Rule 12 of Chartered Accountants misconduct rules is discretionary, not an absolute seven-year bar, and needs reasoned refusal.

Rule 12 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 does not impose an absolute seven-year limitation on complaints. Its operation is discretionary and depends on the Director's satisfaction that delay has caused evidentiary difficulty, defence prejudice, or procedural inconvenience. A rejection under the rule must therefore be based on reasoned consideration of those circumstances. The summary dismissal of the preliminary objection without examining prejudice or recording reasons was unsustainable and was set aside.

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Issues: Whether Rule 12 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 operates as an absolute limitation barring complaints after seven years, and whether the summary rejection of the preliminary objection without reasons was sustainable.

Analysis: Rule 12 does not create a hard bar of limitation merely because the alleged misconduct is more than seven years old. Its operation depends on the Director's satisfaction that delay has caused difficulty in securing evidence, difficulty in defending the complaint, or procedural inconvenience. The use of the expressions "is satisfied" and "may refuse" makes the power discretionary and conditional, not mandatory. The impugned communication rejected the petitioner's objection outright without examining whether the time lag had in fact caused prejudice or whether the enquiry could still be fairly proceeded with. Since the objection under Rule 12 required a reasoned evaluation of the relevant circumstances, the summary rejection was unjustified.

Conclusion: Rule 12 is not an absolute bar of limitation, but the rejection of the petitioner's preliminary objection without recorded reasons was unsustainable and had to be set aside.

Ratio Decidendi: Rule 12 confers a discretionary power to decline entertainment of an aged complaint only upon satisfaction of specified prejudice-based conditions, and any refusal under that rule must be supported by reasoned consideration of those conditions.

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