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TMI Blog2015 (3) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... matters pertaining to profession of chartered accountants and know the intricacies of the profession on account of their personal experience. Moreover, the said bodies have been created to maintain a high standard of conduct and discipline amongst the members of the petitioner institute. Thus, unless gross violation or disregard of the provisions of the Act or the Regulations made thereunder or of the principles of natural justice and fairness is to be found, this Court would be slow to interfere with the finding of such professional bodies. We accordingly accept the recommendation of the petitioner institute and remove the respondent No.1 from the membership of the petitioner institute for a period of six months effective from this date. - CHAT.A.REF. NO. 5 OF 2012 - - - Dated:- 10-7-2014 - RAJIV SAHAI ENDLAW, J. Rakesh Agarwal and Pulkit Agarwal for the Petitioner. Anuj Aggarwal and Ms. Niti Jain for the Respondent. JUDGMENT 1. The petitioner, having found the respondent No.1 Chartered Accountant guilty of misconduct other than any such misconduct as is referred to in Section 21(4) of The Chartered Accountants Act, 1949 (hereinafter referred to as 'the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplainant company in future. Believing the said representation of the respondent No.1, the complaint was withdrawn. (d) however, the respondent No.1 continued to engage himself in unprofessional activities against the complainant company, by retaining the records even after he tendered No Objection Certificate dated 26th September, 1992; (e) that upon the former Managing Director of the complainant company approaching the respondent No.1, he demanded money in return for the books of accounts and statutory records of the complainant company in his possession and also threatened that if the said consideration was not paid, the complainant company would have to suffer dire consequences. A complaint dated 21st January, 1995 was filed by the complainant company with the police in this regard, but the respondent No.1 managed to dodge the said complaint and did not return the books of accounts and other records of the complainant company; (f) that the respondent No.1, thereafter started to falsify the records of the complainant company and managed to file bogus Form 2, 32, etc. in the office of Registrar of Companies appointing Sh. Sanjay Daksha, Sh. Sofi-ur-rehman, Sh. Binod Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company as well as the respondent No.1; the respondent No.1 pleaded not guilty; the matter was inquired into and the disciplinary proceedings concluded; the Disciplinary Committee vide its report dated 10th February, 2001 was of the opinion that the respondent No.1 was guilty of professional misconduct on the charges of:- A. filing of bogus Form 2, 32, etc. in the office Registrar of Companies appointing Sh. Sanjay Daksha, Sh. Sofi-ur-rehman, Sh. Binod Rajhans as Directors of the complainant company and of taking undue and false interest in the matters of the complainant company after his resignation as Auditor thereof in the year 1992, as is evident from his appearance aforesaid before the Company Law Board; and B. having audited the books of accounts of the complainant company after 1992 and having signed the balance sheets as Auditor of the complainant company from the year 1995-2003 and which were filed with the Registrar of Companies on 8th March, 2004. the Disciplinary Committee, however held the respondent No.1 not guilty of professional and/or other misconduct on the charges of, (a) having demanded consideration for return of books of accounts and statutory records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he office of Registrar of Companies and on the basis whereof Sh. Sanjay Daksha, Sh. Sofi-ur-rehman, Sh. Binod Rajhans were claimed to be the shareholders and Directors of the complainant company since the year 1993. (III) no additional fees, as required to be paid for late filing of Form 32, had also been paid. (IV) The Company Law Board had also taken cognizance of the aforesaid facts. (V) Sh. Sanjay Daksha, Sh. Sofi-ur-rehman, Sh. Binod Rajhans claimed to have become the shareholders of the complainant company on transfer of shares in their favour, but were unable to produce Form No.2 and there were other discrepancies also in relation to the said transfer and there were other omissions in the share certificates. (VI) Sh. Sanjay Daksha, Sh. Sofi-ur-rehman, Sh. Binod Rajhans had before the Company Law Board admitted that Sh. Sudhir Gupta was a Director of the complainant company till 4th October, 1999; the said Sh. Sudhir Gupta had deposed that Ms. Mausumi Bhattacharjee was in total control of the affairs of the complainant company holding 94% shares in the company and that the said Sh. Sanjay Daksha, Sh. Sofi-ur-rehman, Sh. Binod Rajhans were not connected with the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets together with the Registrar of Companies on 8th March, 2004. (XI) The respondent no.1 had failed to bring any evidence on record to establish himself as having been duly appointed by the company for the purpose of statutory audit. (XII) That during the period when the respondent no.1 filed the balance sheets of the complainant company as Statutory Auditor in the name of a closed Chartered Accountants firm V.S. Verma Sood, he was the proprietor of the firm V.P. Verma Company. (XIII) The respondent No.1 was not eligible to use the name of the closed Chartered Accountants firm V.S. Verma Sood and which he was not entitled to and the respondent No.1 was thus guilty of contravention of Regulation 190(1) of the Chartered Accounts Regulation, 1988. (XIV) That the respondent no.1 inspite of repeated opportunity failed to produce the document of his appointment as auditor of the complainant company and from which it was evident that the respondent no.1 had signed the balance sheets of the complainant company for the years 1995 to 2003 without a valid appointment. (XV) That from the aforesaid conduct of signing of balance sheets of the company without authority in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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