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TMI Blog2023 (10) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... e findings has been specifically assigned to the Council. After recording a finding that a member is guilty of misconduct, the Act moves forward to the final stage of penalisation. The penalty which follows is so harsh that it may result in the removal from the Register of Members for a substantial number of years. The removal of his name from the Register deprives a member of the right to a certificate of practice. The findings by the Council constitutes the foundation for the penalty imposed by the Council on him - The person who is adversely affected wants to know as to why his submissions have not been accepted. Giving of reasons ensures that a hearing is not rendered as a meaningless charade. Unless an adjudicatory body is required to give reasons and make findings of fact indicating the evidence upon which it relied, there is no way of knowing whether the concerned body genuinely applied itself to and evaluated the arguments and the evidence advanced at the hearing. Giving reasons is all the more necessary because it gives satisfaction to the party against whom a decision is taken. It is a well known principle that justice should not only be done but should also be seen to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness establishment. The Respondent has been running the aforesaid business without the permission of the Institute. 1.3 The Respondent had threatened the Complainant of physically harming her, if she were to visit his residence. Respondent was a Chartered Accountant in practice and a member of petitioner, The Institute of Chartered Accountants of India (Institute). 3. The council, after considering the complaint, defence of respondent and rejoinder of complainant, prima facie, felt that respondent was guilty of professional misconduct and/or other misconduct and referred the matter to the Disciplinary Committee constituted under the Act for enquiry. 4. The Disciplinary Committee after conducting an enquiry has opined that respondent was guilty of professional misconduct under Clause (11) of Part I of the First Schedule of the Act which provides that a chartered accountant in practice shall be deemed to be guilty of professional misconduct, if he engages in any business or occupation other than the profession of chartered accountant unless permitted by the Council so to engage . but has recommended that a lenient view be taken in the matter of Second Part falling under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry body created by an Act of Parliament, i.e., 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 performs its function through three different standing committees constituted under Section 17 of the Act and various other committees. One of the standing committees of the Institute is the Disciplinary Committee. The function of the Institute is to regulate the provisions of the Act and it is also empowered to take action against its members for any misconduct as contemplated in the Act and relevant regulations framed thereunder. Section 21 of the Act prescribes the procedure to be followed with regard to an inquiry relating to the misconduct of the members of the Institute. The Act was amended on 08.08.2006 by Act 9 of 2006. However, since the alleged misconduct relates to the year 1996, we are concerned with the unamended Section 21 which reads as under : 21. Procedure in inquiries relating to misconduct of members of Institute: (1) Where on receipt of information by, or of a complaint made to it, the Council if prima facie of opinion that an member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings be filed, or dismiss the complaint, as the case may be; (b) reprimand the member; (c) remove him from membership of the Institute either permanently or for such period as the High Court thinks fit; (d) refer the case to the Council for further inquiry and report. (7) xxx xxx xxx (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, 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. 9. Regulation 13 of the Chartered Accountants Regulations, 1964 ( Regulation ) provides for the procedure of an inquiry before the Disciplinary Committee. Regulations 14 and 15 which are relevant for the purpose of this case are as under: 14. Report of the Disciplinary Committee (1) The Disciplinary committee shall submit its report to the Council. (2) The Council shall consider the report of the Disciplinary Committe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal stage of penalisation. The penalty which follows is so harsh that it may result in the removal from the Register of Members for a substantial number of years. The removal of his name from the Register deprives a member of the right to a certificate of practice. The findings by the Council constitutes the foundation for the penalty imposed by the Council on him. As held in D.K. Agrawal (supra) the power exercised by the Council under Section 21 is quasi-judicial in nature. Perusal of the recommendations of the Council shows that there is no discussion. It only reproduces the report of the Disciplinary Committee and straight away holds respondent guilty and states the penalty to be imposed. The Council has failed to give its own independent findings. The recommendations made by the Council is not supported by independent reasons. The recommendations, in our opinion, have been made mechanically by the Council. Recording of reasons is a principle of natural justice and every judicial/quasi-judicial order must be supported by reasons to be recorded in writing. It ensures transparency and fairness in the decision making process. The person who is adversely affected wants to know as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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