1. This is a Reference under Section 21(1) of the Chartered Accountants Act and a curious case in many respects. The respondent is one J. K. Ghosh who, we are informed by the learned Counsel for the Institute, has now ceased to be a member. Against him, the complaint was that he gave a certificate that one Ashutosh Basu had served him as an audit clerk from 2nd January 1941 up to 2nd March 1951, whereas the said Ashutosh Basu had been serving under another person called Chowdhuri in the same capacity from 1st December, 1941 up to 31st March 1951. It appears that before the last certificate Ghosh bad issued another certificate in favour of the said Ashutosh Basu in which he stated that Basu had served under him up to 15th November 1950. Be that as it may, it will appear from the dates I have mentioned that there was an overlapping as between the alleged period of service under Ghosh and that under Chowdhury as regards the major part thereof and it was that overlapping which put the Institute of Chartered Accountants upon enquiry and resulted in the present proceedings.
2. The history of the matter is set out in some detail in the report of the Disciplinary Committee. It appears that, in the first instance Ashutosh Basu made an application for admission to the First Chartered Accountants Examination to be held in November, 1950 and in support of that application he submitted a certificate from Chowdhury. The application did not succeed, inasmuch as Chowdhury was found to be not entitled to take any Audit Clerk at all. Thereafter Ghosh sent a letter to the Institute stating that Basu had served under him as an Audit Clerk from 2nd January, 1941 & the letter ended with the request that Basu's audit service under him might be registered. The registration asked for was made taut only with effect from 22nd October, 1947 which was the date from which Ghosh himself had become entitled to take in and train Audit Clerks. It was when Basu made a second application for admission to the Chartered Accountants Examination to be held in 1951 that the overlapping between the period of his alleged service under Ghosh and that of his alleged service under Chowdhury came to the notice of the Institute.
3. The usual enquiry under Section 21 of the Act was held by the Disciplinary Committee of the Institute and I may say at once that the findings recorded by the Institute which the Council ultimately accepted appear to me to be strained to a degree. It is quite obvious that the Audit Clerk could not have served his two masters at the same time if he was to attend office during the normal hours of attendance. But the plea put forward by Ghose was that the clerk had attended his office not during the usual hours of attendance but in the afternoons and that he had served him for about four hours a day. He pleaded ignorance of the fact that the clerk was simultaneously employed under another master.
4. The explanation furnished by Ghose curious as it was went down with the Disciplinary Committee. That Committee appears to have accepted the story of Ghosh though with the reservation that the Audit Clerk could not have served him for four hours a day but must have served for a shorter period. The case that he did in fact serve Ghosh, however, appears to have been accepted. The only fault found by the Committee against Ghosh is that although he might not have known that Basu was employed under Chowdhury he must have known that he was employed elsewhere and that the certificate he had granted was misleading in that it gave the impression that Basu's hours of attendance had been the normal hours. The Committee thought that Ghosh's conduct in not placing the full facts regarding the attendance of Basu before the Institute was unbecoming but that it was not so serious as to warrant his removal from the membership of the Institute.
In taking that view the Committee paid regard to the fact that on coming to know of the other employment of Basu under Chowdhury, Ghosh had immediately suspended him and subsequently dispensed with his services and that he had also applied to the Secretary of the Institute for the cancellation of the registration of Basu's audit service which had already been made.
A further finding recorded by the Committee was that the omission of Ghosh to place the full facts before the Institute had not been intentional but was due to 'an incorrect appreciation of the Rules and Regulations regarding the registration of Audit Service' and that the only reason for his acting in the way he had done was that he wanted to help Basu. Those findings were accepted by the Council which in fact, adopted them as its own and it is those findings which have been forwarded to us. The view expressed by the Council is that having regard to the circumstances of the case, a warning will be sufficient.
5. As I have stated we are by no means satisfied with the findings recorded by the Committee and accepted by the Council, but it appears to us that since there was some evidence before the Committee on which it acted, we must accept the findings for the purposes of this Reference whatever our personal opinion may be regarding the view taken by the Committee and the Council of the facts. The opinion of the Council is that although some lapse from the proper professional etiquette had occurred, there has been no mis-conduct within the meaning of the Act, viz., 'conduct which, if proved will render a person unfit to be a member of the Institute'. If misconduct of that kind is found by the Council and if the High Court also takes that view the consequence prescribed by Sub-section 2 of Section 20 of the Act is that the name of the delinquent member must be removed from the Register. It was because the Council thought that the misconduct which had occurred in the present case fell short of the degree which would render a person to be unfit to be a member of the Institute that it has recommended a lesser punishment.
6. The recommendation made by the Council raises a question of some difficulty. The Act appears to us to be an extremely ill-drafted one and no proper regard seems to have been paid to the necessity of providing for grades of misconduct and graduated forms of punishment appropriate thereto. At least there is no clear provision to that effect. At first sight it would seem that the only misconduct with which the Act is concerned is 'conduct which if proved will render a person unfit to be a member of the Institute' and that the only punishment which the Act provides for is the punishment prescribed for misconduct of that kind which is removal from the Register. The Act does not clearly or specifically provide for any misconduct of a lesser degree or any punishment therefor.
The Chapter dealing with misconduct is a short chapter and it begins with Section 21 which speaks of the Council instituting an enquiry when it receives some information or complaint and comes to be of opinion that the person complained against has been guilty of conduct which, if proved, will render him unfit to be a member of the Institute. There is a second contingency provided for in the sub-section and that is where a complaint is made against a member of the institute by or on behalf of the Central Government. It is somewhat curious that the requirement that the Council should come to be of opinion that the misconduct alleged is such that, if proved, it will render the person complained against unfit to be a member of the Institute is not made essential in the case where the complainant is the Central Government. Whether this difference between the two parts of the sub-section is intentional or whether it is merely a drafting error, I do not know but primarily at least Sub-section 1 of Section 21 is concerned only with complaints of such misconduct as, if proved, would render the person complained against unfit to be a member of the Institute.
It is true that the latter part of Section 22 provides that the Council shall also have power to enquire into the conduct of any member of the Institute 'under any other circumstances' and it may be that the other circumstances contemplated are circumstances where there is a complaint of some misconduct against a member but the misconduct alleged is not such as, if proved, would render the person concerned unfit to be a member of the Institute. But even on that view a question at once arises as to the purpose for which such enquiry in 'other circumstances' may be held if the only misconduct punishable by the Act is misconduct which, if proved, will render the person concerned unfit to be a member of the Institute. Prom the terms of Section 20(2), Section 21(1) and Section 22, one would think that in the contemplation of the Act, at least for the purposes of disciplinary action, there is no misconduct less than misconduct rendering a man unfit to function as a member of the Institute and that there is no penalty lesser than the penalty of removal from the membership Register.
7. There may however be some implied provision for other kinds of penalty in the terms of Section 21(3) of the Act. That section to quote only the material part provides that the High Court may after it has considered the findings of the Council
'either pass such final orders on the case as it thinks fit or refer it back for further enquiry by the Council.'
It will be noticed that the language 'such final orders as it thinks fit' is perfectly general and it may perhaps be argued that under the authority of that language the High Court would be entitled to impose penalties less severe than removal from the membership Register in cases where the misconduct is not of a sufficient gravity so as to entail such removal. To my mind Sub-section 3 of Section 21 ought to be so construed, because if the only punishment provided for by the Act be removal from the Register, its actual working must prove to be extremely difficult, because in each case the Council or the High Court will have before it only a choice between a complete disqualification of the person arraigned before it and his acquittal.
However unsatisfactory and obscure the provisions of the Act may be, I think a workable construction can be spelt out of them, if it be held, (a) that an enquiry may be held by the Council both when it thinks that a member has been guilty of such conduct as if proved, will render him unfit to be a member and when it thinks, that a member has been guilty of a lesser degree-of misconduct; (b) that when upon a consideration of the fin-dings of the Council, the High Court takes the view that misconduct has occurred and it is of such a degree as to require the removal of the person concerned from the membership of the Institute, such removal will take place under the provisions of Section 20(2); and (c) that if however, the High Court considers that some misconduct has occurred but it is not of such gravity as to require the removal of the person concerned from membership, it can pass any other order, short of removal.
So construed, the true meaning of Section 20(2) would appear to be that its operation is limited to cases where the High Court finds a member guilty of such conduct as renders him unfit to remain a member, but its effect is not to exclude other forms of punishment where the misconduct is of lesser gravity. To put it in another way, if the High Court finds that misconduct of the maximum gravity contemplated by the Act has occurred, Sub-section (2) of Section 20 will be attracted and the name of the person concerned will have to be removed. But the sub-section will have no application if the High Court finds other forms of misconduct and in cases where such misconduct is found the punishment will be as the High Court may specifically direct.
8. On the above view of the true effect of the penal sections, it is open to us to award an appropriate punishment to the respondent in the present case. We are sensible of the fact that the Council which is charged with the maintenance of the highest standard of professional etiquette and integrity amongst its members, has recommended that a warning will be sufficient. It appears to us, however, that a mere warning can be of no practical value. Even on the findings of the Council, the respondent was not candid with the Institute up to the last moment, because not only had he failed to apprise the Institute of the true conditions of Basu's service under him, but he was also insisting that the Audit Clerk had served him for longer hours every day than the Council was prepared to believe. It appears to us that a mere warning is not sufficient for a Chartered Accountant who is capable of making misstatements to his own Institute in regard to the discharge of his professional duties in the interest of a friend or a protege.
We are informed by Mr. Mukherjee as I stated a little while ago, that the respondent had ceased to be a member of the Institute an and from 1st April 1953, because of his failure to pay the membership subscription. We think that the ends of justice require that he should be debarred for some further time from applying to the Institute for the restoration of his name. We are aware that such an order will operate virtually as an order of suspension, but that is precisely the Kind of penalty which we consider called for and which we intend to impose.
9. We accordingly direct that the respondent, J. K. Ghose, be debarred from applying for the restoration of his name in the Register of the Members of the Institute for a period commencing from today and ending with the 31-5-1954, and consequentially from functioning as a Chartered Accountant during such period.
10. There will be no order for costs.
S.R. Das Gupta, J.
11. I agree.