2016 (9) TMI 659 - HC - Indian Laws

Professional misconduct - Chartered Accountants Act, 1949 - Held that - A professional misconduct enumerated in the First Schedule of the Act would be a category by itself and other misconduct contemplated by Sub-Section (1) of Section 21 would have to be looked outside Part I of the First Schedule. It would be a conduct which any reasonable member of the society would frown upon. Now, a professional who threatens a client would certainly commit a misconduct because the act is of a kind which is not expected by members of a civil society to be committed by a professional.We concur with the view taken by the Council and thus dispose of the Reference levying penalty of reprimand upon the respondent; the penalty is envisaged by Section 21(6)(b) of the Chartered Accounts Act, 1949.

Summary

Issues:
Complaint of professional misconduct against a Chartered Accountant under the Chartered Accountants Act, 1949.

Analysis:
The case involved a complaint made by an individual against a Chartered Accountant regarding the professional fees charged and the communication received. The complainant alleged that the Chartered Accountant raised a bill demanding a significant sum as professional fee for filing income tax returns for multiple years, accompanied by a threatening communication. A Disciplinary Committee was constituted to investigate the matter, noting evidence of services rendered and the ongoing civil suit for outstanding dues. The Committee found the language of the communication threatening and unprofessional, leading to a charge of misconduct against the Chartered Accountant.

The Committee absolved the Chartered Accountant of certain charges, including soliciting work and disclosing confidential information. However, it found the language used in the communication appended to the bill to be unbecoming of a professional. The Council, in its meeting, recommended a penalty of reprimand under Section 21(6)(b) of the Chartered Accountants Act, 1949. The judgment highlighted the definition of professional misconduct under Section 22 of the Act, emphasizing that threatening a client constitutes misconduct not expected from a professional in civil society.

The Court concurred with the Council's view and disposed of the reference by imposing a penalty of reprimand on the Chartered Accountant. The judgment clarified that professional misconduct specified in the Act is a distinct category, and any other misconduct would be evaluated based on societal expectations. The penalty of reprimand was deemed appropriate in this case, aligning with the provisions of the Chartered Accountants Act, 1949. The reference was ultimately disposed of without any costs incurred.