2023 (12) TMI 837 - HC - Indian Laws

Challenge to order directing the removal of the name of the Petitioner from the Register of Members maintained by the ICAI for a period of nine months - challenge to order passed by the Disciplinary Committee of the ICAI holding the Petitioner guilty of Professional Misconduct under the Chartered Accountants Act 1949 - violation of principles of natural justice or not. The only argument raised before the Appellate Authority was that the punishment imposed on the Petitioner is disproportionate to the misconduct committed by him and more so because the entire money has been returned back to the Society. HELD THAT - Material on record indicates that proper notices have been given to the Petitioner and the procedure as laid down in the Conduct Rules has been followed. The prima facie opinion of the Disciplinary Directorate along with all the relied on documents were forwarded to the Petitioner and the Petitioner has been given full opportunity to defend his case. There is nothing on record which discloses that the Petitioner had asked for cross examination of witnesses and in the absence of any material this Court is not inclined to accept the contention of the learned Counsel for the Petitioner that the correct procedure had not been followed - Though it has been stated in the present Writ Petition that the composition of the members of the Committee changed the same was not objected to in the hearing. In fact the material on record discloses that the Petitioner was explicitly asked if he had any objections and the Petitioner did not raise any objection to the change in the composition of the Committee. It is well settled that while exercising jurisdiction under Article 226 of the Constitution of India the Courts while interfering with the decision of Disciplinary Committee must only look into the decision-making process and not the decision as such. If the decision-making process is fair then Writ Courts must not interfere with the findings of a Disciplinary Committee. In the instant case the Petitioner has not been able to demonstrate as to how the procedure adopted by the Disciplinary Committee is not reasonable or fair or is violative of the principles of natural justice. The Petitioner is guilty of a very serious misconduct that has the ability to shake the faith of persons in the profession of Chartered Accountancy and the larger Institute of Chartered Accounts. The Appellate Authority has been considerably lenient on the Petitioner by reducing the period of punishment from one year to nine months. This Court is of the opinion that no further reduction in the quantum of punishment is necessary. Keeping in mind the seriousness of allegations against the Petitioner which have been proved in the proceedings this Court is not inclined to interfere with the judgment passed by the Appellate Authority - Writ petition is dismissed.

Summary

Issues Involved:
1. Challenge to the Order of the Appellate Authority and the Disciplinary Committee.
2. Allegations of Professional Misconduct.
3. Procedural Compliance under the Conduct Rules.
4. Admission of Guilt and Quantum of Punishment.
5. Judicial Review under Article 226 of the Constitution of India.

Summary:

1. Challenge to the Order of the Appellate Authority and the Disciplinary Committee:
The Petitioner challenges the Order dated 30.07.2023, by the Appellate Authority, ICAI, which directed the removal of his name from the Register of Members for nine months and imposed a fine of Rs. 1,00,000/-. The Petitioner also contests the Order dated 10.02.2022, by the Disciplinary Committee of the ICAI, finding him guilty of Professional Misconduct under the Chartered Accountants Act, 1949.

2. Allegations of Professional Misconduct:
A complaint was filed against the Petitioner by Dr. Kanchan Kumar Saxena, CEO of Bhopal Sahakari Dugdha Sangh, alleging that the Petitioner, while working as a Tax Consultant, had forged cheques amounting to Rs. 1.90 crores and transferred the funds into his and his wife's bank accounts instead of depositing them with the Statutory Authorities.

3. Procedural Compliance under the Conduct Rules:
The Disciplinary Directorate found that Rs. 2.60 crores had been remitted to the Petitioner through 12 cheques for tax payment, and Rs. 70 lakhs was still unrecovered. The Directorate refuted the Petitioner's claim that he was not responsible for tax deposits after 31.03.2013, citing a letter dated 03.02.2015 indicating his continued association with the Society. The Disciplinary Committee concurred with the Directorate's findings and proceeded under Chapter V of the Conduct Rules.

4. Admission of Guilt and Quantum of Punishment:
The Petitioner's authorized representative admitted to the misconduct before the Appellate Authority, only contending that the punishment was too harsh. The Appellate Authority dismissed the appeal but reduced the punishment period from one year to nine months.

5. Judicial Review under Article 226 of the Constitution of India:
The Court observed that the procedure prescribed under the Conduct Rules was followed, and the Petitioner was given full opportunity to defend his case. The Petitioner's admission of guilt before the Appellate Authority negates his challenge to procedural compliance. The Court emphasized that the role of a Chartered Accountant requires utmost sincerity and integrity. Given the serious nature of the misconduct, the Court found no grounds to interfere with the Appellate Authority's decision.

Conclusion:
The Writ Petition is dismissed, and the judgment of the Appellate Authority is upheld, maintaining the reduced punishment of nine months and a fine of Rs. 1,00,000/-.