Continuance of proceedings by ICAI against CA after settlement of matter before CLB is vicious

Continuance of proceedings by ICAI against CA after settlement of matter before CLB is vicious

 

Continuance of proceeding by ICAI after settlement of matter between complainant and respondent-chartered accountant before CLB was perverse

In the instant case the complainant filed a complaint against the contesting respondent-Chartered Accountant (‘CA’) making various allegations against him. Disciplinary Committee held CA guilty of various acts of professional or other misconduct. The Council of ICAI (‘ICAI’) held CA guilty of professional misconduct and made a reference to the Court that his name to be removed from Register of Members. The CA raised a preliminary objection that the reference was not maintainable before the Court because the complainant had settled matter with him before Company Law Board (‘CLB’).

The High Court held as under:

1) The CLB conveyed to the ICAI that in view of the settlement between it and the CA nothing survived in the complaint but the disciplinary committee and the Council still proceeded with the complaint for reasons best known to them and came to a conclusion that the charge had been proved even without any evidence being led in support of the same;

2) Report of the disciplinary committee and decision of the ICAI didn’t not state that instead of the complainant some other witnesses were examined in proof of the allegations and /or record of the case was proved during the course of the proceedings;

3) In fact, after the complainant settled the matter with the CA before CLB and then wrote to the ICAI that he didn’t not want to press his complaint against the CA, the disciplinary committee and the ICAI were not justified in continuing with the proceedings as the very basis of the proceedings, i.e., the complaint on the basis of which the proceedings had been initiated, had become non-existent;

4) It was not the case of the petitioner that the settlement reached before the CLB and request of the complainant that he didn’t want to press the complaint were not in the knowledge of the disciplinary committee and the ICAI;c

5) Neither the disciplinary committee nor the ICAI had referred to the evidence on the basis of which the charge was stated to have been proved. Finding of disciplinary committee and decision of the Council, therefore, were found to be perverse and not backed by evidence. Thus, the reference was to be rejected – ICAI V. K.K. SINDWANI (2013) 36 taxmann.com 402 (Punjab & Haryana)

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