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2010 Supreme(Del) 777
IN THE HIGH COURT OF DELHI
A.K. Sikri and Suresh Kait, JJ.
Appellants: Council of Institute of Chartered Accountants of India
Vs.
Respondent: Y.K. Gupta, F.C.A.
Chat. A. Ref. 4/2005 and R.S.A. No. 180/2004
Decided On: 29.11.2010
For Appellant/Petitioner/Plaintiff: Brijender Chahar, Sr. Adv. and Rakesh Aggarwal, Pulkit Aggarwal, Advs. in Chat. A. Ref. 4/2005, Ashok Bhalla, Adv. in R.S.A. No. 180/2004
For Respondents/Defendant:Ashok Bhalla, Adv. in Chat. A. Ref. 4/2005, Brijender Chahar, Sr. Adv. and Rakesh Aggarwal, Pulkit Aggarwal, Advocates for R-1-3 in R.S.A. No. 180/2004
The case established the legal principle that while upholding findings of professional misconduct, the court may consider factors such as prolonged litigation and the age of the accused in determining the appropriate punishment.
Headnote:
Chartered Accountants Act - Professional Misconduct - Section 21, Section 22
Fact of the Case:
The case involved allegations against a Chartered Accountant for issuing a bogus certificate leading to cheating the government. The Council found the Respondent guilty of professional misconduct and recommended removal from the Register of Members for six months.
Finding of the Court:
The court found the Respondent guilty of professional misconduct and dismissed the appeal, ultimately deciding not to confirm the six months' punishment due to the prolonged litigation and the age of the Respondent.
Issues: The key issues included the genuineness of the firm, examination of export figures, and the correctness of the certificates issued by the Respondent.
Ratio Decidendi: The court upheld the findings of the Council regarding professional misconduct and the guilt of the Respondent, but decided not to confirm the recommended punishment due to the prolonged litigation and the age of the Respondent.
Final Decision: The reference was dismissed with no order as to costs, and the appeal filed by the Respondent became infructuous and was disposed of accordingly.
Suresh Kait, J.
1. This reference is made under Section 21(5) of the Chartered Accountants Act, 1949 (hereinafter to be referred as Act) in pursuance of report dated 03.02.2002 of Disciplinary Committee of the Institute of Chartered Accountants. The Council of the Institute vide its decision dated 05.02.2004, under Section 21 of the Act, has recommended to this Court that the Respondent be removed from the Register of Members for a period of six months by confirming the punishment proposed by the Council in respect of Sh.Y.K. Gupta, CA, New Delhi (hereinafter referred to as Respondent). Simultaneously, the Respondent has also challenged the said decision of the Council by filing the suit for declaration, mandatory injunction and perpetual injunction which was dismissed by the learned Civil Judge vide order dated 12.08.2000. The same was also dismissed as infructuous vide order dated 01.05.2004 when it went in for revision. By challenging the same, the Respondent has preferred RSA No. 180/2004 which is tagged with the Reference.
2. The Central Bureau of Investigation, Special Crime Branch, New Delhi, through Sh.J.C. Dabas, the then Superintendent of Police (hereinafter to be referred as the complainant) made the following allegations against Sh.Y.K. Gupta:
The Respondent issued a bogus certificate dated 15th February, 1984 certifying the value of the exports made by a fictitious firm, M/s Impex Services, Amritsar on the basis of which advance import licence dated 25th February, 1984 for Rs. 26,08,522/- was issued by the Chief Controller of Imports & Exports, Amritsar. Consequently, the Government of India was cheated to the tune of Rs. 1,99,15,818/- against the import of polyester filament yarn.
3. The Respondent was duly served with the copy of the complaint which was sent by the Council vide its letter dated 26.07.1989. In response thereto, the Respondent vide letter dated 01.08.1989 requested for some documents to file his written statement. However, the Council vide letter dated 15.11.1989 again advised him to file his written statement and also informed him that the Institute was not empowered, under the Chartered Accountants Regulations, 1988 to call for further documents at that point of time. The Respondent again requested the Council to furnish documents vide his letter dated 17.11.1989 to which the Council again advised him to file the written statement. The Respondent vide letter dated 21.03.1990 expressed his inability to submit his written statement in the absence of relevant documents. The request pertaining to stay of proceedings was turned down by the Council vide its letter dated 17.05.1990 informing that the disciplinary proceedings against the Respondent could not be stayed and the matter would be processed on the basis of his first letter dated 01.08.1989 treating the same as his written statement. The Respondent submitted his comments on 07.07.1990 to the rejoinder of the complainant which was submitted on 13.06.1990. In accordance with the provisions contained in Regulation 12(11) of the Chartered Accountants Regulations, 1988 and taking into consideration the complaint, the written statement, the rejoinder and the comments in its 149th meeting held in June, 1991 the Council was prima facie of the opinion that the Respondent was guilty of professional and/or other misconduct and accordingly referred the case to the Disciplinary Committee constituted under the said Act for enquiry.
4. A bare perusal of the complaint reveals that Sh.Y.K. Gupta, Chartered Accountant had issued a letter dated 15.02.1984 certifying that M/s Impex Services, 3 Rani Ka Bagh, Shopping Complex, Amritsar exported readymade Hosiery Products for value of ` 22.56 lacs during 1980-81, for ` 35.71 during 1981-82 and for ` 21.85 lacs during 1982-83. However, during the course of investigation it transpired that there was no firm at the aforementioned address. It was further revealed that the aforesaid firm was fictitious and one room wa
