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TMI Blog2021 (10) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... t, "the Institute") from the Office of the Inspecting Assistant Commissioner of the Income Tax alleging that the appellant had deposited in local treasury unit of Incometax Department at Agra a total sum of Rs. 2514/ being the last digit of amount, outstanding against the assessees. The Office of the Inspecting Assistant Commissioner of the Income Tax further alleged that the appellant had interpolated assessees' copies of challans to show higher figures and claimed the higher amount from them. The said information was conveyed to the appellant vide Institute's letter dated 14.02.1980 and he was requested to send his written statement in response. The appellant submitted his duly verified written statement dated 18.10.1980. At its 96th meeting held on 20/21.07.1981, the Council of the Institute (for short, "the Council")was of the prima facie opinion that the appellant was guilty of professional and/or other misconduct and accordingly referred the case to the Disciplinary Committee constituted under the Chartered Accountants Act, 1949 (for short, "the Act"). 3. The Disciplinary Committee held various meetings between 05.10.1981 and 21/22.02.1989 for the purpose of enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel was out of Delhi and in his absence, it was not possible for him to proceed with the case. He again requested for postponement of the hearing. This process went on till the month of September 1994. On 02.09.1994 the appellant appeared before the Council and made his oral submissions. The Council passed the following orders: "On consideration of the report of the Disciplinary Committee, written representations and the oral submissions made by the respondentD.K. Agrawal before the Council on 2nd September, 1994, the Council accepted the Report of the Disciplinary Committee and found that the respondent was guilty of "other misconduct" under Section 22 read with Section 21 of the Chartered Accountants Act, 1949. The Council also decided to recommend to the High Court that the name of the respondent be removed from the Register of Members for a period of two years." 4. The respondentInstitute, after the lapse of about five years of the report of the Disciplinary Committee, made a reference bearing Reference No.1 of 1999 before the High Court of Judicature at Allahabad for removal of the name of the appellant from the register of the membership for two years. The H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with Section 22 of the Act. A copy of the report of the Disciplinary Committee was forwarded to the appellant as also to the complainant vide Institute's letter dated 08.08.1991 and they were informed that the report would be considered by the Council at one of its forthcoming meeting and that they were required to send their written representations, if any, and also if they so desired, to appear before the Council either in person and/or through a member of the Institute duly authorized by them at the time of the consideration of the report. 8. The report of the Disciplinary Committee was fixed for consideration by the Council at its meeting scheduled to the held from 5th to 7th August, 1993. At the request of the appellant, the matter was adjourned. The appellant went on taking time for hearing. Finally, on consideration of the report of the Disciplinary Committee and the written representations of the appellant, the Council accepted the report of the Disciplinary Committee and found that the appellant guilty of "other misconduct" under Section 21 read with Section 22 of the Act insofar as the first two charges were concerned and he was also found guilty of professional miscon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttee which, according to him, was made with a predetermined mind and that it is perverse and contrary to the materials placed on record. 13. On the other hand, learned counsel appearing for the respondentInstitute has submitted that taking into consideration the materials on record and also the written statements and submissions of the appellant, the Council had come to the conclusion that the appellant was guilty of misconduct. The High Court has very rightly confirmed the recommendations of the Council and has allowed the references accordingly. There is no error in the report of the Disciplinary Committee or in the order of the Council. Therefore, the appellant cannot find fault with the judgment of the High Court. He prays for dismissal of the appeals. 14. We have carefully considered the submission of the learned counsel for the parties and also perused the materials placed on record. 15. The Institute of Chartered Accountants of India is a statutory body created by an Act of Parliament that is the Chartered Accountants Act, 1949. In accordance with Section 9 of the Act, the management of the affairs of the Institute are vested in the Central Council. The Council ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 permanently, it shall not make any order referred to in Clause (a) or Clause (b), but shall forward the case to the High Court with its recommendations thereon. (5) Where the misconduct in respect of which the Council has found any member of the Institute guilty is misconduct other than any such misconduct as is referred to in Subsection (4), it shall forward the case to the High Court with its recommendations thereon (6) On receipt of any case under subsection (4) or subsection (5), the High Court shall fix a date for the hearing of the case and shall cause notice of the date so fixed to be given to the member of the Institute concerned, the Council and to the Central Government, and shall afford such member, the Council and the Central Government an opportunity of being heard, and may thereafter make any of the following orders, namely: (a) direct that the proceedings be filed, or dismiss the complaint, as the case may be; (b) reprimand the member; (c) remove him from membership of the Institut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is necessary, shall cause such further enquiry to be made whereupon a further report shall be submitted by the Disciplinary Committee. (3) The Council shall, on the consideration of the report and the further report, if any, record its findings. (4) If the finding is that there is no case for passing one of the orders specified in clauses (a) or (b) of subsection (4) of section, the complainant and the respondent shall be informed accordingly. 15. Procedure in a hearing before the Council. (1) If the Council, in view of its findings, is of opinion that there is a case for passing one of the orders specified in clauses (a) or (b) of subsection (4) of Section 21, is shall- (a) furnish to the respondent a copy of the report of the Disciplinary Committee and a copy of its findings: and (b) give him a notice indicating the order proposed to be passed against him and calling upon him to appear before it on a specified date or if he does not wish to be heard in person, to send within a specified time, such representation in writing as he may wish to make against the proposed order. (2) The scope of the hearing or of the representation inwriting, as the case may be, sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Disciplinary Committee. The report constitutes the material to be considered by the Council. The Council will take into regard the allegations against the member, his case in defence, the recorded evidence and the conclusions expressed by the Disciplinary Committee. Although the member has participated in the inquiry, he has had no opportunity to demonstrate the fallibility of the conclusions of the Disciplinary Committee. It is material which falls within the domain of consideration by the Council. It should also be open to the member, we think, to point out to the Council any error in the procedure adopted by the Disciplinary Committee which could have resulted in vitiating the inquiry. Section 21(8) arms the Council with power to record oral and documentary evidence, and it is precisely to take account of that eventuality and to repair the error that this power seems to have been conferred. It cannot, therefore, be denied that even though the member has participated in the inquiry before the Disciplinary Committee, there is a range of consideration by the Council on which he has not been heard. He is clearly entitled to an opportunity of hearing before the Council finds him g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "14....A combined reading of relevant provisions in Section 21 and Regulation 16 does indicate that the recording of a finding of guilt or nonguilt by the Council is mandatory to take further action or to dismiss the complaint or for further process. The Council is required to consider independently the explanation submitted by the member and the evidence adduced in the enquiry before the Disciplinary Committee and the report of the Disciplinary Committee. It provides an inbuilt mechanism under which the Council itself is required to examine the case of professional or other misconduct of a member of the Institute or associate member, taking the aid of the report submitted by the Disciplinary Committee, the evidence adduced before the Committee and the explanation offered by the delinquent member. Entire material constitutes the record of the proceeding before the Council to reach a finding whether or not the delinquent member committed professional or other misconduct. Otherwise, the primacy accorded to the report of the Disciplinary Committee attains finality, denuding the Council of the power of discipline over the members of the Institute; that would render deleteri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more necessary because it gives satisfaction to the party against whom a decision is taken. It is a wellknown principle that justice should not only be done but should also be seen to be done. An unreasoned decision may be just, but it may not appear to be so to the person affected. A reasoned decision, on the other hand, will have the appearance of fairness and justice. 23. In M/s. Woolcombers of India Ltd. v. Woolcombers Workers Union and Ors. (1974) 3 SCC 318, while dealing with an award of an Industrial Tribunal, this Court found that the award stated only the conclusions and did not providing the supporting reasons. The matter was remitted back to the Tribunal to record fresh findings and it was observed that providing reasons in support of the conclusion is essential. The reasoning has been enumerated below: "5. ...The giving of reasons in support of their conclusions by judicial and quasijudicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious unfairness or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimise the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of showing that the citizen is receiving justice, but also a valid discipline for the Tribunal itself. Therefore, statement of reasons is one of the essentials of justice." 25. As noticed above, where the Council has found any member of the Institute to be guilty of misconduct, it is required under the Act to forward the matter to the High Court with its recommendations and the High Court has to pass final order either dismissing the complaint or penalizing the member of the Institute. The order of the Council, imposing penalty upon the member, is also appealable by the members aggrieved before the High Court. In the circumstances, it is all the more necessary that the recommendation/order of the Council should contain reasons for the conclusion. 26. We are of the view that the High Court has equally erred in accepting the recommendations of the Council without applying its own logic to this aspect of the matter. We are also of the view that the Council has to reconsider the matter afresh after granting the appellant an opportunity of being heard. Having regard to the above, we do not propose to consider the other contentions of the parties. 27. Resultantly, the recommendatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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