The Gujarat High Court in a recent judgemnet dismissed the Petition filed against dropping of misconduct charges against the auditor and ruled that the Institute of Chartered Accountants of India (ICAI) Members can only avail right to appeal in disciplinary matters.
The Karnavati Cooperative Bank Limited, the writ-applicant challenged the order passed by respondent No.1 -Disciplinary Committee constituted under Section 21B of the Chartered Accountants (Amendment) Act, 1949.
The writ-applicant Bank was the complainant before the Institute of Chartered Accountants of India (ICAI). Respondent No.3 was appointed as Concurrent Auditor of the writ-applicant Bank from 2004-05.
Based on the complaint, respondent No.2 conducted an inquiry, prima facie opinion was formed looking into various documents that respondent No.3 was guilty of professional and other misconducts falling within the meaning of Clause (7) of Part-I of the Second Schedule of the Chartered Accountants Act, 1949.
Respondent No.1 passed the impugned order dated 23.12.2019 whereby Respondent No.3 was held to be not guilty of Professional and any other misconduct. It was alleged that the order was nonspeaking order as well as an order without considering the numerous documents on the record of the case.
Mr M. B. Gandhi, Senior Counsel assisted by Mr Chinmay Gandhi, the advocate appeared for the writ-applicant Bank and Ms Dharmishta Raval, the advocate appeared for respondents No.1 and 2.
It was submitted that given the callous attitude of respondentNo.3 – cashier Mr Milind Kothari siphoned/misappropriated the writ-applicant Bank to the tune of Rs.43 lakhs.
Under the complaint received by respondents No.1 and 2, the respondents carried out disciplinary proceedings by the provisions of the Chartered Accountants Act and Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 (“Rules”).
The Director (Discipline) formed an opinion that prima facie case was made out against respondent No.3 and the same was referred to the Committee i.e. respondent No.1. On considering the documents on record and the facts of the documents on record the Committee held the respondent No.3 not guilty of misconduct.
The Court comprising Justice Vaibhavi D Nanavati held that “the court had only a limited position to interfere in the decision made by the respondent authority. Under such circumstances, where the Statute itself does not provide for an appeal to the complainant who acts as an informant to the ICAI concerning the alleged incident, thereafter it is for the respondent authority to consider the said complaint by the Act and Rules.”
While dismissing the writ application, the Court refused to accept or entertain the writ application filed at the instance of the original complainant on the ground that the writ-applicant has no locus.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
