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TMI Blog2014 (1) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... Shriram, J The petitioners seek a blanket stay against the respondents in any manner whatsoever conducting, proceeding further with or passing any order in the enquiry initiated against them pursuant to two show cause notices dated 6th December 2006 and 23rd October 2007 till the decision of the Supreme Court in P.Ramakrishna Institute of Chartered Accounts of India [Civil Appeal No.6142 of 2012] (Ramkrishna's appeal). The petitioners are not parties to that case. 2. Petitioner no.1 is a partner of Price Waterhouse and Co., a firm of Chartered Accountants. (hereinafter referred to as PWC). PWC were the statutory auditors of the Global Trust Bank Ltd., of the respondents' firm. The petitioner no.2 is a Senior Manager of the said firm. Both the petitioners are members of the respondent no.1- the Institute of Chartered Accountants of India. 3. Respondent no.1 is set up under the Chartered Accountants Act, 1949 (hereinafter referred to as the said Act). Respondent no.2 is the Council of the 1st respondent. Respondent no.3 is the Disciplinary Committee of which Respondent nos.3A, 3B and 3C are the members. Respondent no.4 is the Director (Discipline) of the 1st respondent. Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If on receipt of such report the Council finds that the member of the Institute is not guilty of any professional or other misconduct, it shall record its finding accordingly and direct that the proceedings shall be filed or the complaint shall be dismissed, as the case may be. (3) If on receipt of such report the Council finds that the member of the Institute is guilty of any professional or other misconduct, it shall record a finding accordingly and shall proceed in the manner laid down in the succeeding sub-sections. (4) Where the finding is that a member of the Institute has been guilty of a professional misconduct specified in the First Schedule, the Council shall afford to the member an opportunity of being heard before orders are passed against him on the case, and may thereafter make any of the following orders, namely: (a) reprimand the member; (b) remove the name of the member from the Register for such period, not exceeding five years, as the Council thinks fit: Provided that where it appears to the Council that the case is one in which the name of the member ought to be removed from the Register for a period exceeding five years or pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ludes a person who was a member of the Institute on the date of the alleged misconduct although he has ceased to be a member of the Institute at the time of the inquiry. (8) For the purposes of any inquiry under this section, the Council and the Disciplinary Committee shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908 .), in respect of the following matters, namely: (a) summoning and enforcing the attendance of any person and examining him on oath; (b) the discovery and production of any document; and (c) receiving evidence on affidavit." 7. By the amended Act, Section-21 of the un-amended Act was replaced with sections 21, 21-A, 21-B, 21-C and 21-D. 21-D is a transitional provision. Section 21, 21-A,21-B, 21-C 21-D read as under : MISCONDUCT 21 Disciplinary Directorate. (1) The Council shall, by notification, establish a Disciplinary Directorate headed by an officer of the Institute designated as Director (Discipline) and such other employees for making investigations in respect of any information or complaint received by it. (2) On receipt of any in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Discipline) shall submit before the Board of Discipline all information and complaints where he is of the opinion that there is no prima-facie case; and the Board of Discipline may, if it agrees with the opinion of the Director (Discipline), close the matter or in case of disagreement, may advise the Director (Discipline) to further investigate the matter. 21B. Disciplinary Committee. (1) The Council shall constitute a Disciplinary Committee consisting of the President or the Vice-President of the Council as the Presiding Officer and two members to be elected from amongst the members of the Council and two members to be nominated by the Central Government from amongst the persons of eminence having experience in the field of law, economics, business, finance or accountancy: Provided that the Council may constitute more Disciplinary Committees as and when it considers necessary. (2) The Disciplinary Committee, while considering the cases placed before it shall follow such procedure as may be specified. (3) Where the Disciplinary Committee is of the opinion that a member is guilty of a professional or other misconduct mentioned in the Second Schedule or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and held that the procedure prescribed by Sections 21, 22 22-A of the un-amended Act would be applicable to the pending proceedings and information cases and not the procedure prescribed by the amended Act. This was taken further by the respondent to the said Appeal to the Supreme Court by way of the said SLP-Ramkrishna's Appeal. The Hon'ble Supreme Court by its order dated 24th August 2012 granted leave, directed that the final order be not passed by the Institute in so far as the appellant was concerned and posted the appeal for hearing within one year from the date of the order, i.e., 24th August 2012. The appeal is pending. 9. It is the case of the petitioners that even in their case the 1st respondent has initiated the inquiry based on information received from the RBI and not on the basis of a complaint and therefore, unless and until the Supreme Court decides the matter, the proceedings adopted by the 1st respondent against the petitioners should be stayed. 10. The petitioners have not stated in the petition whether according to them the amended or the unamended provisions apply. We therefore, enquired of Mr. Chagla as to which procedure is applicable according to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that in the event of the Supreme Court overruling the judgment of the Delhi High Court inconvenience may be caused to the petitioners. However in the facts and circumstances of the case we are not inclined to accede to the petitioners' request. On the other hand in the event of the judgment of the Delhi High Court being upheld, precious time would have been lost. There is every possibility of witnesses not being available at a later point of time and the memory of the witnesses fading. On a balance therefore, it is in the interest of justice that the proceedings continue even assuming that there is a possibility of the parties facing some monetary loss. 17. This is a case where the petitioners do not contend that either the amended or unamended provisions of the Act apply. They merely state that the proceedings ought to be stayed till the Supreme Court decides as to which provisions apply. If merely on this basis Courts grant a stay of proceedings it would result in innumerable proceedings remaining dormant not merely under this Act but even under other enactments, enquiries etc. We do not suggest that a stay can never be granted. There may be certain cases where the Court or T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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