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TMI Blog2023 (10) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... t Respondent in the dock for the entire period. Considering the nature of accusation against Respondent, the finding of guilt by the Committee and the Council and the consequent penal recommendation of such grave ramification, it is surprising that the Institute took such a long time to complete the procedure of indictment. The attitude of the Institute appears to be completely casual and negligent - Respondent is presently 77 years of age and save and except a period of five years for which he himself had surrendered his certificate of practice, he has been professionally active and no other complaint is found to have been made against him. The Institute has offered no explanation whatsoever for the inordinate delay in initiating and concluding the disciplinary action against Respondent. The Supreme Court in its decision in the matter of State of Madhya Pradesh v Bani Singh [ 1990 (4) TMI 286 - SUPREME COURT ] has quashed the charge memo and the departmental enquiry against an officer of the SAF, Gwalior on the ground of inordinate delay of 12 years to initiate departmental proceedings with reference to an incident that took place in 1975-76 and held that since there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of the Company. Respondent fabricated bogus payment challans by putting forged stamp of Dena Bank, Vile Parle (W) Branch and gave photocopy of the same as proof of payment to the Company. It is also alleged that Respondent fabricated certificates of Sales Tax Authorities showing completion of assessment and sent photocopies of the same as proof thereof. Respondent is further alleged to have collected account payee cheques for making payment of sales tax dues which he misappropriated by depositing in his own bank account. The alleged incident has taken place during the period 1992-1994. 3. Upon receipt of the complaint, the Institute called upon Respondent to send his response and by a written statement dated 16th December 2004, Respondent defended himself firstly by denying each and every allegation against him and referring to the complaint as sweeping, reckless and containing unsubstantiated allegations. He claimed to have an unblemished record of professional integrity for as many as 20 years. Complainant rebutted the written statement by its own rejoinder reiterating the allegations. The Council of the Institute ( Council ) at its meeting held in September 2007 at N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Section 22-A provides for filing of an appeal by a member against imposition of penalty. The Act was amended on 8th August 2006 by Act 9 of 2006. However, since the alleged other misconduct relates to the period prior to the amendment, we are concerned with the unamended Sections 21 and 22, which are 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 is of the opinion that a member of the Institute has been gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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; .. 8. Regulation 13 of the Chartered Accountants Regulations, 1964 ( Regulation ) provides for the procedure of an inquiry before the 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 Committee and if, in its opinion, a further enquiry 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the cheque and complainant gave money to Respondent to deposit the same against the sales tax liability, yet Respondent gave an undertaking that in case the Company failed to discharge its sales tax liabilities, he shall personally shoulder the same. The Committee went on to observe that no professional such as Respondent will give an undertaking while at the same time denying his involvement in the act of forging the challans. The Committee further accepted complainant s affidavit which confirmed that Respondent has made several payments on behalf of the Company to the Sales Tax Department. On the basis of this evidence and the fact that Respondent failed to give an explanation regarding the circumstances and reasons compelling him to give an undertaking as aforesaid, the Committee held him guilty of other misconduct . 10. Respondent has filed his affidavit in reply and placed on record subsequent events. He states that the trial against him in the criminal complaint by judgment and order dated 5th May 2018 passed by the ACMM, he stands acquitted of all the charges. He has placed the order of acquittal on record. He has also denied the allegations made by the Institute in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed under the Act and reach a finding of guilt of Respondent. Another almost two years were spent in the process of filing the Reference and finally, about four more years were spent in removing office objections to get the Reference registered. Thus, the Council has prolonged the procedure for as many as 19 years and kept Respondent in the dock for the entire period. 13. Considering the nature of accusation against Respondent, the finding of guilt by the Committee and the Council and the consequent penal recommendation of such grave ramification, it is surprising that the Institute took such a long time to complete the procedure of indictment. The attitude of the Institute appears to be completely casual and negligent. The long drawn disciplinary proceedings themselves suggest the lack of seriousness on the part of the Institute to take the procedure against Respondent to its logical conclusion. Respondent is presently 77 years of age and save and except a period of five years for which he himself had surrendered his certificate of practice, he has been professionally active and no other complaint is found to have been made against him. The Institute has offered no explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, disciplinary proceedings should be allowed to take their course as per relevant rules but then delay defeats justice. Delay causes prejudice to the charged officer unless it can be shown that he is to blame for the delay or when there is proper explanation for the delay in conducting the disciplinary proceedings. Ultimately, the court is to balance these two diverse considerations. (emphasis supplied) 16. In the present case no explanation is offered by the Institute for the inordinate delay of as many as 19 years. Respondent has inasmuch suffered the agony of the sword of Damocles hanging over his head for so many years. In any case, we do not find that the Committee has found any substantial justification in the form of unrebutted evidence against Respondent as much as to hold him guilty to the extent that his name should be removed for a period of one year and Respondent be compelled to face an ignominy of the tag of other misconduct at this stage in his professional career and at an age of 77 years. Moreover, the criminal court after having applied the rigor of proof beyond reasonable doubt principle has also acquitted him. Though the degree of proof required ..... X X X X Extracts X X X X X X X X Extracts X X X X
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