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Issues: (i) whether the respondent committed professional misconduct by failing to appear at the hearing of the appeals and thereby failing to discharge his professional obligations; (ii) whether the receipt of Rs. 8,250 on the footing alleged by the complainant and the attempt to obtain further money by threat were proved as misconduct; (iii) whether charging fees on a percentage of the relief obtained contravened clause (m) of the Schedule to the Chartered Accountants Act, 1949.
Issue (i): Whether the respondent committed professional misconduct by failing to appear at the hearing of the appeals and thereby failing to discharge his professional obligations.
Analysis: The respondent's non-appearance could not by itself found misconduct where the complainant had already broken off with him and had engaged other legal representatives before the hearing. The surrounding correspondence, especially the letters immediately before the hearing, showed that the complainant no longer expected the respondent to appear and that the respondent also understood that position. The evidence did not establish that the respondent remained bound to conduct the hearing in the circumstances that then existed.
Conclusion: The first charge was not proved.
Issue (ii): Whether the receipt of Rs. 8,250 on the footing alleged by the complainant and the attempt to obtain further money by threat were proved as misconduct.
Analysis: The evidence on this charge was not sufficiently reliable. The complainant's account as to the purpose and timing of payments was inconsistent with the documentary record, and his testimony was not wholly trustworthy on material particulars. The materials did not satisfactorily establish that the respondent obtained the money by wrongful representation or that the alleged threat to recover a larger sum was proved as misconduct.
Conclusion: The second charge was not proved.
Issue (iii): Whether charging fees on a percentage of the relief obtained contravened clause (m) of the Schedule to the Chartered Accountants Act, 1949.
Analysis: The correspondence itself established that the respondent stipulated for fees calculated at ten per cent of the relief obtained. The Court held that the character of the bargain was not altered because the amount was said to include the cost of engaging counsel, and that the professional engagement was entered into in the respondent's capacity as a Chartered Accountant and in connection with taxation proceedings. Such a contingent fee arrangement fell within the mischief of clause (m), and Section 61 of the Income-tax Act did not take the matter outside the disciplinary reach of the professional statute.
Conclusion: The third charge was proved and amounted to misconduct under clause (m) of the Schedule.
Final Conclusion: Only the charge relating to a percentage-based fee was sustained, and the respondent was ordered to suffer a limited suspension from practice.
Ratio Decidendi: A Chartered Accountant who agrees to charge fees as a percentage of the relief obtained commits professional misconduct under clause (m) of the Schedule to the Chartered Accountants Act, 1949, even if the arrangement is said to include expenses for other professional assistance.
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