Case Note & Summary
The Institute of Chartered Accountants of India (ICAI) filed a reference under Section 21(5) of the Chartered Accountants Act, 1949, against the respondent, Sudhir M. Desai, a chartered accountant. The case arose from a complaint dated 16 December 1996 by one Jaya Ganesan, alleging that the respondent, using his position as a chartered accountant, induced her to give him a loan of Rs.90,000/-. He promised to repay it within a year but only repaid Rs.30,000/- and failed to pay the balance. The Council of ICAI constituted a Disciplinary Committee, which after due process, found the respondent guilty of professional misconduct. The matter was then referred to the High Court under Section 21(5) of the Act. The High Court, after considering the report and the facts, upheld the finding of misconduct. The court noted that the respondent had induced the complainant to give the loan and had not repaid the amount, which clearly amounted to professional misconduct. The court directed that the respondent be reprimanded and ordered to pay the balance amount of Rs.60,000/- to the complainant within three months, failing which his name would be removed from the Register of Chartered Accountants for a period of one year.
Headnote
A) Professional Misconduct - Chartered Accountant - Loan from Client - Inducement - Section 21(5) of the Chartered Accountants Act, 1949 - The respondent, a chartered accountant, induced the complainant to give a loan of Rs.90,000/- and after repaying Rs.30,000/- failed to pay the balance. The Disciplinary Committee found him guilty of professional misconduct. The High Court upheld the finding, holding that such conduct amounts to misconduct under the Act. (Paras 1-5)
Issue of Consideration
Whether a chartered accountant inducing a client to give a loan and failing to repay it constitutes professional misconduct under the Chartered Accountants Act, 1949.
Final Decision
The High Court upheld the finding of professional misconduct against the respondent. The court reprimanded the respondent and directed him to pay the balance amount of Rs.60,000/- to the complainant within three months. In default, his name shall be removed from the Register of Chartered Accountants for a period of one year.
Law Points
- Professional misconduct
- Chartered Accountant
- loan from client
- inducement
- disciplinary proceedings
- Section 21(5) Chartered Accountants Act
- 1949
