Case Note & Summary
This is a reference case filed by the Council of the Institute of Chartered Accountants of India (the Council) under Section 21(5) of the Chartered Accountants Act, 1949 (the Act) for consideration of the recommendation made by the Council for removal of the name of the respondent, S. Giridharan, a practicing Chartered Accountant, from the register of members maintained by it, for a period of one year. The brief facts are that with regard to the audit report and the balance sheets signed by the respondent as statutory auditor of M/s Great Western Industries Ltd. (M/s GWIL) as on 30.09.1998, 30.09.1999 and 30.09.2000, a complaint was filed by the Superintendent of Police, CBI EOW, Chennai on 18.08.2006 before the Council alleging certain charges against the respondent. The respondent submitted his written reply on 26.02.2007, the complainant filed a rejoinder on 16.04.2007, and the respondent submitted his reply on 21.06.2007. The complainant and the respondent were heard by the disciplinary committee of the Council. After concluding the hearing on 24.03.2010, the disciplinary committee submitted a report dated 10.06.2010 and recorded a finding that the respondent was guilty of professional misconduct within the meaning of Clauses (5), (6), (7), (8) and (9) of Part 1 of II Schedule to the Act read with Sections 21 and 22 of the Act. Copies of the report were given to the parties on 11.10.2010, and after considering their responses, the Council on 11.04.2011 accepted the report and recommended removal of the respondent's name from the register for one year. The High Court, after hearing the parties, confirmed the finding of guilt and the punishment, holding that the respondent had failed to discharge his duties properly and was guilty of professional misconduct. The Court ordered removal of the respondent's name from the register of members for a period of one year.
Headnote
A) Professional Misconduct - Chartered Accountant - Audit Report - Clauses (5), (6), (7), (8) and (9) of Part 1 of II Schedule to the Chartered Accountants Act, 1949 read with Sections 21 and 22 - The respondent, as statutory auditor of M/s Great Western Industries Ltd., signed audit reports and balance sheets for the years ending 30.09.1998, 30.09.1999 and 30.09.2000. A complaint was filed by the Superintendent of Police, CBI EOW, Chennai alleging professional misconduct. The disciplinary committee found the respondent guilty. The Council recommended removal from the register for one year. The High Court confirmed the finding of guilt and the punishment, holding that the respondent had failed to discharge his duties properly and was guilty of professional misconduct. (Paras 1-6) B) Disciplinary Proceedings - Council's Recommendation - Section 21(6) of the Chartered Accountants Act, 1949 - The Council of the Institute of Chartered Accountants of India made a reference under Section 21(5) of the Act for consideration of its recommendation for removal of the respondent's name from the register for one year. The High Court, after hearing the parties, confirmed the recommendation and ordered removal of the respondent's name from the register of members for a period of one year. (Paras 1-6)
Issue of Consideration
Whether the respondent Chartered Accountant is guilty of professional misconduct under Clauses (5), (6), (7), (8) and (9) of Part 1 of II Schedule to the Chartered Accountants Act, 1949 read with Sections 21 and 22 of the Act, and whether the recommendation of the Council for removal of his name from the register of members for a period of one year should be confirmed.
Final Decision
The High Court confirmed the finding of guilt and the punishment of removal of the respondent's name from the register of members for a period of one year. The petition was disposed of accordingly.
Law Points
- Professional misconduct
- Chartered Accountant
- Audit report
- Balance sheet
- Clauses (5)
- (6)
- (7)
- (8) and (9) of Part 1 of II Schedule to the Chartered Accountants Act
- 1949
- Sections 21 and 22 of the Chartered Accountants Act
- Removal from register
- Disciplinary proceedings
- Council of the Institute of Chartered Accountants of India
