Pre-Act professional misconduct can fall within a disciplinary statute, but specific charges must still be proved on the pleaded facts.
Disciplinary proceedings under the Chartered Accountants Act, 1949 were held capable of reaching pre-Act conduct where the statutory scheme showed a public-protection purpose and contemplated removal for misconduct discovered after commencement. On the misconduct charge, omission of selling commission from published accounts was treated as material because it distorted the trading position, but the specific charges under the Schedule failed since gross negligence was not alleged and deliberate concealment had been withdrawn; imprudence alone was insufficient. The reference therefore failed and no disciplinary order was made.
Issues: (i) whether proceedings under the Chartered Accountants Act, 1949 could be maintained in respect of pre-Act conduct; (ii) whether the respondent was guilty of professional misconduct under items (o) and (p) of the Schedule for certifying the profit and loss account without disclosure of the selling commission and the resulting understatement.
Issue (i): Whether proceedings under the Chartered Accountants Act, 1949 could be maintained in respect of pre-Act conduct.
Analysis: The statutory scheme was held to show that the Act was intended to protect the public from unfit accountants and was capable of applying to conduct discovered after its commencement, even if the conduct itself occurred earlier. The provisions dealing with registration and removal from the register, especially the disabilities under section 8 and the power under section 20(1)(c), were treated as indicating that pre-Act misconduct was within the Act's purview.
Conclusion: Yes. The Act was held applicable to pre-Act conduct.
Issue (ii): Whether the respondent was guilty of professional misconduct under items (o) and (p) of the Schedule for certifying the profit and loss account without disclosure of the selling commission and the resulting understatement.
Analysis: The omission of the selling commission from the published accounts was treated as material because it concealed the true cost of the managing agents and distorted the presentation of trading results. However, the charges actually framed were not charges of gross negligence, and the allegation of deliberate concealment was withdrawn. On the facts, the respondent had acted imprudently and without reasonable care, but the specific charges under items (o) and (p) were not established to the standard required for disciplinary finding.
Conclusion: No. The specific charges of misconduct were not proved.
Final Conclusion: The reference failed, and no disciplinary order was made against the respondent.
Ratio Decidendi: A professional disciplinary statute aimed at public protection may extend to pre-Act misconduct where the statutory scheme indicates such coverage, but a finding of professional misconduct under provisions requiring non-disclosure of a material fact or failure to report a material misstatement must be supported by the specific charge as framed and cannot rest merely on imprudence or lack of care when gross negligence is not alleged.
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