TaxTMI 
TaxTMI 
2013 (10) TMI 407
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of removal of name of respondent K.K. Sindwani from the register of members of the petitioner for a period of one month, upon said K.K. Sindwani (hereinafter referred to as 'the contesting respondent'). Factual matrix indicates that one Deepak Panday (hereinafter referred to as 'the Complainant') filed a complaint against the contesting respondent levelling various allegations against him. After the Council of the Institute, in its meeting held on September 19, 20, 21 and 22, 2005, found the contesting respondent, prima facie, guilty of professional and/or other misconduct the matter was enquired into by the disciplinary committee, constituted under Section 17 of the Act. The disciplinary committee, in its repor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt reference has, accordingly, been made in terms of sub-section (5) of Section 21 of the Act. Responding to the notice, the contesting respondent has filed a reply wherein he has pleaded a preliminary objection to the effect that the reference is not maintainable before this Court because before the Company Law Board the matter between the company and its shareholders and directors including the Complainant stood resolved; a compromise was recorded by the Company Law Board in its order dated 22.09.2006 wherein the Company Law Board held that in view the settlement between the parties nothing survived in the complaint filed by the complainant against the petitioner. The contesting respondent has denied the allegations constituting the re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act, 1956. The Company has not provided depreciation on fixed assets during the year ending 31st March, 2000 which is clearly non-compliance of the provisions of Accounting Standard 6 namely "Depreciation Accounting". But the Respondent has neither qualified the same in his report nor the amount wise effect on the profitability as well as fixed assets have been mentioned. The Respondent has willingly omitted this paragraph from the Auditors Report to avoid qualificatory reporting." It shall bear repetition to again refer to the preliminary objection raised by the contesting respondent. He has stated that the matter between the Company and its shareholders and directors, including the Complainant, stood resolved b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and suits and the same have been withdrawn as undertaking as part of the compromise recorded on 17.02.06. As for the Complaint pending in the institute of Chartered Accountants of India, in view of the settlement, nothing survives in the complaint. Petition is accordingly closed." The disciplinary committee not only ignored the settlement reached between the complainant and the contesting respondent before the Company Law Board but also the assertion of the complainant that he did not press the complaint and returned a finding with regard to the charge 1.2.6 in paragraph 24 of the report as under "As regard the charge in the para 1.2.6 that the Auditor failed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Chartered Accountants Act, 1949." Similarly the Council considered the charge 1.2.6 in its decision as under : "As regard the charge mentioned in para 1.2.6 of the Report that the Respondent failed to mention the violation of Accounting Standards in the Auditors' Report, the Council noted that in the Auditor's Report for the year ending 31st March, 2000, the Respondent had not reported whether the Profit and Loss and Balance Sheet comply with the Accounting Standards as provided under sub-section (3C) of Section 211 of the Companies Act, 1956, as the Company did not provide the depreciation in the Books of Account. The Council thus found that the Respondent failed to discharge his duties diligently as it was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e allegations against the contesting respondent were required to be established with some certainty, if not beyond reasonable doubt. Even by the understanding of a layman 'proof means sufficient evidence to substantiate a proposition. However, proof with certainty or sufficient evidence apart, there is no evidence, whatsoever, in proof of the allegations against the contesting respondent. Report of the disciplinary committee and decision of the council do not say that instead of the complainant some other witnesses were examined in proof of the allegations and/or record of the case was proved during the course of the proceedings. In fact, after the complainant settled the matter with the complainant before Company Law Board and then wrot....