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1952 Supreme(Nagpur) 43
HIGH COURT OF NAGPUR
Mangalmurti, Deo
W G AMBEKAR – Appellant
Versus
STATE – Respondent
Miscellaneous Civil Case No. 147 of 1951
Decided on : 04-04-1952
J M Thakar, S Venkatraman, W G Ambekar, Advocates
The High Court has the power to impose a punishment other than permanent removal from the Register for misconduct by a chartered accountant.
Headnote:
CHARTERED ACCOUNTANTS ACT, 1949 - SECTION 21 - REMOVAL OF NAME FROM REGISTER - POWER OF HIGH COURT - EXTENT - PUNISHMENT FOR MISCONDUCT.
Fact of the Case:
The respondent, a chartered accountant, was found guilty of misconduct by the Council of the Institute of Chartered Accountants for sending circular letters to several persons soliciting professional work. The Council recommended that the respondent's name be removed from the Register of the Institute, but that the removal be nominal only and that the respondent be permitted to apply for reinstatement immediately thereafter.
Finding of the Court:
The High Court upheld the finding of misconduct by the Council.
Issues: Whether the High Court has the power to impose a punishment other than permanent removal from the Register for misconduct by a chartered accountant.
Ratio Decidendi: The High Court has the power to impose a punishment other than permanent removal from the Register for misconduct by a chartered accountant. Section 21(3) of the Chartered Accountants Act, 1949 empowers the High Court to pass "such final orders on the case as it thinks fit". This power is not limited by Section 20(2), which requires the Council to remove the name of a member from the Register if the High Court finds the member guilty of misconduct. Section 20(2) merely prescribes the duty of the Council to carry out the order of the High Court.
Final Decision: The High Court ordered that the respondent's name be removed from the Register with liberty to him to make an application for restoration of his name to the Register in accordance with the Regulations framed under the Act.
1. This is a reference under Section 21 of the Chartered Accountants Act, 1949. The Council of the Institute of Chartered Accountants has found the respondent guilty of conduct which renders him unfit to be a member of the Institute as he sent circular letters to several persons soliciting professional work which amounts to misconduct as defined in Section 22 of the Act read with clause (e) of the Schedule. That clause runs thus:
Solicits clients or professional work either directly or indirectly, by circular, advertisement, personal communication or interview or by any other means.
The Council has, however, observed that the misconduct was more due to ignorance of the rules and lack of professional experience than to any wrong motive or dishonesty and while recommending that the name of the respondent be removed from the Register of the Institute it has added that in view of the extenuating circumstances the removal may be nominal only and the respondent may be permitted to apply for reinstatement immediately thereafter.
2. The respondent admitted before the disciplinary Committee of the Council that he had sent the circular letters and that his conduct was wrong and objectionable. His learned counsel did not dispute the finding of misconduct. We have gone through the whole record and uphold it.
3. As regards the question of punishment, the Secretary of the Institute who appeared before us on its behalf, submitted that we have no alternative but to order removal of the name of the respondent from the register if we affirm the finding of the Council. Reliance was placed on Section 8 sub-section (vi) and Section 20, sub-section (2). The two other provisions which have to be considered in this connection are Section 21, sub-section (3) and Regulation 13 of the Chartered Accountants Regulation 1949, made under Section 30 of the Act.
4. The learned counsel for the respondent submits that the jurisdiction of the High Court under this Act is akin to the jurisdiction over Advocates under section 10 of the Bar Councils Act, 1926. That section empowers a High Court to reprimand, suspend, or remove from practice any Advocate of the High Court whom it finds guilty of professional or other misconduct. The Bar Councils Act provides for enquiry by the Tribunal, and lays down the procedure and powers of the Tribunal in such enquiries. Somewhat similar provisions have been made in the Chartered Accountants Act. In the former case, the proceedings are initiated by the High Court, while in the latter they are initiated by the Council. Prior to the passing of this Act, the disciplinary jurisdiction over Registered Accountants, who are now classed as Chartered Accountants, was exercised by the Central Government under Auditors' Certificates Rules, 1932. Under Rule 14 of these Rules the Central Government was empowered permanently or temporarily to remove from the Register of Accountants name of any person whom the Central Government had declared not to be a fit and proper person to remain enrolled on the Register by reason of any act, or negligence, misconduct or dishonesty committed in his professional capacity or of any breach of professional propriety. A registered Accountant was thus not liable to be removed permanently from the Register in every case in which he was declared not to be a fit and proper person to remain enrolled on the Register. The Secretary distinguishes these provisions by submitting that the Chartered Accountants Act does not provide for temporary removal of a member.
5. The material provisions of the Act are:
8 (vi).............A person shall not be entitled to have his name entered in or borne on the register if he has been found on inquiry to have been guilty of conduct which renders him unfit to be a member of the Institute.
20 (2) The Council shall remove from the Register the name of any member who has been found by the High Court to have been guilty of conduct which renders him unfit to be a member of the Institute,
