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2019 (9) TMI 1204 - HC - Indian LawsMaintainability of Letters Patent Appeal - locus of the appellant- complaint against the Chartered Accountant (CA) after 7 years of audit - Appellant / complainant not satisfied with the order of passed by Board of Discipline discharging the CA - Single Judge bench dismissed the appeal on the ground that appellant has nothing to do with the companies under question - it was further observed that, the complaint should not be entertained as the auditors are not bound to keep their working papers beyond seven years and therefore all the relevant audit papers may not be available for reply to the complaint. HELD THAT - We are in full agreement with the reasons given by the learned Single Judge. There is no substance in this LPA and the same is, therefore, dismissed.
Issues Involved:
1. Exemption Applications (CM APPL. Nos. 40451-40452/2019) 2. Dismissal of the Original Writ Petition (W.P.(C) 8081/2019) 3. Authorization to File Complaint under Rule 3(4) of the Rules, 2007 4. Time Barred Complaint under Rule 12 of the Rules, 2007 5. Locus Standi of the Appellant 6. Harassment Allegation against the Respondent Chartered Accountant Issue-wise Detailed Analysis: 1. Exemption Applications (CM APPL. Nos. 40451-40452/2019): The court allowed the exemption applications, subject to all just exceptions, and disposed of the applications accordingly. 2. Dismissal of the Original Writ Petition (W.P.(C) 8081/2019): The appellant, a trading company, filed W.P.(C) 8081/2019 challenging orders from the Board of Discipline and Director (Discipline) under the Chartered Accountants Act, 1949, and the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007. The writ petition was dismissed with costs of ?1 lakh by the learned Single Judge on 1st August 2019. The appellant then preferred the present Letters Patent Appeal against this dismissal. 3. Authorization to File Complaint under Rule 3(4) of the Rules, 2007: The appellant argued that under Rule 3(4) of the Rules, 2007, it had general authorization to file the complaint without needing specific authorization. However, the court noted that Rule 3(4) requires a resolution specifically authorizing the filing of "the complaint" in question, not just any complaint in general. The appellant lacked specific authorization to file the complaint against the chartered accountant, Mr. Jayesh M. Gandhi, which was properly appreciated by the learned Single Judge. 4. Time Barred Complaint under Rule 12 of the Rules, 2007: The complaint, filed on 26th September 2016, pertained to audit reports from 2005-06 to 2008-09. The court observed that the complaint was filed more than seven years after the last audit report, making it time-barred under Rule 12 of the Rules, 2007. The Director (Discipline) and the Board of Discipline had correctly determined that the delay caused difficulty for the chartered accountant in securing evidence and defending himself, as audit records are typically maintained for only seven years. 5. Locus Standi of the Appellant: The appellant claimed that there is no requirement for locus standi to file a complaint against a chartered accountant. However, the court found that the appellant had no connection or cause of action with the seven companies involved in the complaint. The appellant's lack of specific authorization and the time-barred nature of the complaint further weakened its position. 6. Harassment Allegation against the Respondent Chartered Accountant: The court noted that the appellant appeared to be harassing the respondent, Mr. Jayesh M. Gandhi, by filing the complaint several years after the audits without any justifiable reason. The learned Single Judge had appropriately appreciated these aspects while dismissing the writ petition. Conclusion: The court found no reason to entertain the Letters Patent Appeal, agreeing with the learned Single Judge's reasoning. The complaint was time-barred, lacked specific authorization, and appeared to harass the respondent. Consequently, the appeal was dismissed, and the application for stay was disposed of in view of the orders passed in the writ petition.
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