee and the Council was deemed perverse and unsupported by evidence, leading to the rejection of the reference. In conclusion, the High Court rejected the reference due to the failure to substantiate allegations, lack of evidence, and the existence of a settlement between the parties that should have terminated the proceedings. The Court directed that the proceedings be filed accordingly.
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