TaxTMI 
TaxTMI 
2014 (1) TMI 605
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....' firm. The petitioner no.2 is a Senior Manager of the said firm. Both the petitioners are members of the respondent no.1- the Institute of Chartered Accountants of India. 3. Respondent no.1 is set up under the Chartered Accountants Act, 1949 (hereinafter referred to as the said Act). Respondent no.2 is the Council of the 1st respondent. Respondent no.3 is the Disciplinary Committee of which Respondent nos.3A, 3B and 3C are the members. Respondent no.4 is the Director (Discipline) of the 1st respondent. Respondent no.5 is the Union of India. 4. Sometime in 2004, the 1st respondent received information from the Reserve Bank of India (RBI) about certain irregularities alleged to have been committed by the petitioners in relation to the statutory audit done by the petitioners on behalf of PWC of the Global Trust Bank for the financial years ended 31st March 2002 and 31st March 2003. Correspondence ensued between respondent no.1, PWC and the RBI in the course of which respondent no.1 sought certain clarifications and explanations from PWC and PWC sought certain particulars and inspection of information and various documents from respondent no.1 and the RBI. PWC also addressed det....
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....mber of the Institute has been guilty of a professional misconduct specified in the First Schedule, the Council shall afford to the member an opportunity of being heard before orders are passed against him on the case, and may thereafter make any of the following orders, namely: (a) reprimand the member; (b) remove the name of the member from the Register for such period, not exceeding five years, as the Council thinks fit: Provided that where it appears to the Council that the case is one in which the name of the member ought to be removed from the Register for a period exceeding five years or permanently, it shall not make any order referred to in clause (a) or clause (b), but shall forward the case to the High Court with its recommendations thereon. (5) Where the misconduct in respect of which the Council has found any member of the Institute guilty is misconduct other than any such misconduct as is referred to in sub-section (4), it shall forward the case to the High Court with its recommendations thereon. (6) On receipt....
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....p; (8) For the purposes of any inquiry under this section, the Council and the Disciplinary Committee shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908 .), in respect of the following matters, namely:- (a) summoning and enforcing the attendance of any person and examining him on oath; (b) the discovery and production of any document; and (c) receiving evidence on affidavit." 7. By the amended Act, Section-21 of the un-amended Act was replaced with sections 21, 21-A, 21-B, 21-C and 21-D. 21-D is a transitional provision. Section 21, 21-A,21-B, 21-C & 21-D read as under :- "MISCONDUCT 21 Disciplinary Directorate. (1) The Council shall, by notification, establish a Disciplinary Directorate headed by an officer of the Institute designated as Director (Discipline) and such other employees for making investigations in respect of any information or complaint received by it. &nb....
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....any one or more of the following actions, namely:- (a) reprimand the member; (b) remove the name of the member from the Register up to a period of three months; (c) impose such fine as it may thinks fit which may extend to rupees one lakh. (4) The Director (Discipline) shall submit before the Board of Discipline all information and complaints where he is of the opinion that there is no prima-facie case; and the Board of Discipline may, if it agrees with the opinion of the Director (Discipline), close the matter or in case of disagreement, may advise the Director (Discipline) to further investigate the matter. 21B. Disciplinary Committee. (1) The Council shall constitute a Disciplinary Committee consisting of the President or the Vice-President of the Council as the Presiding Officer and two members to be elected from amongst the members of the Council and two members to be nominated by the Central Government from amongst the per....
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.... All complaints pending before the Council or any inquiry initiated by the Disciplinary Committee or any reference or appeal made to a High Court prior to the commencement of the Chartered Accountants (Amendment) Act, 2006, shall continue to be governed by the provisions of this Act, as if this Act had not been amended by the Chartered Accountants (Amendment) Act, 2006.' 8. The effect/interpretation of the transitional provision is the core issue in Ramkrishna's appeal before the Supreme Court. This matter originated in the Delhi High Court in which the learned single Judge held, based on the facts and circumstances of the case, that the procedure prescribed in the amended Act, Sections 21, 22, & 22-A would be applicable to pending proceedings in information cases. This was carried in appeal by the Respondent no.1. The Division Bench allowed the appeal and held that the procedure prescribed by Sections 21, 22 & 22-A of the un-amended Act would be applicable to the pending proceedings and information cases and not the procedure prescribed by the amended Act. This was taken further by the respondent to the said Appeal to the Supreme Court by way of the said SLP-Ramkrishna's Appeal....
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....s. 13. The Division Bench of the Delhi High Court has held that the unamended provisions of the Act are applicable to such cases. The Supreme Court has not stayed the judgment. Nor did the Supreme court stay the proceedings before the Council. While granting leave the Supreme Court continued the interim order until disposal of the appeal. The interim order only restrained the respondents from passing the final order. 14. Mr. Chagla submitted that in the case before the Supreme Court, the proceedings had almost concluded and only the order remained to be passed and that it is for this reason that the Supreme Court was required to grant a stay merely against the passing of the final order. 15. It is not open to us to speculate the reasons for the Supreme Court having passed a particular order. The order itself does not indicate the same. 16. We appreciate that in the event of the Supreme Court overruling the judgment of the Delhi High Court inconvenience may be caused to the petitioners. However in the facts and circumstances of the case we are not inclined to accede to the petitioners' request. On the other hand in the event of the judgment of the Delhi High Court being ....