ICAI's Disciplinary Committee Dismisses Complaint u/s 21B of CA Act Due to Non-appearance of Complainants' Directors: Delhi HC sets aside Committee's Order [Read Order]
ICAI’s Disciplinary Committee – Complaint – CA Act – Non-appearance – Complainants-Directors-Delhi HC – Committee’s Order-TAXSCAN
ICAI’s Disciplinary Committee – Complaint – CA Act – Non-appearance – Complainants-Directors-Delhi HC – Committee’s Order-TAXSCAN
A Single bench of the Delhi High Court, while disposing the writ petition, has overturned the dismissal order issued by the Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI). The committee had dismissed a complaint lodged by a financial services company under Section 21B of the Chartered Accountants Act, 1949, citing the non-appearance of the complainant's directors.
The present writ petition has been submitted to contest the Order issued on 10.02.2020 by the Disciplinary Committee of the Institute of Chartered Accountants of India. This committee was formed in accordance with the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, which are established under Section 21B of the Chartered Accountants Act, 1949, to address complaints against Chartered Accountants.
Vide the impugned order, the complaint filed by the Petitioner has been dismissed by the Respondent/committee primarily on account of nonappearance of the Directors of the complainant/company for recording their statement.
The Counsel for the Petitioner stated that in accordance with the Rules, 2007, the Director of a complainant/company has to present the case before the Committee for it to form a prima facie opinion along with all the relevant evidence, whereafter, the Respondent/Committee provides an opportunity to the Respondent in the complaint to present his/her case by way of written statement, along with supporting evidence.
Drawing attention to the Rules 11, 12 and 18 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, (hereinafter referred to as Rules, 2007), the petitioner company stated that the procedure for dismissing a complaint on account of non-appearance of the witness/Directors of the complainant company as in the present case, is not provided for under the Rules, 2007.
On the contrary, the Respondent/ICAI's Counsel argued that the Committee had concerns about the legitimacy of the authorization provided by the complainant company. Consequently, they deemed it necessary to summon the company's Directors to verify the authorization and to address the complaint.
The bench of Justice Subramonium Prasad observed that “To cut the matter short and with the consent of both sides, this Court deems it expedient to set aside the impugned order and direct the authorized representative of the company along with the Directors to appear before the Disciplinary Committee as and when a notice is received for the appearance by them. On receipt of the said notice, the authorized representative and the Directors of the company shall appear on the fixed date of hearing, as per the notice and the Respondent/Committee shall proceed further in the investigation as per the Rules, 2007.”
Further, instructed the authorized representative of the company to bring all relevant documents in their possession to the Committee, including those already submitted before the committee for further proceedings. The court made clear that the court has not made any observation on the merits of the case.
To Read the full text of the Order CLICK HERE
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