The final decision on the action against the petitioner is appealable to the Authority under Section 22G, and the court provided interim protection for the petitioner to approach the Appellate Authority.

JUDGMENT

Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.

2. The present petition raises a challenge to the impugned order passed by the Disciplinary Committee of the Institute of Chartered Accountants of India ( hereinafter 'ICAI') dated 6th January, 2023 followed by the notice dated 10th January, 2023 issued by the Disciplinary Directorate. It also seeks to challenge the notice dated 5th May, 2014 issued by the Disciplinary Directorate, ICAI, opinion dated 17th March, 2017 formed by the Director (Discipline), ICAI as also the notice dated 5th June, 2017 issued by the Disciplinary Directorate ICAI, all of which culminated into the impugned order dated 6th January, 2023.

3. The brief background of this case is that the Petitioner-Mr. Vijaykant Jagannath Kulkarni is a Chartered Accountant and partner of the firm M/s V.J. Kulkarni & Associates ( hereinafter 'Petitioner- Firm') which was the statutory auditor of the New India Co-operative Bank Limited (hereinafter 'said Bank' ) for the financial year 2010-2011. The Reserve Bank of India (hereinafter 'RBI') carried out an inspection of the financial records of the said Bank for the year ended 31st March 2011 and the same resulted in a communication from the RBI dated 27th November, 2013 to the Petitioner- Firm stating that the Petitioner-Firm would be debarred from conducting any audit assignments of banks for a period of two years. A communication was also simultaneously addressed to the President ICAI seeking appropriate action against the Petitioner-Firm alleging serious shortcomings observed in the statutory audit of the bank.

4. The ICAI, in May 2014, informed the Petitioner-Firm about RBI's letter, and conveyed that it was to be treated as 'information' and all required documents were sought. The proceedings continued over several years. On 17th March, 2017, the Director Discipline, ICAI submitted a prima facie opinion to the Disciplinary Committee stating that the Petitioner/Petitioner-Firm was guilty of professional misconduct falling within the meaning of Clauses (6),(7) and (9) of Part-I of the Second Schedule to the Chartered Accountants Act, 1949. The Petitioner was then informed by the Disciplinary Directorate that the Disciplinary Committee concurred with the prima facie opinion given by the Director (Discipline) and the Petitioner was called upon to file its written statement/defence.

5. The Petitioner was permitted to file its defence and a hearing was also granted on 5th August, 2022. On 6th January, 2023, the impugned order was passed by the Disciplinary Committee qua the Petitioner which reads as -

"5.1 The Committee noted that Counsel for the Respondent basically argued on the basis of legal framework and accounting provisions applicable to a Multi-state Co-operative Bank. He further argued on provisions of Section 62 and 63 of the Multi-State Co- operative Societies Act, 2002, mentioning that there is no distinction between 'above the line' or 'below the line' for a Multi-State Co- operative Bank and hence there is no prohibition on inter-se transfer of balances from one type of reserve to another, directly without routing through the Profit & Loss account.

5.2 The Committee noted that the Respondent/his Counsel had mainly argued as per formats prescribed for the Balance Sheet and the Profit & Loss account, and that there is no separate provision for appropriation of the profits. The Committee noted that although the prescribed formats require to show the final balances on face of the Financial Statement, yet it does not prohibit appropriation of profits. Further, section 62 only defines net profit that can be distributed by way of bonus or dividend among the members. It does not mean that there is no distinction between 'above the line' and 'below the line' in the formats prescribed for a Multi- State Co-operative Bank.

5.3 The Committee also noted that the Respondent in his submissions given at prima-facie stage had mentioned