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TMI Blog2024 (6) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... kartan Das Ors. [ 2023 (8) TMI 1425 - SUPREME COURT] to the facts of the present case, the learned Counsel for the Petitioner has not been able to point out any specific Regulation or accounting standards which Respondent No. 1 has violated. Whether the omission to mention that the net worth certificate was based on a provisional balance sheet constitutes professional misconduct? - HELD THAT:- The Chartered Accountant should indicate in his report or certificate on the basis of duly audited general purpose financial statements and he should take the precaution of clearly stating in his report or certificate the figures from the audited general purpose financial statements have been used and relied upon and a statement showing reconciliation between the figures in the general purpose financial statements and the figures appearing in his report or certificate - The Appellate Authority has come to an opinion that no guidelines have been violated. The Appellate Authority is of the opinion that the guidance note will not have a statutory aberration in following the guideline note is only a technical omission and will definitely not amount to misconduct. The Appellate Authority has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exchange Limited', is the pan India electronic commodity spot exchange under the oversight of the Forward Market Commission (FMC), Ministry of Finance. It is stated that Respondent No. 2 is engaged in organizing the trade of commodity spot markets and facilitating purchase and sale transactions in commodities through its electronic trading platform. 5. It is stated that Respondent No. 2/Complainant helps the farmers to sell their crop produce through an electronic trading platform while the processors/ exporters/ manufacturers spread across the county are able to buy the same resulting into higher price realization to the farmers. One of the products of Respondent No. 2 is a short and long duration contract, the facility enabling bulk buyers and sellers to trade in commodities. It is stated that a few entities in connivance with some of the Exchange senior officials compromised with the risk management system of the Exchange and defaulted in their obligation. They sold goods that were supposed to be in their warehouse and received the money in lieu of sales. 6. After the exchange operations were closed on 31.07.2013, it was found by an audit agency appointed by the Board of NS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he net worth certificate was given by Respondent No. 2 on the basis of a provisional balance sheet as on 30.09.2012 and not on the basis of the balance sheet given at the end of the financial year which was in March, 2013. The Appellate Authority stated that mere omission to mention that the net worth certificate is issued on the basis of provisional balance sheet does not amount to professional misconduct and such omission is nothing but only technical in nature. 13. The appeal was therefore allowed and the orders impugned therein were set aside and the punishment imposed on Respondent No. 1 has been set aside. It is this order which has been challenged by the ICAI in the present writ petition. 14. At the outset it is pertinent to mention that this Court while exercising its jurisdiction under Article 226 of the Constitution of India does not sit as an Appellate Authority. A writ court exercising its jurisdiction under Article 226 of the Constitution of India does not substitute its own conclusion to the one arrived at by any authority unless the decision is so perverse that no authority can come to such a conclusion or that the order is completely in contravention of any provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would render the High Court a normal court of appeal which it is not. 53. The essential features of a writ of certiorari, including a brief history, have been very exhaustively explained by B.K. Mukherjea, J. in T.C. Basappa v. T. Nagappa, AIR 1954 SC 440 . The Court held that a writ in the nature of certiorari could be issued in all appropriate cases and in appropriate manner so long as the broad and fundamental principles were kept in mind. Those principles were delineated as follows: 7. In granting a writ of certiorari , the superior court does not exercise the powers of an appellate tribunal. It does not review or reweigh the evidence upon which the determination of the inferior tribunal purports to be based. It demolishes the order which it considers to be without jurisdiction or palpably erroneous, but does not substitute its own views for those of the inferior tribunal .. 8. The supervision of the superior court exercised through writs of certiorari goes on two points, as has been expressed by Lord Summer in King v. Nat Bell Liquors Limited [[1922] 2 A.C. 128, 156]. One is the area of inferior jurisdiction and the qualifications and conditions of its exercise; the other is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... improperly, as for instance, it decides a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding, the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er para 5 (2) (j) of the afore-stated Guidance note, where the statement on which CA is required to give his report or certificate, includes some information which has not been audited, CA should clearly dictate in his report or certificate the particulars of such information. Further, as per para 6.4 of the Guidance note, if where the reporting auditor prepares his report or certificate on the basis of duly audited general purpose financial statements he may take the following precautions. (i) He may clearly state in his report or certificate that the figures from the audited general purpose financial statements have been used and relied upon. (ii) He may include in his report or certificate a statement showing the reconciliation between the figures in the general purpose financial statements and the figures appearing in his report or certificate. It is viewed that in both the above conditions as to whether the financial statements was audited or unaudited, the Respondent was required to mention the fact in his certificate but he appears to have failed to do so Further, it is noted that net worth as certified by the Respondent as on 30ln September, 2012 consist of paid up capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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