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TMI Blog2014 (11) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... fession on account of their personal experience. Moreover, the said bodies have been created to maintain a high standard of conduct and discipline amongst the members of the petitioner institute. Thus, unless gross violation or disregard of the provisions of the Act or the Regulations made thereunder or of the principles of natural justice and fairness is to be found, this Court would be slow to interfere with the finding of such professional bodies. At the time of issuing notice of both the petitions had brought the said fact to the notice of the Advocate for the petitioner Institute. It is also found that other references are also being filed after such long delay and without any explanation given therefor. Though no limitation appears to have been prescribed for filing such reference (though a perusal of The Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 and the Chartered Accountants Regulations, 1988 brought into force since then contain some tentative time limits) but the petitioner Institute which is a professional body also empowered to discipline its members ought not to so delay dealing with the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttee of the petitioner Institute insofar as the complaint subject matter of Chat.A.Ref. No.4/2014 is concerned. However, the respondent No.1 in the complaint subject matter of Chat.A.Ref. No.6/2014, though replied to the initial show cause notice but did not participate in the disciplinary proceedings or submit any representation on the report of the Disciplinary Committee, despite opportunity. On our enquiry it is informed that the respondent No.1 is alive. In these circumstances, we do not deem it necessary to await the respondent No.1 any further and have heard the counsel for the petitioner Institute. 3. The complaint (dated 17th September, 1998) subject matter of Chat.A.Ref. No.4/2014 was made to the petitioner Institute by the Delhi Stock Exchange (DSE). The same related to the affairs of M/s. Karan Finance Limited. A letter dated 9th October, 1998 in this regard was also received from the Securities Exchange Board of India (SEBI). The respondent No.1 as aforesaid failed to respond. The complaint (dated 22nd March, 2001) subject matter of Chat.A.Ref. No.6/2014 was made to the petitioner Institute by SEBI. The same related to fraudulent public issue of M/s. Zed Investments Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubhash Kumar Malik, Mr. Anil Sehrawat, Mr. Harpal Rathi and Mr. Rajender Singh were desirous of starting a lucky draw / chit company and contacted the respondent No. 1 who advised them to incorporate a private limited company; (ii) that the requisite memorandum was stamped at Chandigarh and the documents pertaining to incorporation were handed over to the respondent No. 1 in March, 1990; (iii) that however the plans of the aforesaid persons to start the company ran into rough weather and they informed the respondent No.1 that he should not act further in getting the company incorporated; (iv) that however on 24th October, 1997 it was discovered that the respondent No.1, contrary to the instructions of the aforesaid persons and by forging their signatures, went ahead to incorporate the company in the name of M/s. Karan Finance Limited on 21st May, 1990; (v) that the respondent No.1 acted in breach of faith and contrary to his professional instructions and misused the incomplete signed papers lying with him; (vi) that the respondent no.1 also fabricated resolutions of the said company; though Mr. Harpal Rathi died on 5th February, 1993 but he was shown to have signed the papers for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (CBI) also prosecuted the respondent No.1 on the same grounds and allegations in the Court of ACMM, Karkardooma, Delhi but the respondent No.1 was acquitted pursuant to entering into the compromise with the investors and consequent lack of evidence; (g) that the undertaking given by the respondent No.1 as Lead Manager to SEBI was totally false and just to cheat the general public and to induce them to invest their money in the public issue of such a company which was fake and bogus and the Directors shown of which itself were also not in existence; (h) that the respondent No.1 had failed to prove that the information given to SEBI in the prospectus was true. The Disciplinary Committee thus concluded that the respondent No.1 is guilty of other misconduct‟ falling under Section 22 read with Section 21 of the Act. 8. The respondent No.1 despite opportunity failed to represent against the report of the either of the two Disciplinary Committees and also failed to participate in the 324th meeting of the petitioner Institute held on 10th and 11th April, 2013 in which both the reports were taken up for consideration. The petitioner Institute, on consideration of both the reports d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the said effect in the minutes of the 324th meeting of the petitioner Institute held on 10th and 11th April, 2013. Since the recommendation qua both the complaints has been made in the same meeting, it would have been appropriate for the petitioner Institute to, when at the same time dealing with the two complaints against the same member and recommending the same punishment in both i.e. of removal of the name from the Register, to at least clarify, whether the said punishment is to run concurrently or not. However, the misconduct of which the respondent No.1 has been found guilty being gross in both the complaints, we this time around, accept the statement of the Advocate for the petitioner Institute and clarify that the punishment in both the cases is not to run concurrently. 14. Before parting with the matters, we wish to highlight another aspect. Besides the delays as aforesaid at the very initial stage in inviting response of the respondent No.1 to the complaint and thereafter in forming a prima facie opinion to refer the complaint to the Disciplinary Committee, even after the petitioner Institute had accepted the reports of the Disciplinary Committee and recommended punish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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