ICAI Disciplinary Committee's nine-month removal from Register upheld for professional misconduct under Chartered Accountants Act 1949

Delhi HC dismissed writ petition challenging ICAI Disciplinary Committee's order removing petitioner's name from Register of Members for nine months for professional misconduct under Chartered Accountants Act, 1949. Court held proper procedure was followed, natural justice principles were observed, and petitioner received adequate opportunity to defend. Despite petitioner's argument that punishment was disproportionate since money was returned, HC found the misconduct serious enough to shake faith in the profession. Appellate Authority had already reduced punishment from one year to nine months, which court deemed appropriate.

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Issues Involved:
1. Challenge to the Order of the Appellate Authority and the Disciplinary Committee.
2. Allegations of Professional Misconduct.
3. Procedural Compliance under the Conduct Rules.
4. Admission of Guilt and Quantum of Punishment.
5. Judicial Review under Article 226 of the Constitution of India.

Summary:

1. Challenge to the Order of the Appellate Authority and the Disciplinary Committee:
The Petitioner challenges the Order dated 30.07.2023, by the Appellate Authority, ICAI, which directed the removal of his name from the Register of Members for nine months and imposed a fine of Rs. 1,00,000/-. The Petitioner also contests the Order dated 10.02.2022, by the Disciplinary Committee of the ICAI, finding him guilty of Professional Misconduct under the Chartered Accountants Act, 1949.

2. Allegations of Professional Misconduct:
A complaint was filed against the Petitioner by Dr. Kanchan Kumar Saxena, CEO of Bhopal Sahakari Dugdha Sangh, alleging that the Petitioner, while working as a Tax Consultant, had forged cheques amounting to Rs. 1.90 crores and transferred the funds into his and his wife's bank accounts instead of depositing them with the Statutory Authorities.

3. Procedural Compliance under the Conduct Rules:
The Disciplinary Directorate found that Rs. 2.60 crores had been remitted to the Petitioner through 12 cheques for tax payment, and Rs. 70 lakhs was still unrecovered. The Directorate refuted the Petitioner's claim that he was not responsible for tax deposits after 31.03.2013, citing a letter dated 03.02.2015 indicating his continued association with the Society. The Disciplinary Committee concurred with the Directorate's findings and proceeded under Chapter V of the Conduct Rules.

4. Admission of Guilt and Quantum of Punishment:
The Petitioner's authorized representative admitted to the misconduct before the Appellate Authority, only contending that the punishment was too harsh. The Appellate Authority dismissed the appeal but reduced the punishment period from one year to nine months.

5. Judicial Review under Article 226 of the Constitution of India:
The Court observed that the procedure prescribed under the Conduct Rules was followed, and the Petitioner was given full opportunity to defend his case. The Petitioner's admission of guilt before the Appellate Authority negates his challenge to procedural compliance. The Court emphasized that the role of a Chartered Accountant requires utmost sincerity and integrity. Given the serious nature of the misconduct, the Court found no grounds to interfere with the Appellate Authority's decision.

Conclusion:
The Writ Petition is dismissed, and the judgment of the Appellate Authority is upheld, maintaining the reduced punishment of nine months and a fine of Rs. 1,00,000/-.

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