1. This case has been forwarded to the High Court by the Council of the Institute of Chartered Accountants of India under Section 21(1) of the Chartered Accountants Act No. XXXVIII of 1949, which requires the Council to refer to this Court any complaint in which it is of the opinion that any member of the Institute has been guilty of conduct which if proved would render him unfit to be a member of the Institute, or where a complaint has been made by or on behalf of the Central Government, in which case whatever the nature of the finding of the Council is it has to be forwarded.
2. Briefly the facts are that the respondent, A. C. Kaher, had applied to the Institute for registration as an associate on 28-1-1950, his application being accompanied by the necessary fees, and, apparently after an investigation of his qualifications, he was found to be properly qualified and by a letter dated 31-7-1950 the Institute conveyed to him that he had been enrolled on the register of members at No. 1783 on 6-7-1950, from which date he was granted a certificate of practice.
3. It seems, however, that in the meantime the respondent had as a Chartered Accountant signed five certificates which were sumitted to the Joint Chief Controller of Imports at Calcutta by a firm named Messrs. Bishamber Nath Balkishan of Bombay in connection with applications for certain, import licences.
Some person who preferred to remain anonymous somehow became aware that something of this kind had happened and he sent a letter under the name 'Pro Bono Publico' to the Secretary of the Institute dated 26-6-1950, pointing out that one Amir Chand Kehr signing himself as A. C. Kher was practising as Chartered Accountant at Amritsar although his name did not appear in the register, and that he had signed some certificates on behalf of a firm named Bashi Mal Sohan Lal, Hardware Merchants of Amritsar.
In the end after the matter had been investigated and it had been found that the respondent had issued certificates to a different firm from that mentioned in the anonymous letter some months before he actually became a member of the Institute of Chartered Accountants, a com-plaint was lodged by the Ministry of Commerce & Industry with the Institute under Section 21 of the Act with a certificate that it was to be treated as one on behalf of the Government of India.
This was on 16-3-1953, and after a copy of the complaint had been sent to the respondent he submitted a written reply dated 20-4-1953, in which he simply adopted the line of defence that since he was not a Chartered Accountant on 17-4-1950, when he signed the certificates in question, he could no be proceeded against by the Institute under Section 21 of the Act, which is only applicable to members of the Institute.
4. In due course a formal enquiry was held at a meeting of the Disciplinary Committee on 18-7-1953 when the respondent was present as well as two representatives of the Department of the Controller of Imports. The transcript of the proceedings at this enquiry shows that the respondent, as well as relying on the defence that he could not be proceeded against under Section 21 on the grounds mentioned above, also pleaded that he considered that he was entitled to sign certificates as a Chartered Accountant on 17-4-1950 as he was expecting at any moment to receive intimation from the Institute that he had been enrolled as a member, and that the date of his enrolment would be retrospective as from the date of his application.
Both these contentions were repelled by the members of the Disciplinary Committee in their report dated 1-8-1953 and their finding which has been forwarded to this Court along with their report records of the proceedings and other documents connected with the case ts as follows:
'Shri A. C Kaher was guilty of misconduct under Section 21 of the Chartered Accountants Act, 1949, for having Issued certificates to established importers in respect of their past imports, styling himself as a Chartered Accountant, while he was neither a member of the Institute nor did he hold any certificate authorising him to carry on such a vocation.'
5. The learned counsel appearing on behalf of the respondent has frankly conceded that the original line of defence set up by him in his written reply to the complaint, and also as his first line of defence in the enquiry, was misconceived, and that his case now was simply that he signed the certificates on 17-4-1950 under a bona fide belief that he was qualified to do so because he possessed the necessary qualifications for enrolment, and therefore the Institute was bound to enrol him, and that he thought that his enrolment would date back to the date of his application.
His learned counsel also stated that he had been instructed to express the respondent's regret, and that if necessary the respondent, who had not attended today because he was not well, would attend in person to express his regret. It was therefore contended that even if the finding that he had been guilty of misconduct were upheld, a lenient view should be taken of the case and a mere warning would be a sufficient penalty.
6. On behalf of the Institute it is contended that the offence committed by the respondent was quite a serious one. Chapter VII of the Act provides various penalties which can be imposed by Courts for different offences, the present case falling under Section 26 which provides for a fine of up to Rs. 1,000/- for the first offence in case of the signing of a document by an unqualified person, and for imprisonment of up to six months and a fine of up to Rs. 5,000/- for any subsequent offence.
It is further contended that the position originally adopted by the respondent and persisted in by him at the hearing in the enquiry, that he was not covered by Section 21 because he was not a Chartered Accountant on the relevant date, is inconsistent with his alternative plea that he bona fide believed that he was entitled to issue certificates as a Chartered Accountant, and on the whole I am of the opinion that it is impossible to accept his contention that he was not aware on the date when he signed the certificates as a Chartered Accountant that he was not qualified to do so.
7. The only question which remains is therefore whether the misconduct of the respondent is such as to render him unfit to be a member of the Institute in which case under Sub-section (2) of Section 20 the removal of his name from the register of the Institute must follow automatically. The only mitigating circumstances appear to be that this is the first case of this particularkind of misconduct which has been reportedunder Section 21, and that when he signed the certificates the respondent did not profit at all financially, as he merely acted in this manner to oblige his brother-in-law, Balkishan, the proprietorof the firm which was applying for importlicenses.
Moreover it appears to be somewhat strange that the Institute should have enrolled the respondent as a member and granted him a certificate of practice alter receiving the letter which was responsible for starting the enquiry against him. This letter was received in the end of June and one would have thought that if any action was to be taken on it at all the Institute would have withheld the granting of the respondent's certificate until the matter had been cleared up instead of granting him the certificate, and then instituting an enquiry against him nearly three years later.
It is stated that the enquiry was somewhat protracted because the anonymous informant had neither spelt the name of the respondent correctly nor given the correct name of the firm in connection with whose import licenses the certificates were granted, but I cannot understand how these facts could have protracted the enquiry for nearly three years.
8. In these circumstances I consider that the misconduct of which the respondent has been guilty should not be regarded as serious enough to justify his removal from the register of members of the Institute, and although I do not consider that the matter is one to be treated lightly, I am of the opinion that the suspension of the respondent from practice for six months would be a sufficient punishment together with the costs of these proceedings. Counsel's fee Rs. 100/-.
9. I agree.