1997 Supreme(SC) 947

1997(7) Supreme 647
SUPREME COURT OF INDIA
(From Delhi High Court)
K. Ramaswamy, S. Saghir Ahmad and G.B. Pattanaik, JJ.
Institute of Chartered Accountants of India -Appellant
versus
M/s. Price Waterhouse & Anr. -Respondents
Civil Appeal No. 4600 of 1997
(Arising out of SLP (C) No. 25231 of 1996)
Decided on 11-7-1997
Counsel for the Parties :
For the Appellant : C.S. Vaidyanathan, Sr. Advocate, K.K. Jain, Ajay K. Jain, Pramod Dayal and Shashi Bhushan, Advocates.
For the Respondents : P.P. Rao, Sr. Advocate and N. Ganpathy, Advocate.

IMPORTANT POINT
Under the provisions of the Chartered Accountants Act, 1949, in cases of inquiries relating to misconduct of the members of the Institute, where finding of not guilty is reported by the Disciplinary Committee, the Council has the power to call for further report from the Disciplinary Committee on non guilt of the professional or other misconduct.

Headnote:(i) Chartered Accountants Act, 1949-Section 21 and Regulation 16 framed thereunder-Clauses (6) and (7) of Part I of First Schedule-Interpretation of-Procedure in inquiries relating to misconduct of members of Institute-Where finding of not guilty reported by Disciplinary Committee-Whether the Council has power to call for further report from Disciplinary Committee?-(Yes, as per Majority Opinion)-Council has power to call further report from Disciplinary Committee-If Disciplinary Committee again holds delinquent Member not guilty -No option left to Council except to accept the finding of not guilty -(No, per Minority opinion)-Where finding of guilty reported-Procedure to be followed.

       Per Majority (K. Ramaswamy and G.B. Pattanaik, JJ.

       Held : A combined reading of relevant provisions in Section 21 and Regulation 16 does indicate that the recording of a finding of guilt or non-guilt by the Council is mandatory to take further action or to dismiss the complaint or for further process. The Council is required to consider independently the explanation submitted by the member and the evidence adduced in the enquiry before the Disciplinary Committee and the report of the Disciplinary Committee. It provides an in-built mechanism under which the Council itself is required to examine the case of professional or other misconduct of a member of the Institute or associate member, taking the aid of the report submitted by the Disciplinary Committee, the evidence adduced before the Committee and the explanation offered by the delinquent member. Entire material constitutes the record of the proceedings before the Council to reach a finding whether or not the delinquent member committed professional or other misconduct. Otherwise, the primacy accorded to the report of the Disciplinary Committee attains finality, denuding the Council of the power of discipline over the members of the Institute; that would render deleterious effect on the maintenance of discipline among the members or associate members of the Institute. (Para 13)

       Further held that the view expressed by the High Court is clearly incorrect and it would defeat the object of the Act of maintaining professional standards of the professional conduct or other conduct consistent with the dignity of the profession of the accountants. We, therefore, hold that the Council has the power to call for further report from the Disciplinary Committee on non-guilt of the professional or other misconduct of the respondent. In this backdrop, the proviso to sub-regulation (4) of Regulation 16 becomes relevant. In case, on the second occasion, the report of the Disciplinary Committee still holds the delinquent member not guilty, there is no option left to the Council except, by operation of proviso to sub-regulation (4) of Regulation 16 read with Section 21(2), as the Council is enjoined, to record finding of no guilt since the power of calling for further report would stand exhausted. Any other view, in our considered opinion, would defeat the object of the Act. (Para 13)

       The ultimate control over conduct of the members is by the Council. The Disciplinary Committee is a fact-finding body which is a body subordinate to the Council as a fact-finding authority. If its finding of guilt or non-guilt receives finality, it denudes the Council of the power to direct further appropriate enquiry into the professional or other misconduct not adequately dealt with by the Disciplinary Committee. Similarly, the Council would be disabled to exercise effective vigil and supervision over the professional or other misconduct of the members of the Institute. The Parliament has invested that power with the Council and the construction suggested allows the tail to wag while the controlling body, the council lamentably look at it. (Para 13)

       Per Minority (S. Saghir Ahmad, J.)

       Held : If Sub-section (2) of Section 21 and the Proviso extracted above are read together, it will come out that if the Disciplinary Committee submits report of "not guilty", the Council has to accept this report and close the proceedings as the mandate of law is that the Council shall not record its findings contrary to the report of the Disciplinary Committee. This provision does not affect the primacy of the Council. It does not have the effect of making the Council a body subordinate to the Disciplinary Committee which remains one of the Standing Committees of the Council. Now if the President and Vice-President of the Council, who are also the President and Vice-President of the Disciplinary Committee, have together with other Members of the Committee, decided on the basis of the material on record, that the Member against whom disciplinary proceedings were initiated either on the information received by the Council or on a specific complaint made to it, that the Member is "not guilty", the same President and Vice-President sitting in the Council are required not to adopt a contrary finding but to adopt the findings of the Disciplinary Committee and close the proceedings. (Para 32)

       Under the present Act and the Regulations made thereunder, the Disciplinary Committee is a Committee headed by the President of the Council who is the Chief Executive Authority of the Council under Section 12(2) and sits on the Disciplinary Committee along with the Vice-President. The highest authority of the Council, therefore, heads the Disciplinary Committee as also other Standing Committees of the Council. If, therefore, the Regulation says that where the finding of the Committee is that the Member is "not guilty", the Council shall not pass any order contrary to that finding, it is quite understandable as the Disciplinary Committee being headed by the Chief Executive Authority of the Council is not expected to overrule itself. (Para 33)

       A further enquiry can be ordered only where the Disciplinary Committee has initially found the Member to be "guilty" and has recorded a finding to that effect. An order for further enquiry can be passed only on a consideration of the report of Disciplinary Committee and the representation of the Member made against such report. What is implicit in this provision is that a Member to whom a copy of the finding is furnished may have the occasion to challenge or to accept the findings. (Para 38)

       Reading into the provisions that the Council has power to call for a further report even in those cases where the finding given by the Committee is that the delinquent Member is "not guilty", would amount to altering the terms of the Statute and introducing a provision which did not exist, unless it is a case of casus omissus, which, admittedly, it is not. (Para 42)

       (ii) INTERPRETATION OF STATUTES-Harmonious construction-All provisions to be read harmoniously to give effect to all provisions as a consistent whole rendering no part of the provisions as surplusage.

       K. Ramaswamy & G.B. Pattanaik, JJ.

       Held : It is settled rule of interpretation that all the provisions would be read together harmoniously so as to give effect to all the provisions as a consistent whole rendering no part of the provision as surplusage. Otherwise, by process of interpretation, a part of the provision or a clause would be rendered otios. (Para 13)

       S. Saghir Ahmad, J.

       Held : It is said that a Statute is an edict of Legislature. The elementary principle of interpreting or construing a Statute is to gather the mens or sententia legis of the Legislature. Interpretation postulates the search for the true meaning of the words used in the Statute as a medium of expression to communicate a particular thought. The task is not easy as the "language" is often misunderstood even in ordinary conversation or correspondence. The tragedy is that although in the matter of correspondence or conversation the person who has spoken the words or used the language can be approached for clarification, the Legislature cannot be approached as the Legislature, after enacting a law or Act, becomes functus officio so far as that particular Act is concerned and it cannot itself interpret it. No doubt, the Legislature retains the power to amend or repeal the law so made and can also declare its meaning, but that can be done only by making another law or Statute after undertaking the whole process of law-making. Statute being an edict of the Legislature, it is necessary that it is expressed in clear and unambiguous language. (Paras 43 to 45)

       Where, however, the words were clear, there is no obscurity, there is no ambiguity and the intention of the Legislature is clearly conveyed, there is no scope for the Court to innovate or take upon itself the task of amending or altering the Statutory provisions. In that situation the Judges should not proclaim that they are playing the role of a law-maker merely for an exhibition of judicial valour. They have to remember that there is a line, though thin, which separates adjudication from legislation. That line should not be crossed. This can be vouchsafed by "an alert recognition of the necessity not to cross it and instinctive, as well as trained reluctance to do so." (Para 46)

       Where, therefore, the "language" is clear, the intention of the Legislature is to be gathered from the language used. What is to be borne in mind is as to what has been said in the Statute as also what has not been said. A construction which requires, for its support, addition or substitution of words or which results in rejection of words, has to be avoided, unless it is covered by the rule of exception, including that of necessity, which is not the case here. (Para 48)