Case Note & Summary
This is a reference case filed by the Council of the Institute of Chartered Accountants of India under Section 21(5) of the Chartered Accountants Act, 1949, 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 for a period of one year. The background of the case is that 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 with regard to the audit report and balance sheets signed by him as the statutory auditor of M/s Great Western Industries Ltd. (M/s GWIL) for the years ending 30.09.1998, 30.09.1999, and 30.09.2000. The respondent submitted his written reply on 26.02.2007, to which the complainant filed a rejoinder on 16.04.2007, and the respondent submitted his reply on 21.06.2007. Both parties 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 I of the Second 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 findings 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 failed to exercise due diligence and discharged his duties in a manner not befitting a Chartered Accountant. The court dismissed the petition and directed that the name of the respondent be removed from the register of members for a period of one year.
Headnote
A) Professional Misconduct - Chartered Accountant - Audit Report - Clauses (5)-(9) Part I of II Schedule, Sections 21, 22 Chartered Accountants Act, 1949 - 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 under Clauses (5), (6), (7), (8) and (9) of Part I of the Second Schedule read with Sections 21 and 22 of the Act. The Council recommended removal of his name from the register for one year. The High Court confirmed the finding of guilt and the punishment, holding that the respondent failed to exercise due diligence and discharged his duties in a manner not befitting a Chartered Accountant. (Paras 1-5)
Issue of Consideration
Whether the respondent Chartered Accountant is guilty of professional misconduct under Clauses (5), (6), (7), (8) and (9) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, and whether the recommendation of the Council for removal of his name from the register for 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 dismissed.
Law Points
- Professional misconduct
- Chartered Accountant
- Audit report
- Balance sheet
- Disciplinary proceedings
- Removal from register
- Section 21(5) Chartered Accountants Act 1949
- Clauses (5)-(9) Part I of II Schedule
