TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 1274
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....ence are that complainant Sh. Mohit Gupta, vide his complaint dated 16.03.2005, leveled allegations against the respondent that he had sold 100 shares of Aban Loyd Chiles Offshore Ltd. to him in November 1999, but the Transfer Deed for the transfer of shares was lodged only on 04.11.2004. In the interregnum, respondent continued to receive dividends and in July 2004, obtained duplicate shares in his name by misrepresenting and filing Indemnity Bond and Affidavit that the original Shares Certificates were lost. 3. The Council in its meeting held on 7th to 9th August, 2008, was of the prima facie opinion that respondent was guilty of professional and/or other misconduct and accordingly decided to refer the case to Disciplinary Committee for enquiry. The relevant extract of the meeting is reproduced hereunder:- Item No. 22:"Complaint" cases under Section 21 of the Chartered Accountants Act, 1949 xx xx xx xx 1167. Mohit Gupta Vs. Gurvinder Singh (M,No.16024) [25-CA(90)/2005] The Council was prima facie of the opinion that the Respondent was guilty of professional and/or other misconduct. It was, therefore, decided to refer the case to the Disciplinary Committee for inquiry." ....
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.... respondent was acting as an individual in his dealings with the complainant which were purely commercial. While selling the shares held by him the respondent was not acting as a Chartered Accountant. He was not discharging any function in relation to his practice as a Chartered Accountant. 15. The Reference is accordingly answered by declaring the law as above and not inflicting any penalty upon the respondent." DECISION OF HON'BLE SUPREME COURT IN SLP (C) No. 19564/2017 8. The aforesaid order passed by the Division Bench was challenged before the Hon'ble Supreme Court. The Hon'ble Apex Court, vide order dated 16.11.2018, set aside the order dated 16.08.2016 and remanded the matter back to the High Court and held as follows:- "6) The Disciplinary Committee has, on facts, found the Chartered Accountant guilty of a practice which was not in the Chartered Accountant's professional capacity. This, it was entitled to do under Schedule I Part-IV sub-clause(2) if, in the opinion of the Council, such act brings disrepute to the profession whether or not related to his professional work. 7) This being the case, it is clear that the impugned judgment is incorrect and must, therefore....
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....en given an opportunity, respondent failed to provide any additional evidence in his written representation to refute the findings and accordingly the Council found that respondent's actions amounted to "other misconduct" under Section 22 read with Section 21 of the Act and recommended that the name of the respondent be removed from the Register of Members for a period of six months. SUBMISSIONS OF RESPONDENT 12. Respondent asserts that he had never sold the shares and denied having any prior dealings with the complainant. He has tried to explain that an employee of broker M/s. Bharat Bhushan & Company made him sign a blank transfer deed on the pretext that it was needed for some unrelated share delivery issue. According to the respondent, this blank deed was subsequently used for transfer of disputed shares. 13. Furthermore, the respondent emphasizes that complainant had agreed to settle the matter and sent a letter to the Council through his counsel for withdrawal of the complaint. Relying on this, respondent No. 1 believed that the matter had been resolved. However, two years later, the Institute asked the respondent to submit a written statement, disregarding the complainant....
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....visions of the Act as if the Act had not been amended. Since the present matter is related with the complaint filed before the Council prior to the amendment in the Act, it is to be dealt with under the provisions of the un-amended Act only. 18. Much has been argued about the purported settlement between the complainant and the respondent, consequent to which, complainant has agreed to withdraw his complaint. In this regard, we may refer to Section 21 (8) of Chartered Accountants Act, 1949, which provides as under:- "8. A complaint filed with the Disciplinary Directorate shall not be withdrawn under any circumstances." 19. Hence, in view of Section 21 (8), notwithstanding any settlement between the parties, even the complainant cannot withdraw the complaint once filed. 20. Another reason for assailing the finding of the Disciplinary Committee is that the complainant was not examined as a witness in the case and had not participated in the disciplinary proceedings. The scope of the disciplinary proceedings conducted under Chartered Accountants Act have been described by the Division Bench of this Court in the case of Wholesale Trading Services P. Ltd. v. The Institute of Charte....
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....cts as a realtor that provides information to the ICAI regarding misconduct. This is also the rationale for not providing a remedy of an appeal to a complainant under Section 22G of the ICAI Act, against a decision of the ICAI absolving the member of the allegation of any misconduct. In terms of Section 22G of the ICAI Act, the remedy of appeal is only available to a member of ICAI against any decision of the Board of Discipline or Disciplinary Committee imposing any penalty. It is not available to the Complainant/ informant." 22. In view of the scope of the disciplinary proceedings as laid down above, the present disciplinary proceedings cannot be said to have been affected due to the absence of the complainant. 23. Admittedly, respondent had purchased the shares in the year 1997, but denied having sold them to the complainant. Surprisingly, the signatures on the share transfer deed has been admitted by the respondent. He tried to render an explanation that an employee of the broker made him sign the blank transfer deed on the pretext that it was needed for some unrelated share delivery issue, which may have been fraudulently used for the purpose of selling shares to the complai....