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TMI Blog2017 (8) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the letter of the Securities Exchange Board of India (SEBI) dated 1st August 2017 as information that the aforesaid Chartered Accountant has committed "other misconduct". As many as four charges were framed against him. The said charges interalia were as follows:- i) The Chartered Accountant described himself as having over all control of the management of Brahaspati Finance Limited (in short BFL) in its prospectus even though he had resigned as its Director prior to opening of the public issue; ii) He has lent his name to the prospectus issued in connection with public issue of BFL thereby misleading investors and inducing them to subscribe to its shares; iii) He had made a mis-statement in prospectus and had mislead SEBI by pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10.2.2012 concluded that evidence is not sufficient to show that the aforesaid Chartered Accountant had provided a forged Chartered Accountant Certificate to the SEBI. He was however held guilty of "other misconduct" as according to his own statement he had resigned prior to the opening of the public issue of BFL but had signed the prospectus despite his alleged resignation. He had not protested against his name appearing as Director in the said prospectus. The Council considered the report of the disciplinary Committee in its meeting held on 1st June 2013 and agreeing with the report recommended to the High Court that the name of Satish Kumar Gupta, Chartered Accountant be removed from the register of members for a period of three month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said public issue or he had ceased to be its Director and he had illegally lent his name to the prospectus of the said public issue constituting "other misconduct" within the meaning of Section 22 read with Section 21 of the Act. There is no dispute to the fact that the public issue of BFL opened on 25.7.1996 and closed on 5.8.1996. The Chartered Accountant Satish Kumar Gupta had signed the prospectus of the said issue on 17.6.1996 and that his name appeared therein as the Director of the Company. According to statement of the Chartered Accountant himself he had tendered his resignation as Director of BFL prior to opening of the aforesaid public issue though the exact date has not come on record. His resignation is alleged to have been ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Articles of Association of the company also. In the case of resignation of a Director there is no formality that the Board of Directors of the company should accept it before it becomes operative. Justice Ratnavel Pandian of the Madras High Court (as he then was) in S.S. Lakshmana Pillai Vs. registrar of Companies and others 1977 (47) Companies Cases 652 on considering the entire law with regard to effective date of the resignation of the Director of a company concluded that the Director who has submitted his resignation would be deemed to have resigned from his office from the date of submission of his resignation, when the intention is unequivocally expressed either orally or by a letter. The aforesaid decision of the Madras High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c issue of BLF irrespective of the fact that his resignation was allegedly accepted on 9.9.1997, in respect whereof no material was brought on record. Having resigned before the commencement of the public issue, his name could not have appeared in the prospectus which in fact was there. This was nothing but lenting his name to the prospectus to the aforesaid public issue and misleading the investors. It is immaterial whether any investor was actually mislead. However, the Act of mis-conduct gets completed. In view of the above, we find that the disciplinary Committee has rightly held him guilty for "other mis-conduct" under Section 22 read with 21 of the Act. We do not even find that the recommendation made for removing the name of the Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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