By the Court.—This is a reference under Section 21 (5) of the Chartered Accountants Act, 1949 in respect of a Chartered Accountant Satish Kumar Gupta of Ghaziabad who has been held guilty of “other mis-conduct” falling under Section 22 read with Section 21 of the Act by the disciplinary Committee of the Council of the Institute of Chartered Accountants of India by treating the letter of the Securities Exchange Board of India (SEBI) dated 1st August 2017 as information that the aforesaid Chartered Accountant has committed “other misconduct”.

2. As many as four charges were framed against him. The said charges inter alia were as follows :

(i) The Chartered Accountant described himself as having over all control of the management of Brahaspati Finance Limited (in short BFL) in its prospectus even though he had resigned as its Director prior to opening of the public issue;

(ii) He has lent his name to the prospectus issued in connection with public issue of BFL thereby misleading investors and inducing them to subscribe to its shares;

(iii) He had made a mis-statement in prospectus and had mislead SEBI by providing a forged Chartered Accountant Certificate; and

(iv) If any of the aforesaid charges is proved, he would be guilty of other misconduct under Section 22 read with Section 21 of the Act.

3. All papers relating to the aforesaid information, the reply submitted by the Chartered Accountant with letter framing charges and the written statement as filed by the Chartered Accountant were placed before the Council in accordance with Regulation 12 (11) of the Chartered Accountant Regulations, 1988 in its meeting held in August 2008 at New Delhi. The Council on being prima facie satisfied that he is guilty of “professional/other mis-conduct” opined for holding an inquiry in the matter by the disciplinary Committee.

4. The disciplinary Committee conducted the inquiry. The Chartered Accountant participated in the same alongwith his lawyer and on one of dates ie. 12.11.2011 pleaded “not guilty” of any of the above charges. He defended himself by alleging that he had not mislead anyone and that though he had resigned as Director of BFL before opening of the public issue but the same was accepted w.e.f. 9.9.1997. He had entrusted the management and control of the BFL to other persons before opening of the issue. No public money was received and as such no investor was induced and deceived. He had not supplied any forged certificate to the SEBI.

5. The disciplinary Committee on consideration of the entire material on record vis-a-vis the defence taken by the aforesaid Chartered Accountant on 10.2.2012 concluded that evidence is not sufficient to show that the aforesaid Chartered Accountant had provided a forged Chartered Accountant Certificate to the SEBI. He was however held guilty of “other misconduct” as according to his own statement he had resigned prior to the opening of the public issue of BFL but had signed the prospectus despite his alleged resignation. He had not protested against his name appearing as Director in the said prospectus.

6. The Council considered the report of the disciplinary Committee in its meeting held on 1st June 2013 and agreeing with the report recommended to the High Court that the name of Satish Kumar Gupta, Chartered Accountant be removed from the register of members for a period of three months.

7. This is how the reference has been placed before this Court.

8. Heard Sri Vinod Swarup, Senior Counsel appearing for the Institute of Chartered Accountants of India and Sri S.Khan for the Chartered Accountant Satish Kumar Gupta. The documents enclosed with the reference have also been perused.

9. The primary argument advanced from the side of the Chartered Accountant is that he was the Director of the BFL. He had submitted his resignation prior to the issuance of public issue but he continued to be the Director as his resignation was accepted on or w.e.f. 9.9.1997 ie. after the close to the issue. Acco