Disciplinary proceedings against a Chartered Accountant must adhere to principles of natural justice and be based on clear evidence; arbitrary conclusions without cogent reasoning are invalid.

ORDER :

1. Heard Sri A.Venkatesh, learned designated senior counsel representing Sri N.Naveen Kumar, learned counsel appearing on behalf of the petitioner on record, Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, appearing on behalf of the Respondent No. 1 and Sri M.S.Prasad, learned designated senior counsel representing Sri C.V.Rajeeva Reddy, learned counsel appearing on behalf of respondent Nos. 2 to 4 on record.

2. The petitioner approached the Court seeking prayer as under:

“.....to issue a writ, direction or order or direction more particularly in the nature of Writ of mandamus:

(I) declaring the action of the Respondent No. 3 in issuing proceedings dt.23.12.2022 “prime facie opinion” in File No. PPR/26/2014/DD/25/INF/2014 without any reasons as arbitrary, violative of principles of natural justice and violative of the provisions of the Chartered Accountants Act, 1949, Chartered Accountants [Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases] Rule, 2007 and apart from being violative of Article 14 and 19(1)(g) of the Constitution of India and consequently set aside the same,

(II) declaring the action of the Respondent No. 4 in concurring with the prime facie opinion dated 23.12.2022 of Respondent No. 3 and issuing further proceedings vide Ref No. PPR/26/2014/DD/25/INF/2014/DC/1743/2023 including issuance of notice of hearing dated 23.10.2023 as arbitrary, violative of principles of fairness, natural justice and violative of the provisions of the Chartered Accountants Act, 1949, Chartered Accountants [Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases] Rule, 2007 and as being violative of Article 14 and 19(1)(g) of the Constitution of India and consequently set aside the same.

(III) pass such other Order or Orders......”

PERUSED THE RECORD:

3. This Court vide its order dated 03.11.2023 passed interim orders in favour of the petitioner and the same is extracted hereunder:

“Heard Mr. A.Venkatesh, the learned Senior Counsel representing Mr.N.Naveen Kumar, the learned counsel on record appearing for the petitioner and Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, appearing on behalf of the 1st respondent.

Notice before Admission.

The learned counsel for the petitioner is permitted to take out personal Notice on respondents Nos. 2 to 4 through registered post and acknowledgment due and file proof of service into the registry.

2. The prayer as sought for by the petitioner in the present writ petition reads as under:

“to issue a Writ, direction or order or direction more particularly one in the nature of Writ of Mandamus:

(I) Declaring the action of the Respondent No. 3 in issuing proceedings Dated 23.12.2022 “Prima Facie Opinion” in File No. PPR/26/2014/DD/25/INF/ 2014, without any reasons as arbitrary, violative of principles of natural justice and violative of the provisions of the Chartered Accountants Act, 1949, Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rule, 2007 and apart from being violative Article 14 and 19(1)(g) of the Constitution of India and consequently set-aside the same,

(II) Declaring the action of the Respondent No. 4 in concurring with the prima-facie opinion dated 23.12.2022 of respondent No. 3 and issuing further proceedings vide Ref. No. PPR/26/2014/DD/25/INF/2014/ DC/1743/2023 including issuance of notice of hearing dated 23.10.2023 as arbitrary, violative of principles of fairness, natural justice and violative of the provisions of the Chartered Accountant Act, 1949 Chartered Accountants (Procedure of Investigations of Professional and other Misconduct and Conduct of Cases) Rule, 2007 and as being violative of Article 14 and 19(1)(g) of the Constitution of India and consequently set aside the same.

(III) Pass such other order or orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.

3. The learned Senior